Test bank accounting 25th editon warren chapter 4 completing the accounting cycle

Chapter 4--Completing the Accounting Cycle
Student: ___________________________________________________________________________
1. After analyzing transactions, the next step would be to post the transactions in the ledger.
True False

2. The most important output of the accounting cycle is the financial statements.
True False

3. The work sheet is not considered a part of the formal accounting records.
True False

4. Cross-referencing is useful in assuring that the debits and credits are in balance.
True False

5. When accounts do not appear on the unadjusted trial balance but are needed to post adjustments, they are
simply added to the account title column.
True False

6. Once the adjusted trial balance is in balance, the flow of accounts will now go into the financial statements.
True False

7. There is really no benefit in preparing financial statements in any particular order.
True False

8. Round tripping is a fraudulent scheme where business A artificially inflates revenue by lending money to
customer B who uses that money to buy products from A.
True False


9. On the income statement, miscellaneous expenses are usually presented as the last item without regard to the
dollar amount.

True False

10. The usual presentation of the statement of owner's equity is (1) Beginning capital, (2) Net income or loss,
(3) Drawing, (4) Owner's contributions, (5) Ending capital.
True False

11. The difference between a classified balance sheet and one that is not classified is that the classified one has
subheadings.
True False

12. Cash and other assets that may reasonably be expected to be realized in cash, sold, or consumed through the
normal operations of a business, usually longer than one year, are called current assets.
True False

13. Prepaid Insurance is an example of a current asset.
True False

14. Land is an example of a plant asset.
True False

15. Liabilities that will be due within one year or less and that are to be paid out of current assets are called
current liabilities.
True False

16. The amount of the net income for a period appears on both the income statement and the balance sheet for
that period.
True False

17. Accrued taxes payable are generally reported on the balance sheet as a current liability.
True False

18. At the end of the fiscal period, prepaid expenses are reported on the income statement as expenses.
True False

19. Office Equipment is an example of a current asset account.
True False

20. Capital and Drawing are reported in the owner's equity section of the balance sheet.
True False

21. Deferred expenses that benefit a relatively short period of time are listed on the balance sheet as current
assets.
True False

22. Unearned revenues that will be earned in a relatively short period of time are listed on the balance sheet as
current assets.
True False

23. Accrued expenses are ordinarily listed on the balance sheet as current assets.
True False

24. Accrued revenues are ordinarily listed on the balance sheet as current liabilities.
True False

25. The income statement is prepared from the adjusted trial balance or the income statement columns on the
work sheet.
True False

26. Examples of temporary accounts are supplies and prepaid expenses which are in the ledger for just a short

time before they expire.
True False


27. Accumulated Depreciation is a permanent account.
True False

28. The drawing account is a temporary account.
True False

29. The balance sheet accounts are referred to as real or permanent accounts.
True False

30. Journalizing and posting the adjustments and closing entries updates the ledger for the new accounting
period.
True False

31. The income summary account is closed to the owner's capital account.
True False

32. The accumulated depreciation account is closed to the income summary account.
True False

33. The drawing account is closed to the income summary account.
True False

34. The trial balance prepared after all the closing entries have been posted is called a pre-closing trial balance.
True False

35. Entries required to close the balances of the temporary accounts at the end of the period are called final

entries.
True False

36. Journalizing and posting closing entries must be completed before financial statements can be prepared.
True False


37. During the closing process, some balance sheet accounts are closed and end the period with a zero balance.
True False

38. Closing entries are entered directly on to the work sheet.
True False

39. The post-closing trial balance will generally have fewer accounts than the trial balance.
True False

40. A post-closing trial balance contains only asset and liability accounts.
True False

41. A post-closing trial balance should be prepared before the financial statements are prepared.
True False

42. Assets, liabilities, and owner’s capital are real accounts and do not get closed at the end of the period.
True False

43. The income summary account is also known as the clearing account.
True False

44. All income statement accounts will be closed at the end of the period.
True False

45. Balance Sheet accounts are not considered real accounts.
True False

46. It is not necessary to post the closing entries to the general ledger.
True False


47. Once an account has been closed for the period, inserting a line in the balance columns zeros out the
account, making it ready for the following period.
True False

48. The last step of the accounting cycle is to prepare a post-closing trial balance.
True False

49. The accounting cycle begins with preparing an unadjusted trial balance.
True False

50. Financial statements should be prepared before the closing entries are journalized and posted.
True False

51. The unadjusted, adjusted, and final trial balances are prepared during the accounting cycle of a period.
True False

52. Any twelve-month accounting period adopted by a company is known as its fiscal year.
True False

53. A fiscal year that ends when business activities have reached their lowest point is called the natural business
year.
True False

54. All companies must use a calendar year as their fiscal year.
True False

55. The majority of businesses end their fiscal year on December 31.
True False


56. The balances of the capital accounts from the Adjusted Trial Balance of the work sheet are extended to the
Statement of Owner’s Equity columns.
True False

57. The work sheet is a working paper that accountants can use to summarize adjusting entries and the account
balances for the financial statements.
True False

58. In a computerized accounting system, a work sheet may not be necessary because the software program
automatically posts entries to the accounts and prepares financial statements.
True False

59. The trial balance may be listed on the work sheet instead of being prepared separately.
True False

60. The totals of the Adjusted Trial Balance columns on a work sheet will always be the sum of the Trial
Balance column totals and the Adjustments column totals.
True False

61. A work sheet heading is dated for a period of time.
True False

62. On the work sheet, the capital and drawing account balances are extended to the Balance Sheet columns.
True False

63. After the account balances have been extended from the Adjusted Trial Balance columns on the work sheet,
the difference between the initial totals of the Balance Sheet debit and credit columns is Net Income or Net
Loss.
True False

64. After Net Income or Loss is entered on the work sheet, the debit column total must equal the credit column
total for the Balance Sheet pair of columns.
True False


65. A net loss is shown on the work sheet in the credit columns of both the Income Statement columns and the
Balance Sheet columns.
True False

66. Net income is shown on the work sheet in the Income Statement debit column and the Balance Sheet credit
column.
True False

67. If the totals of the Income Statement debit and credit columns of a work sheet are $27,000 and $29,000,
respectively, after all account balances have been extended, the amount of the net loss is $2,000.
True False

68. The worksheet and the financial statements both require dollar signs.
True False

69.
The balance in the capital account on the worksheet will equal the amount presented in the balance sheet.

True False

70. Since the adjustments are entered on the work sheet, it is not necessary to record them in the journal or post
them to the ledger.
True False

71. The chart of accounts, the journal, and the ledger are essential parts of the accounting system.
True False

72. The closing process is sometimes referred to as closing the books.
True False

73. Accounts reported on the balance sheet that are carried forward from year to year are known as permanent
accounts.
True False


74. Real accounts are not permanent accounts.
True False

75. In the accounting cycle, the last step is
A. preparing the financial statements
B. journalizing and posting the adjusting entries
C. preparing a post-closing trial balance
D. journalizing and posting the closing entries

76. During the end-of-period processing which of the following best describes the logical order of this process
A. Preparation of adjustments, adjusted trial balance, financial statements
B. Preparation of Income Statement, adjusted trial balance, Balance Sheet
C. Preparation of adjusted trial balance, cross-referencing, journalizing

D. Preparation of adjustments, adjusted trial balance, posting

77. What is the major difference between the Unadjusted Trial Balance and the Adjusted Trial Balance?
A. The Adjusted Trial Balance will show the net income (loss) as an additional account.
B. Unlike the Adjusted Trial Balance, the Unadjusted Trial Balance will continue with the end-of-period
processing even if it is not in balance.
C. The Adjusted Trial Balance includes the postings of the adjustments for the period in the balance of the
accounts.
D. The Adjusted Trial Balance will be used to record the adjustments for the period.

78. Once the adjusting entries are posted, the Adjusted Trial Balance is prepared to
A. verify that the debits and credits are in balance.
B. verify that the net income correctly flows into the statement of owner’s equity from the income statement
C. verify that the net income (loss) is correct for the period.
D. verify the correct flow of accounts into the financial statements.

79. When preparing the statement of owner's equity, the beginning capital balance can always be found
A. in the Income Statement columns of the work sheet
B. in the statement of cash flows
C. in the general ledger
D. in the Balance Sheet columns of the work sheet


80. Accumulated Depreciation appears on the
A. balance sheet in the current assets section
B. balance sheet in the property, plant and equipment section
C. balance sheet in the long-term liabilities section
D. income statement as an operating expense

81. Notes Receivable due in 350 days appear on the

A. balance sheet in the current assets section
B. balance sheet in the fixed assets section
C. balance sheet in the current liabilities section
D. income statement as an expense

82. Unearned Fees appear on the
A. balance sheet in the current assets section
B. balance sheet as a current liability
C. balance sheet in the owner's equity section
D. income statement as revenue

83. Which one of the fixed asset accounts listed below will not have a related contra asset account?
A. Office Equipment
B. Land
C. Delivery Equipment
D. Building

84. Prepaid insurance is reported on the balance sheet as a
A. current asset
B. fixed asset
C. current liability
D. long-term liability

85. The income statement is prepared from:
A. the adjusted trial balance.
B. the income statement columns of the work sheet.
C. either the adjusted trial balance or the income statement columns of the work sheet.
D. both the adjusted trial balance and the income statement columns of the work sheet.

86. Round-tripping is when
A. a selling company sells to a customer company with huge discounts.
B. a selling company pretends to sell to a fictitious company with the intent of inflating revenues
C. a selling company lends money to a customer company to increase assets.
D. a selling company lends money to a customer company to be used to purchase goods from the selling
company.

87. The Statement of Owner’s Equity should be prepared
A. before the income statement and after the balance sheet
B. before the income statement and balance sheet
C. after the income statement and balance sheet
D. after the income statement and before the balance sheet

88. The income statement should be prepared
A. before the statement of owner’s equity and balance sheet
B. after the statement of owner’s equity and before the balance sheet
C. after the statement of owner’s equity and balance sheet
D. after the balance sheet and before the statement of owner’s equity

89. Use the following information in the adjusted trial balance for Stockton Company to answer the following
questions.

Stockton Company
Adjusted Trial Balance
For the Year ended December 31, 20XX
Cash
Accounts Receivable
Prepaid Expenses
Equipment
Accumulated Depreciation

Accounts Payable
Notes Payable
Bob Steely, Capital
Bob Steely, Withdrawals
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Depreciation Expense
Miscellaneous Expense
Totals

$ 6,530
2,100
700
13,700
$ 1,100
1,900
4,300
12,940
790
9,250
2,500
1,960
775
250
185
$29,490

$29,490

Determine the net income (loss) for the period.

A. Net Income $9,250
B. Net Loss $790
C. Net Loss $5,670
D. Net Income $3,580
90. Use the following information in the adjusted trial balance for Stockton Company to answer the following
questions.

Stockton Company
Adjusted Trial Balance
For the Year ended December 31, 20XX
Cash
Accounts Receivable
Prepaid Expenses
Equipment
Accumulated Depreciation
Accounts Payable
Notes Payable
Bob Steely, Capital
Bob Steely, Withdrawals
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Depreciation Expense
Miscellaneous Expense
Totals

Determine the Owner’s Equity ending balance for the period.

A. $12,150
B. $15,730
C. $6,480
D. $21,400

$ 6,530
2,100
700
13,700
$ 1,100
1,900
4,300
12,940
790
9,250
2,500
1,960
775
250
185
$29,490

$29,490


91. Use the following information in the adjusted trial balance for Stockton Company to answer the following
questions.

Stockton Company
Adjusted Trial Balance
For the Year ended December 31, 20XX
Cash
Accounts Receivable
Prepaid Expenses
Equipment
Accumulated Depreciation
Accounts Payable
Notes Payable
Bob Steely, Capital
Bob Steely, Withdrawals
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Depreciation Expense
Miscellaneous Expense
Totals

$ 6,530
2,100
700
13,700
$ 1,100
1,900
4,300
12,940
790

9,250
2,500
1,960
775
250
185
$29,490

$29,490

Determine total assets.

A. $24,130
B. $15,830
C. $21,930
D. $23,030
92. Use the following information in the adjusted trial balance for Stockton Company to answer the following
questions.

Stockton Company
Adjusted Trial Balance
For the Year ended December 31, 20XX
Cash
Accounts Receivable
Prepaid Expenses
Equipment
Accumulated Depreciation
Accounts Payable
Notes Payable
Bob Steely, Capital

Bob Steely, Withdrawals
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Depreciation Expense
Miscellaneous Expense
Totals

$ 6,530
2,100
700
13,700
$ 1,100
1,900
4,300
12,940
790
9,250
2,500
1,960
775
250
185
$29,490

$29,490


Determine the current assets.

A. $23,030
B. $9,330
C. $21,930
D. $8,630
93. Use the following information in the adjusted trial balance for Stockton Company to answer the following
questions.

Stockton Company
Adjusted Trial Balance
For the Year ended December 31, 20XX
Cash
Accounts Receivable
Prepaid Expenses
Equipment
Accumulated Depreciation
Accounts Payable
Notes Payable
Bob Steely, Capital
Bob Steely, Withdrawals
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Depreciation Expense
Miscellaneous Expense
Totals

$ 6,530
2,100

700
13,700
$ 1,100
1,900
4,300
12,940
790
9,250
2,500
1,960
775
250
185
$29,490

Determine the total liabilities for the period.

A. $1,900
B. $6,200
C. $4,300
D. $20,240
94. The Balance Sheet should be prepared
A. before the income statement and the statement of owner’s equity
B. before the income statement and after the statement of owner’s equity
C. after the income statement and the statement of owner’s equity
D. after the income statement and before the statement of owner’s equity

$29,490

95. The Statement of Owner’s Equity begins with the beginning balance followed by
A. plus Net Income (loss) less withdrawals
B. plus Net Income (loss) plus investments
C. plus investments less withdrawals
D. plus investments plus Net Income (loss) less withdrawals

96. The Income Statement will include the following accounts
A. Revenues less Expenses (ordered largest to smallest amount) with Miscellaneous Expense listed last
B. Revenues less Expenses (ordered smallest to largest amounts) with Miscellaneous Expense listed last
C. Revenues less Expenses (ordered in alphabetical order)
D. Revenues less Expenses (order is not important)

97. The classified Balance Sheet will subsection the assets section as follows
A. Current Assets and Other Assets
B. Current Assets and Property, Plant, and Equipment
C. Current Assets and Short-Term Assets
D. Other Assets and Property, Plant and Equipment

98. The classified Balance Sheet will divide its Liabilities Section as the following subsections
A. Current Liabilities and Long-Term Liabilities
B. Current Liabilities and Other Liabilities
C. Other Liabilities and Long-Term Liabilities
D. Present Liabilities and Tomorrow’s Liabilities

99. Short-term liabilities are those liabilities that
A. will be paid in less than one year
B. are due to be paid in 5 to 10 years
C. are due to be paid in more than one year
D. are owed to the owner and will never be paid

100. Owner’s Equity is
A. added to assets and the two are equal to liabilities
B. added to liabilities and the two are equal to assets
C. subtracted from liabilities and the net amount is equal to assets
D. equal to the total of assets and liabilities


101. Balance sheet accounts
A. represent amounts accumulated during a specific period of time
B. are called real accounts
C. have zero balances after the closing entries have been posted
D. are not affected by adjustments

102. On which financial statement will Income Summary be shown?
A. Statement of Owner’s Equity
B. Balance Sheet
C. Income Statement
D. No financial statement

103. Which of the following is not true about closing entries?
A. There are four closing entries that update the owner’s equity account.
B. After the second closing entry, the income summary account is equal to the net income or (loss) for the
period.
C. All real accounts are closed at the end of the period.
D. By closing nominal accounts at the end of the period to zero, it is possible to isolate next period’s
information correctly.

104. The income summary account is also called
A. the imprest account
B. the clearing account

C. the adjustments account
D. the helpful account

105. After posting the second closing entry to the income summary account, the balance will be equal to
A. zero.
B. owner’s equity.
C. revenues for the period
D. the net income or (loss) for the period.

106. What is the last account that should be listed in the Post Closing Trial Balance?
A. Income Summary
B. Capital account
C. Cash
D. Fees Earned


107. Which of the following account groups are all considered nominal accounts?
A. Cash, Owner’s Equity, Wages Payable
B. Prepaid Insurance, Property, Plant & Equipment, Fees Earned
C. Capital Account, Dividend Account, Income Summary
D. Rent Revenue, Fees Earned, Miscellaneous Expense

108. There are four closing entries. The first one is to close ____, the second one is to close ____, the third one
is to close ____, and the last one is to close ____.
A. Revenues, expenses, income summary, drawing account
B. Expenses, assets, income summary, capital account
C. Capital account, drawing account, income summary, assets
D. Drawing account, income summary, expenses, revenues

109. Closing entries

A. need not be journalized if adjusting entries are prepared
B. need not be posted if the financial statements are prepared from the work sheet
C. are not needed if adjusting entries are prepared
D. must be journalized and posted

110. Closing entries are dated in the journal as of
A. the date they are actually journalized, although they are generally prepared after the end of the accounting
period
B. the last day of the accounting period, although they are actually journalized after the end of the accounting
period
C. the first day of the accounting period, although they are actually journalized after the end of the accounting
period
D. the first day of the subsequent accounting period

111. Which of the accounts below would be closed by posting a debit to the account?
A. Unearned Revenue
B. Fees Earned
C. Josh Morton, Drawing
D. Miscellaneous Expense

112. Which of the following accounts should be closed to Income Summary at the end of the fiscal year?
A. Supplies Expense
B. Accumulated Depreciation
C. Prepaid Insurance
D. Unearned Rent


113. Which of the following accounts will not be closed to Income Summary at the end of the fiscal year?
A. Salaries Expense
B. Fees Earned

C. Unearned Rent
D. Depreciation Expense

114. Which of the following accounts will be closed to the Capital account at the end of the fiscal year?
A. Rent Expense
B. Fees Earned
C. Income Summary
D. Depreciation Expense

115. The entry to close the appropriate insurance account at the end of the accounting period is
A. debit Income Summary; credit Prepaid Insurance
B. debit Prepaid Insurance; credit Income Summary
C. debit Insurance Expense; credit Income Summary
D. debit Income Summary; credit Insurance Expense

116. Which of the following accounts ordinarily appears in the post-closing trial balance?
A. Fees Earned
B. Supplies Expense
C. Zane White, Drawing
D. Unearned Rent

117. The post-closing trial balance differs from the adjusted trial balance in that it
A. does not take into account closing entries
B. does not take into account adjusting entries
C. does not include balance sheet accounts
D. does not include income statement accounts

118. The following accounts were taken from the Adjusted Trial Balance columns of the work sheet:

Accumulated Depreciation

Fees Earned
Depreciation Expense
Insurance Expense
Prepaid Insurance
Supplies
Supplies Expense

$ 3,200
17,400
1,300
200
4,800
900
3,800


Net income for the period is

A. $3,200
B. $12,100
C. $17,400
D. $8,900
119. A summary of selected ledger accounts appear below for Alberto’s Plumbing Services for the current
calendar year end.

Alberto, Capital
12/31

8,500

1/1
12/31

6,500
15,000

Alberto, Drawing
6/30
11/30

3,500
5,000

12/31

8,500

Income Summary
12/31
12/31

18,500
15,000

12/31

33,500

Net income for the period is

A. $13,000
B. $33,500
C. $15,000
D. $18,500
120. Amir Designs purchased a one-year liability insurance policy on March 1st of this year for $7,200 and
recorded it as a prepaid expense. Which of the following amounts would be recorded for insurance expense
during the adjusting process at the end of Amir’s first month of operations on March 31st?
A. $7,200
B. $720
C. $600
D. $6,600


121. The journal entry to close the Fees Earned, $750, and Rent Revenue, $175, accounts on December 31st
during the closing process would be:
A. Dec. 31 Fees Earned
750
Rent Revenue
175
Income Summary
925
B. Dec. 31 Income Summary
925
Fees Earned
750
Rent Revenue
175
C. Dec. 31 Revenues
925
Income Summary

925
D. Dec. 31 Income Summary
925
Revenues
925

122. Use the following worksheet to answer the following questions.

Account Title
Cash
Accounts Receivable
Supplies
Equipment
Accumulated Depr-Equip
Accounts Payable
Wages Payable
C. Finley, Capital
C. Finley, Drawing
Fees Earned
Wages Expense
Rent Expense
Depreciation Expense
Totals
Net Income (Loss)

Finley Company
Worksheet
For the Year
Ended December
31, 2014

Adjusted Trial Income Statement
Balance
Debit
Credit
48,000
18,000
6,000
57,000
18,000
25,000
6,000
33,000
3,000
155,000
63,000
27,000
15,000
237,000
237,000

Balance Sheet
Debit

Credit

Debit
48,000
18,000
6,000
57,000

Credit

18,000
25,000
6,000
33,000
3,000
155,000
63,000
27,000
15,000
105,000
50,000
155,000

The journal entry to close revenues would be:

A. debit Income Summary $155,000, credit Fees Earned $155,000
B. debit C. Finley, Capital $155,000, credit Fees Earned $155,000
C. debit Fees Earned $155,000; credit Income Summary $155,000
D. credit Fees Earned $155,000; credit C. Finley, Capital $155,000

155,000

132,000

155,000

132,000

82,000
50,000
132,000


123. Use the following worksheet to answer the following questions.

Account Title
Cash
Accounts Receivable
Supplies
Equipment
Accumulated Depr-Equip
Accounts Payable
Wages Payable
C. Finley, Capital
C. Finley, Drawing
Fees Earned
Wages Expense
Rent Expense
Depreciation Expense
Totals
Net Income (Loss)

Finley Company
Worksheet
For the Year
Ended December
31, 2014

Adjusted Trial Income Statement
Balance
Debit
Credit
48,000
18,000
6,000
57,000
18,000
25,000
6,000
33,000
3,000
155,000
63,000
27,000
15,000
237,000
237,000

Balance Sheet
Debit

Credit

Debit
48,000
18,000
6,000
57,000

Credit

18,000
25,000
6,000
33,000
3,000
155,000
63,000
27,000
15,000
105,000
50,000
155,000

Based on the preceding trial balance, the entry to close expenses would be:

A. Wages Expense
63,000
Rent Expense
27,000
Depreciation Expense 15,000
Income Summary
105,000
B. Expenses
105,000
Income Summary
105,000
C. Wages Expense

63,000
Rent Expense
27,000
Depreciation Expense 15,000
C. Finley, Drawing
105,000
D. Income Summary
105,000
Wages Expense
63,000
Rent Expense
27,000
Depreciation Expense 15,000
124. Use the following worksheet to answer the following questions.

Finley Company
Worksheet
For the Year
Ended December
31, 2014
Adjusted Trial Income Statement Balance Sheet
Balance

155,000

132,000

155,000

132,000

82,000
50,000
132,000


Account Title
Cash
Accounts Receivable
Supplies
Equipment
Accumulated Depr-Equip
Accounts Payable
Wages Payable
C. Finley, Capital
C. Finley, Drawing
Fees Earned
Wages Expense
Rent Expense
Depreciation Expense
Totals
Net Income (Loss)

Debit
48,000
18,000
6,000
57,000

Credit

Debit

Credit

Debit
48,000
18,000
6,000
57,000

18,000
25,000
6,000
33,000

18,000
25,000
6,000
33,000

3,000

3,000
155,000

63,000
27,000
15,000
237,000

Credit

237,000

155,000
63,000
27,000
15,000
105,000
50,000
155,000

155,000

132,000

155,000

132,000

Credit

Debit
48,000
18,000
6,000
57,000

82,000

50,000
132,000

Based on the preceding trial balance, the entry to close income summary would be:

A. debit C. Finley, Capital $50,000; credit Income Summary $50,000
B. debit Income Summary $155,000; credit C. Finley, Capital $155,000
C. debit Income Summary $50,000, credit C. Finley, Capital $50,000
D. debit C. Finley, Capital $9,000; credit Income Summary $9,000
125. Use the following worksheet to answer the following questions.

Account Title
Cash
Accounts Receivable
Supplies
Equipment
Accumulated Depr-Equip
Accounts Payable
Wages Payable
C. Finley, Capital
C. Finley, Drawing
Fees Earned
Wages Expense
Rent Expense
Depreciation Expense
Totals
Net Income (Loss)

Finley Company
Worksheet

For the Year
Ended December
31, 2014
Adjusted Trial Income Statement
Balance
Debit
Credit
48,000
18,000
6,000
57,000
18,000
25,000
6,000
33,000
3,000
155,000
63,000
27,000
15,000
237,000
237,000

Balance Sheet
Debit

Credit

18,000
25,000

6,000
33,000
3,000
155,000
63,000
27,000
15,000
105,000
50,000
155,000

155,000

132,000

155,000

132,000

82,000
50,000
132,000


Based on the preceding trial balance, the entry to close C. Finley, Drawing would be:

A. debit C. Finley, Capital $3,000, credit C. Finley, Drawing $3,000
B. debit C. Finley, Capital $12,000, credit C. Finley, Drawing $12,000
C. debit C. Finley, Drawing $3,000; credit C. Finley, Capital $3,000
D. debit C. Finley, Drawing $12,000; credit C. Finley, Capital $12,000

126. Use the following worksheet to answer the following questions.

Account Title
Cash
Accounts Receivable
Supplies
Equipment
Accumulated Depr-Equip
Accounts Payable
Wages Payable
C. Finley, Capital
C. Finley, Drawing
Fees Earned
Wages Expense
Rent Expense
Depreciation Expense
Totals
Net Income (Loss)

Finley Company
Worksheet
For the Year
Ended December
31, 2014
Adjusted Trial Income Statement
Balance
Debit
Credit
48,000
18,000

6,000
57,000
18,000
25,000
6,000
33,000
3,000
155,000
63,000
27,000
15,000
237,000
237,000

Balance Sheet
Debit

Debit
48,000
18,000
6,000
57,000

Credit

18,000
25,000
6,000
33,000
3,000

155,000
63,000
27,000
15,000
105,000
50,000
155,000

Based on the preceding trial balance, the ending balance in C. Finley, Capital is:

A. $33,000
B. $80,000
C. $30,000
D. $83,000

Credit

155,000

132,000

155,000

132,000

82,000
50,000
132,000

127. The proper sequence of steps in the accounting cycle is as follows
A. analyze and record transactions, post transaction to the ledger, prepare a trial balance, prepare financial
statements, journalize closing entries, analyze adjustment data and prepare adjusting entries
B. prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements,
journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger
C. analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment
data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger,
and finally prepare a post-closing trial balance
D. prepare financial statements, journalize closing entries and post to the ledger, analyze and record
transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting
entries

128. The following are steps to the accounting cycle. Of the following, which step should be done first?
A. Closing entries are journalized and posted to the ledger.
B. Transactions are posted to the ledger.
C. Adjusting entries are journalized and posted to the ledger.
D. Financial statements are prepared.

129. The following are steps in the accounting cycle. Of the following, which would be prepared last?
A. An adjusted trial balance is prepared.
B. Transactions are posted to the ledger.
C. An unadjusted trial balance is prepared.
D. Adjusting entries are journalized and posted to the ledger.

130. The accounting cycle requires three trial balances be done. In what order should they be prepared?
A. Post-closing, unadjusted, adjusted
B. Unadjusted, post-closing, adjusted
C. Unadjusted, adjusted, post-closing
D. Post-closing, adjusted, unadjusted

131. The fiscal year selected by companies
A. is the same as the calendar year
B. begins with the first day of the month and ends on the last day of the twelfth month
C. must always begin on January 1
D. will change each year


132. A fiscal year
A. ordinarily begins on the first day of a month and ends on the last day of the following twelfth month
B. for a business is determined by the federal government
C. always begins on January 1 and ends on December 31 of the same year
D. should end at the height of the business's annual operating cycle

133. The natural business year
A. is a fiscal year that ends when business activities are at its lowest point.
B. is a calendar year that ends when business activities are at its lowest point.
C. is a fiscal year that ends when business activities are at its highest point.
D. is a calendar year that ends when business activities are at its highest point.

134. The worksheet
A. is an integral part of the accounting cycle
B. eliminates the need to rewrite the financial statements
C. is a working paper that is required
D. is used to summarize account balances and adjustments for the financial statements

135. Which one of the steps below is not aided by the preparation of the work sheet?
A. preparing the adjusted trial balance
B. posting to the general ledger
C. preparing the financial statements
D. preparing the closing entries

136. A work sheet includes columns for
A. adjusting entries
B. closing entries
C. reversing entries
D. adjusting and closing entries

137. When a work sheet is complete, the adjustment columns should have
A. total credits greater than total debits if a net income was earned
B. total debits greater than total credits if a net loss was incurred
C. total debits greater than total credits if a net income was earned
D. total debits equal total credits