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

When historical cost is used in the accounting records, the book value of the asset is

Not recording the Prepaid Rent used causes

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

Withdrawals would most likely be found in which column of the worksheet?

Determine the ending owner's equity of a business having a beginning owner's equity of $15,200, withdrawals of $2,420, and net income of $16,500.

On November 1, Juan paid $24,000 in advance for a year's rent. The November 30 adjusting entry for rent expense should include

The debits must equal credits on the adjusted trial balance columns of the worksheet.

Which of the following is most likely to result in an adjusting entry at the end of the period?

On a worksheet, the income statement debit column totals $10,000 and the credit column totals $9,800. Which of the following statements is CORRECT?

Kiran's Safety Training Academy purchased a one-year insurance policy for $3,600. The adjusting entry for one month would include

From the following data, journalize the adjusting entries in proper form for the month. Omit descriptions. (a) Building with a cost of $200,000 and a residual value of $50,000 has an expected life of 10 years. (b) Wages for a week are $3,000 and 3 days must be accrued salaries. (c) Supplies ledger balance $1,500, supplies on hand $200.

The estimated value of an item at the end of its useful life is

Adjusting entries bring the ledger accounts up to date.

Residual value is the

Adjusting entries affect

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

Discuss the benefits of the worksheet. Explain how the financial reports are prepared from the worksheet.

What is the purpose of adjusting entries? Discuss the effect of not preparing adjusting entries on various accounts.

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

	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	________	________	________	________

The use of straight-line depreciation results in equal amounts of depreciation being taken over a period of time.