Exam 4: Completing the Accounting Cycle

Closing entries may be prepared from all of the following except

IFRS

Closing entries are made

Current assets are customarily the first items listed on a classified balance sheet.

These financial statement items are for Rugen Company at year-end July 31 2016. Salaries and wages payable \ 2,980 Salaries and wages expense 45,700 Utilities expense 21,100 Equipment 38,000 Accounts payable 4,100 Service revenue 57,200 Rent revenue 6,500 Notes payable (long-term) \ 3,000 Cash 5,200 Accounts receivable 9,780 Accumulated depreciation 6,000 Owner's Drawings 4,000 Depreciation expense 4,000 Omer's capital (beginning 48,000 of the vear) Instructions (a) Prepare an income statement and an owner's equity statement for the year. The owner did not make any new investments during the year. (b) Prepare a classified balance sheet at July 31.

The post-closing trial balance contains only

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 be depreciated at all. For another this is a privately held company and so they don't need to worry about misleading investors. All the owners know about and approve the depreciation policy. Required: What are the ethical issues in this situation?

Each of the following accounts is closed to Income Summary except

An intangible asset

Which of the following steps in the accounting cycle would not generally be performed daily?

If a company utilizes reversing entries they will

The income summary account

An unacceptable way to make a correcting entry is to

After closing entries are posted the balance in the owner's capital account in the ledger will be equal to

The income statement for the year 2016 of Bugati Co. contains the following information: $\begin{array}{lr}\text { Revenues } &&\$73,000 \\\text { Expenses: } & \\\text { Salaries and Wages Expense } & \$ 43,000 \\\text { Rent Expense } &12,000 \\\text { Advertising Expense } & 11,000 \\\text { Supplies Expense } &6,000 \\\text { Utilities Expense }& 3,500\\\text { Insurance Expense }&4,000 \\\quad \text { Total expenses } &&79,500 \\\text { Net income (loss)} &&\$(6,500)\end{array}$ At January 1 2016 Bugati reported owner's equity of $50000. Owner drawings for the year totalled $13000. At December 31 2016 the company will report owner's equity of

Prepare the necessary correcting entry for each of the following. a. A collection on account of $350 from a customer was credited to Accounts Receivable $530 and debited to Cash $530. b. The purchase of supplies on account for $310 was recorded as a debit to Equipment $310 and a credit to Accounts Payable $310.

The steps in the preparation of a worksheet do not include

The following information is for Qwik Auto Supplies: Qwik Auto Supplies Balance Sheet December 31, 2016 Cash \ 45,000 Prepaid Insurance 80,000 Accounts Receivable 110,000 Inventory 140,000 Land Held for Investme 185,000 Land 250,000 Building \ 200,000 Less Accumulated Depreciation (50,000) 150,000 Trademark 140,000 Total Assets \1 ,100,000 Accounts Payable \ 140,000 Salaries and Wages Payable 60,000 Mortgage Payable 150,000 Total Liabilities 350,000 Owner's Capital 750,000 Total Liabilities and Owner's Equity \1 ,100,000 The total dollar amount of assets to be classified as current assets is

Liabilities are generally classified as either ______________ or ______________ on a classified balance sheet.

The income statement for the year 2016 of Bugati Co. contains the following information: $\begin{array}{lr}\text { Revenues } &&\$73,000 \\\text { Expenses: } & \\\text { Salaries and Wages Expense } & \$ 43,000 \\\text { Rent Expense } &12,000 \\\text { Advertising Expense } & 11,000 \\\text { Supplies Expense } &6,000 \\\text { Utilities Expense }& 3,500\\\text { Insurance Expense }&4,000 \\\quad \text { Total expenses } &&79,500 \\\text { Net income (loss)} &&\$(6,500)\end{array}$ The entry to close the expense accounts includes a