Question 1

You have recently started to work for Thom Hanks, manufacturers of cemetery markers and monuments. During your first month at work, you inadvertently recorded as an expense, about $6,000 of prepayments for insurance. The financial statements had been released within the company when you discovered your error. The month-end closing had not been completed, however, and you were able to correct the accounts without incident.
Required:
Prepare a short note to accompany the re-released financial statements explaining the mistake.

Accepted Answer

The answer of You have recently started to work for...

Question 2

Journalizing and posting closing entries is a required step in the accounting cycle. Discuss why it is necessary to close the books at the end of an accounting period. If closing entries were not made, how would the preparation of financial statements be affected?

Accepted Answer

The answer of Journalizing and posting closing entries is a...

Question 3

A worksheet is an optional working tool used by accountants to facilitate the preparation of financial statements. Consider the steps followed in preparing a worksheet. How does the use of a worksheet assist the accountant? Could financial statements be prepared without a worksheet? Evaluate how the process would differ. Consider factors such as timeliness, accuracy, and efficiency in your evaluation.

Accepted Answer

The answer of A worksheet is an optional working tool...

Question 4

Distinguish between a correcting entry and an adjusting entry. Are correcting entries required?

Accepted Answer

The answer of Distinguish between a correcting entry and an...

Question 5

Under Protection provides underground storage facilities for companies desiring off-site storage of sensitive documents, computer records, and other items. They have developed a sophisticated surveillance and security system which they initially used in their own facilities, and have recently started to market elsewhere as well.
The underground storage facilities are made from natural caves in some instances (reinforced and modified as appropriate) and from excavations of natural rock formations in others. The land was purchased over ten years ago for a total of $2.5 million. The modifications have cost approximately $15 million more. The company has never depreciated its storage facilities because the market value of the property has continued to rise. Presently, the market price is between $30 and $40 million.
Betsy Brantley, a new accounting manager, questioned this depreciation policy. Will Gray, the controller, has told her that she needn't worry about it. For one thing, he says, this is really a special form of Land account, which should not Required:
What are the ethical issues in this situation?

Accepted Answer

The answer of Under Protection provides underground storage facilities for...

Question 6

Ann Conor owns a small personal training business. Ann is unsure about the closing entry process. Describe to Ann where and how closing entries are recorded in the accounting system. Explain the entries in detail.

Accepted Answer

The answer of Ann Conor owns a small personal training...

Quiz 6: Completing a Worksheet and Completing the Accounting Cycle

Journalizing and posting closing entries is a required step in the accounting cycle. Discuss why it is necessary to close the books at the end of an accounting period. If closing entries were not made, how would the preparation of financial statements be affected?

Distinguish between a correcting entry and an adjusting entry. Are correcting entries required?

Ann Conor owns a small personal training business. Ann is unsure about the closing entry process. Describe to Ann where and how closing entries are recorded in the accounting system. Explain the entries in detail.