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Accounting
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26 Nov 2019

1) The income statement is prepared from

either the adjusted trial balance or the Income Statementcolumns of the end-of-period spreadsheet

the adjusted trial balance

both the adjusted trial balance and the Income Statement columnsof the end-of-period spreadsheet

the Income Statement columns of the end-of-periodspreadsheet

2) Of the following steps of the accounting cycle, which stepshould be completed last?

An adjusted trial balance is prepared.

Transactions are posted to the ledger.

Adjusting entries are journalized and posted to the ledger.

An unadjusted trial balance is prepared.

3) Net income appears on the end-of-period spreadsheet inthe

credit column of the Income Statement columns

debit column of the Balance Sheet columns

debit column of the Income Statement columns

debit column of the Adjustments columns

4) The income statement should be prepared

before the retained earnings statement and balance sheet

after the retained earnings statement and balance sheet

after the retained earnings statement and before the balancesheet

after the balance sheet and before the retained earningsstatement

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Related questions

On December 31 adjusting entries for the following transactions.1. Fees accrued but not billed, $6,300. 2. The Supplies accountbalance on December 31, $4,750; Supplies on hand, $960. 3. Wagesaccrued but not paid, $2,700. 4. Depreciation of office equipment,$1,650. 5. Rent expired during year, $10,800. need help with ageneral journal The balances for the accounts listed below appearedin the Adjusted Trial Balance columns of the work sheet. Indicatewhether each balance should be extended to (a) the Income Statementcolumns or (b) the Balance Sheet columns. 1. Salaries Payable 2.Fees Earned 3. Accounts Payable 4. Common Stock 5. Supplies Expense6. Unearned Rent 7. Retained Earnings 8. Equipment 9. AccountsReceivable 10. Accumulated Depreciation 11. Salary Expense 12.Depreciation Expense The following accounts were taken from theAdjusted Trial Balance columns of the end-of-period spreadsheet forApril 30, for Finnegan Co.: Accounts Amount AccumulatedDepreciation $32,000 Fees Earned 78,000 Depreciation Expense 7,250Rent Expense 34,000 Prepaid Insurance 6,000 Supplies 400 SuppliesExpense 1,800 Required: Prepare an income statement. Be sure tocomplete the statement heading. Refer to the lists of Accounts inthe information given, Labels, and Amount Descriptions for theexact wording of the answer choices for text entries. You will notneed to enter colons (:) on the income statement. On January 1,Hannah's Pool Service Company had a retained earnings balance of$252,000. During the year Hannah's stockholders bought anadditional $32,000 in common stock and received dividends of$52,200. For the year ended December 31 Hannah's Pool ServiceCompany reported a net income of $73,200. Required: Prepare aretained earnings statement for the year ended December 31. Referto the Instructions and the lists of Labels and Amount Descriptionsfor the exact wording of the answer choices for text entries.“Less” or “Plus” will automatically appear if it is required. Besure to complete the statement heading. The following data weretaken from the Adjusted Trial Balance columns of the end-of-periodspreadsheet for April 30 for Abigail Company: Accounts AmountAccumulated Depreciation $42,400 Prepaid Rent 6,800 Supplies 850Unearned Fees 7,310 Trucks 49,300 Cash 3,400 Common Stock 2,000Retained Earnings ? Required: Prepare a classified balance sheet.Be sure to complete the statement heading. Refer to the lists ofAccounts in the information given, Labels, and Amount Descriptionsfor the exact wording of the answer choices for text entries. Youwill not need to enter colons (:) on the Balance Sheet. On thebasis of the following data taken from the Adjusted Trial Balancecolumns of the work sheet for the year ended March 31 for BanesDomino's Corporation. Banes Domino's Corporation ADJUSTED TRIALBALANCE December 31, 20-- ACCOUNT TITLE DEBIT CREDIT 1 Cash30,000.00 2 Accounts Receivable 45,200.00 3 Supplies 5,000.00 4Equipment 169,900.00 5 Accumulated Depreciation 32,000.00 6Accounts Payable 12,500.00 7 Common Stock 51,600.00 8 RetainedEarnings 20,000.00 9 Dividends 47,000.00 10 Fees Earned 510,000.0011 Salary Expense 244,500.00 12 Rent Expense 48,000.00 13Depreciation Expense 25,000.00 14 Supplies Expense 9,500.00 15Miscellaneous Expense 2,000.00 16 Totals 626,100.00 626,100.00Required: Journalize the four closing entries. Refer to the Chartof Accounts for exact wording of account titles.


The unadjusted trial balance of PS Music as of July 31, 2016, alongwith the adjustment data for the two months ended July 31, 2016,are shown in Chapter 3. Based upon the adjustment data, thefollowing adjusted trial balance was prepared:
PS Music
ADJUSTED TRIAL BALANCE
July 31, 2016

ACCOUNT TITLE DEBIT CREDIT
1
Cash
9,945.00

2
Accounts Receivable
4,150.00

3
Supplies
275.00

4
Prepaid Insurance
2,475.00

5
Office Equipment
7,500.00

6
Accumulated Depreciation-Office Equipment

50.00
7
Accounts Payable

8,350.00
8
Wages Payable

140.00
9
Unearned Revenue

3,600.00
10
Common Stock

9,000.00
11
Retained Earnings


12
Dividends
1,750.00

13
Income Summary


14
Fees Earned

21,200.00
15
Wages Expense
2,940.00

16
Office Rent Expense
2,550.00

17
Equipment Rent Expense
1,375.00

18
Utilities Expense
1,215.00

19
Music Expense
3,610.00

20
Advertising Expense
1,500.00

21
Supplies Expense
925.00

22
Insurance Expense
225.00

23
Depreciation Expense
50.00

24
Miscellaneous Expense
1,855.00

25
Totals
42,340.00
42,340.00

Required:

1. (Optional) Using the data from Chapter 3, prepare anend-of-period spreadsheet on a sheet of paper or using spreadsheetsoftware.
2. Prepare an income statement, a retained earnings statement, anda balance sheet.*
3.

A. Journalize the closing entries. Refer to the Chart ofAccounts for exact wording of account titles.
B. Post the closing entries. The income summary account is #34 inthe ledger of PS Music. Indicate closed accounts by inserting a 0(zero) in either of the Balance columns opposite the closing entry.No entry is required in the Item column.

4. Prepare a post-closing trial balance.

* For guidance in completing the financial statements, be sureto read the instructions above each statement carefully.


CHART OF ACCOUNTSPS MusicGeneral Ledger

ASSETS
11 Cash
12 Accounts Receivable
14 Supplies
15 Prepaid Insurance
17 Office Equipment
18 Accumulated Depreciation-Office Equipment

LIABILITIES
21 Accounts Payable
22 Wages Payable
23 Unearned Revenue

EQUITY
31 Common Stock
32 Retained Earnings
33 Dividends
34 Income Summary

REVENUE
41 Fees Earned

EXPENSES
50 Wages Expense
51 Office Rent Expense
52 Equipment Rent Expense
53 Utilities Expense
54 Music Expense
55 Advertising Expense
56 Supplies Expense
57 Insurance Expense
58 Depreciation Expense
59 Miscellaneous Expense

LabelsCash flows from financing activitiesCash flows frominvesting activitiesCash flows from operating activitiesCurrentassetsCurrent liabilitiesExpensesFor the Two Months Ended July 31,2016July 31, 2016Property, plant, and equipmentAmountDescriptionsAdd dividendsDecrease in retained earningsIncrease inretained earningsNet decrease in cash during June and JulyNetincrease in cash during June and JulyLess dividendsNet incomeNetlossRetained earnings, June 1, 2016Retained earnings, July 31,2016Total assetsTotal current assetsTotal expensesTotalliabilitiesTotal liabilities and stockholders’ equityTotalproperty, plant, and equipmentTotal stockholders’ equity

QUESTION 1

Accounting is an information and measurement system thatidentifies, records, and communicates relevant, reliable, andcomparable information about an organization's businessactivities.
True
False

QUESTION 2

We use the accounting equation to identify what a company ownsand owes. The accounting equation is:
Assets = Liabilities + Equity
Assets = Liabilities – Equity
Assets = Liabilities + Revenues
Equity = Liabilities + Revenues
QUESTION 3

______ are beliefs that distinguish right from wrong. Thesebeliefs are accepted standards of gauging good and dishonestbehavior.
Accounting Standards
Ethics
Generally Accepted Accounting Principles
FASB
QUESTION 4

The _____ is a collection of all accounts within a company’saccounting system.
General Journal
Chart of Accounts
General Ledger
Balance Sheet
QUESTION 5

We use the accounting equation to identify what a company ownsand owes. _____ are resources a company owns or controls, _____ areclaims creditors have against a company’s assets, and _____ is theowner’s claim on a company’s assets.

QUESTION 6

In double entry accounting a credit to an asset account willrepresent an increase in the asset account balance; and a debitwill represent a decrease in the asset account balance.
True
False
QUESTION 7

The purchase of supplies on credit will ____ assets and ____liabilities.
Increase, decrease
Decrease, increase
Decrease, decrease
Increase, increase
QUESTION 8

During the accounting cycle, we analyze transactions toprepare statements.
True
False
QUESTION 9

The supplies account for a company has a $1,000 debit balanceat the beginning of the year. Supplies of $2,000 were purchasedduring the year and debited to the Supplies account. A December 31physical count shows $500 of supplies remaining at the end of theyear. Assume no other adjusting entries are made during the year.Using the 3-step process for creating adjusting entries, calculatethe adjustment amount for supplies (no journal entry isrequired).
$1,000 adjustment
$2,000 adjustment
$2,500 adjustment
$3,000 adjustment
QUESTION 10

During the accounting cycle, to complete step 7 youwould:
Prepare post-closing trial balance--Test clerical accuracy ofthe closing procedures.
Prepare adjusted trial balance--Summarize adjusted ledgeraccounts and amounts.
Prepare statements--Use adjusted trial balance to preparefinancial statements.
Close--Journalize and post entries to close temporaryaccounts.
QUESTION 11

The three financial statements that should be prepared duringthe accounting cycle are the:
Balance sheet, adjusted trial balance, income statement
Balance sheet, unadjusted trial balance, Statement of Owner’sEquity
Income statement, adjusted trial balance, Statement of Owner’sEquity
Balance sheet, Income statement, Statement of Owner’sEquity

QUESTION 12

An optional working paper, which is not a required report oran accounting record, but is used to prepare a company's unadjustedtrial balance, adjusting entries, adjusted trial balance, andfinancial statements is a(n):
Adjusted trial balance
Worksheet
Post-closing trial balance
Unadjusted trial balance
General ledger
QUESTION 13

The two goals for completing the closing process are:
To identify accounts for closing and record the closingentries
To journalize and post transactions
To post transactions and prepare post-closing trialbalance
To reset revenues, expenses, and withdrawal account balancesto zero at the end of each period, and help summarize an accountingperiod’s revenues and expenses.
QUESTION 14

Fill in the Blank: The _____ describes a company’s financialposition – by the types and amounts of assets, liabilities, andequity -- at a point in time.

QUESTION 15

Return on Assets is useful in evaluating management, analyzingand forecasting profits, and planning activities.
True
False

QUESTION 16

The Income Statement:
Identifies cash inflows (receipts) and cash outflows(payments) over a period-of-time.
Summarize adjusted ledger accounts and amounts
Describes a company’s revenues and expenses along with theresulting net income or net loss -- over a period-of-time due toearnings activities
Resets revenues, expenses, and withdrawal account balances tozero at the end of each period.
QUESTION 17

An internal control system consists of the policies andprocedures used to:
Protect assets and Ensure reliable accounting
Urge adherence to company policies and Promote efficientoperations
All of the above
None of the above.
QUESTION 18

The cost-benefit principle is the second limitation of_______.
Bank reconciliations
Petty cash controls
Voucher system of controls
Internal controls
QUESTION 19

The Unadjusted Trial Balance columns of a company's work sheetshows the Store Supplies account with a balance of $750. TheAdjustments columns shows a credit of $425 for supplies used duringthe period. The amount shown as Store Supplies in the Balance Sheetcolumns of the work sheet is:
$325 debit
$325 credit
$425 debit
$425 credit
QUESTION 20

A company shows a $600 balance in Prepaid Rent in theUnadjusted Trial Balance columns of the work sheet. The Adjustmentscolumns show expired rent of $200. This adjusting entry resultsin:
$200 decrease to net income
$200 increase to net income
$200 different between the debit and credit columns of theUnadjusted Trial Balance
An error in the Balance Sheet

QUESTION 21

This semester we have discussed four major financialstatements. List the 4 financial statements and describe them. Makesure to include how they flow together.

QUESTION 22

Explain the purpose of adjusting entries at the end of aperiod.

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