Question 1

The capital balance amount shown in the balance sheet column of the worksheet represents
A) the beginning capital plus net income.
B) the beginning capital plus net income less withdrawal.
C) the beginning capital less withdrawals.
D) the beginning capital plus any investments to capital that occurred during the period.

Accepted Answer

The answer of The capital balance amount shown in the...

Question 2

On the worksheet, the Income Statement debit column totaled $800 and the credit column totaled $1,200. What is the amount of Net Income?

Accepted Answer

The answer of On the worksheet, the Income Statement debit...

Question 3

The ending figure for capital, used on the balance sheet, will be obtained from
A) balance sheet credit column of the worksheet.
B) the statement of owner's equity.
C) balance sheet debit column of the worksheet.
D) credit column of the income statement.

Accepted Answer

The ending figure for capital on the balance sheet is obtained from the statement of owner's equity, which reflects changes in the owner's equity account, including capital contributions, withdrawals, and the period's net income or loss.

Question 4

For each account listed identify the category it belongs to, the normal balance (debit or credit), and the financial statement the account appears.
 $$\begin{array} { | l | l | l | l | } 
\hline \text { Account } & \text { Category } & \text { Normal Balance } & \text { Financial Statement } \
\hline \text { 4. Cash } & \text { Asset } & \text { Debit } & \text { Balance Sheet } \
\hline \text { 1. Depreciation Expense } & & & \
\hline \text { 2. Accumulated } & & & \
\text { Depreciation } & & & \
\hline \text { 3. Wages Expense } & & & \
\hline \text { 4. Office Supplies } & & & \
\hline \text { 3. Office Supplies Expense } & & & \
\hline \text { 6. Wages Payable } & & & \
\hline \text { 7. Prepaid Rent } & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each account listed identify the category...

Question 5

Mavis Company took inventory and recorded the consumption of supplies. How will this affect the balance sheet?
A) Assets will be decreased.
B) Liabilities will be increased.
C) Owner's equity will be increased.
D) This will have no effect on the period-end balance sheet.

Accepted Answer

Recording the consumption of supplies will decrease the current asset account "supplies" on the balance sheet, thus decreasing the overall assets of the company.

Question 6

The amount for withdrawals, to be used on the Statement of Owner's Equity, would be obtained from
A) the worksheet in the balance sheet debit column.
B) the worksheet in the income statement credit column.
C) the worksheet in the income statement debit column.
D) the worksheet in the balance sheet credit column.

Accepted Answer

Withdrawals are a reduction in the owner's equity and are recorded in the balance sheet debit column of the worksheet. Therefore, the amount for withdrawals used on the Statement of Owner's Equity would be obtained from the worksheet in the balance sheet debit column.

Question 7

Which of the financial statements is prepared first from the worksheet?
A) Balance sheet
B) Income statement
C) Statement of owner's equity
D) None of these answers are correct.

Accepted Answer

The Income Statement is prepared first from the worksheet because it calculates the net income or loss, which is then used in preparing the Statement of Owner's Equity and the Balance Sheet.

Question 8

From the following data, make the following adjustments, and complete the worksheet for the month. (a) Depreciation Expense is $250. (b) Supplies available $250, supplies on hand $75. (c) Prepaid Insurance balance $400, $100 has expired. (d) Wages for the 5-day work-week are $500, the month ended on a Wednesday.

	DR	CR	DR	CR	DR	CR	DR	CR	DR	CR
Cash	750
Accts. Receivable	400
Supplies	250
Prepaid Ins.	400
Equipment	7,000
Accts. Payable		900
Capital		7,100
Capital		900
Wages Expense	100
Totals	8,900	8,900

Accepted Answer

The answer of From the following data, make the following...

Question 9

Show which columns would contain the adjusted balances by placing an "x" in the appropriate column. Assume all accounts have normal balances.

	DR	CR	DR	CR	DR	CR	DR	CR	DR	CR
Cash	750
Accts. Receivable	400
Supplies	250
Prepaid Ins.	400
Equipment	7,000
Accts. Payable		900
Capital		7,100
Capital		900
Wages Expense	100
Totals	8,900	8,900

Accepted Answer

The answer of Show which columns would contain the adjusted...

Question 10

The Income Statement should be prepared before the worksheet.

Accepted Answer

The worksheet is used to prepare financial statements, including the Income Statement. Therefore, the Income Statement cannot be prepared before the worksheet is completed.

Question 11

It is very unusual for the totals of the two Income Statement columns to be identical before net income is added.

Accepted Answer

The Income Statement columns in a trial balance typically show different totals because they represent revenues and expenses, which are unlikely to be identical before determining the net income.

Question 12

The beginning capital balance used on the Statement of Owner's Equity is best obtained from
A) the worksheet in the balance sheet credit column.
B) the worksheet in the income statement credit column.
C) the amount calculated on the statement of owner's equity.
D) the general ledger.

Accepted Answer

The beginning capital balance for the Statement of Owner's Equity is best obtained from the general ledger. The general ledger contains all the accounts for recording transactions relating to a company's assets, liabilities, owners' equity, revenue, and expenses, including the detailed record of the owner's capital account.

Question 13

Using the following data, make the adjustments, and complete the worksheet for the month. (a) Equipment costing $750 with a residual value of $150 has an expected life of 12 months. (b) Accrued salaries of $100. (c) Supplies ledger balance $900, supplies used $400. Account Trial Balance Adjustments Adj. Trial Bal Inc. St'ment Balance Sheet

	DR	CR	DR	CR	DR	CR	DR	CR	DR	CR
Cash	750
Accts. Receivable	400
Supplies	250
Prepaid Ins.	400
Equipment	7,000
Accts. Payable		900
Capital		7,100
Capital		900
Wages Expense	100
Totals	8,900	8,900

Accepted Answer

The answer of Using the following data, make the adjustments,...

Question 14

To compute net income or net loss, the debit and credit columns of the income statement section of the worksheet are totaled, and the difference is placed on the smaller side.

Accepted Answer

To compute net income or net loss, the debit (expenses) and credit (revenues) columns of the income statement section of the worksheet are totaled. If the credit side is larger, indicating more revenue than expenses, the difference represents net income and is placed on the debit side to balance. Conversely, if the debit side is larger, indicating more expenses than revenue, the difference represents a net loss and is placed on the credit side to balance.

Question 15

The inside columns on the financial statements are used to
A) show debits.
B) show credits.
C) show subtotals.
D) None of these answers are correct.

Accepted Answer

The inside columns on financial statements are used to show subtotals, such as subtotaling each category of expenses or revenue. They are not specifically designated for showing debits or credits.

Question 16

On the worksheet, the Balance Sheet debit column totaled $1,400 and the credit column totaled $1,300. What is the amount of Net Loss?

Accepted Answer

The answer of On the worksheet, the Balance Sheet debit...

Question 17

In the business world, financial statements are prepared from the
A) trial balance.
B) worksheet income statement and balance sheet columns.
C) adjusted trial balance.
D) ledger.

Accepted Answer

The answer of In the business world, financial statements are...

Question 18

For each account listed, identify the category it belongs to, the normal balance (debit or credit), and the financial statement in which the account appears.

	DR	CR	DR	CR	DR	CR	DR	CR	DR	CR
Cash	750
Accts. Receivable	400
Supplies	250
Prepaid Ins.	400
Equipment	7,000
Accts. Payable		900
Capital		7,100
Capital		900
Wages Expense	100
Totals	8,900	8,900

Accepted Answer

The answer of For each account listed, identify the category...

Question 19

On the worksheet, the difference between the debits and credits in the income statement columns would be the net income or net loss for the period.

Accepted Answer

This is true. The income statement summarizes a company's revenues and expenses for a period of time, and the difference between the total debits and credits in the income statement columns will indicate whether the company had a net income or net loss for that period.

Question 20

On the worksheet in the final two columns - the debits will always equal the credits before net income is added.

Accepted Answer

The answer of On the worksheet in the final two...

	Income Statement		Balance Sheet
	Debit	Credit	Debit	Credit
Cash (example)	________	________	___x____	________
Accounts Receivable	________	________	________	________
Office Supplies	________	________	________	________
Prepaid Rent	________	________	________	________
Word Processing Equipment	________	________	________	________
Accounts Payable	________	________	________	________
M. Bryant, Capital	________	________	________	________
M. Bryant, Withdrawals	________	________	________	________
Word Processing Fees	________	________	________	________
Office Salaries Expense	________	________	________	________
Advertising Expense	________	________	________	________
Accumulated Depreciation	________	________	________	________
Rent Expense	________	________	________	________

Account	Category	Normal Balance	Financial Statement
0. Cash	Asset	Debit	Balance Sheet
1 Capital, Beginning
2. Salaries Expense
3. Salaries Payable
4. Accounts Receivable
5. Prepaid Insurance
6. Withdrawals
7. Service Fees
8. Accounts Payable

	DR	CR	DR	CR	DR	CR	DR	CR	DR	CR
cash	1,000
accts. rec.	400
supplies	900
equipment	750
Accts. payable		700
capital		1,950
withdrawals	200
fees earned		900
sal. expense	300
totals	3,550

Quiz 4: The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The capital balance amount shown in the balance sheet column of the worksheet represents

On the worksheet, the Income Statement debit column totaled $800 and the credit column totaled $1,200. What is the amount of Net Income?

The ending figure for capital, used on the balance sheet, will be obtained from

Mavis Company took inventory and recorded the consumption of supplies. How will this affect the balance sheet?

The amount for withdrawals, to be used on the Statement of Owner's Equity, would be obtained from

Which of the financial statements is prepared first from the worksheet?

The Income Statement should be prepared before the worksheet.

It is very unusual for the totals of the two Income Statement columns to be identical before net income is added.

The beginning capital balance used on the Statement of Owner's Equity is best obtained from

To compute net income or net loss, the debit and credit columns of the income statement section of the worksheet are totaled, and the difference is placed on the smaller side.

The inside columns on the financial statements are used to

On the worksheet, the Balance Sheet debit column totaled $1,400 and the credit column totaled $1,300. What is the amount of Net Loss?

In the business world, financial statements are prepared from the

On the worksheet, the difference between the debits and credits in the income statement columns would be the net income or net loss for the period.

On the worksheet in the final two columns - the debits will always equal the credits before net income is added.