Exam 4: Completing the Accounting Cycle

The final closing entry to be journalized is typically the entry that closes the

In one closing entry Owner's Drawings is credited and Income Summary is debited.

After a worksheet has been completed the statement columns contain all data that are required for the preparation of financial statements.

To close net income to owner's capital Income Summary is debited and Owner's Capital is credited.

The use of fair value to report assets

The account balances appearing on the trial balance (below) were taken from the general ledger of Speedy Copy Shop at September 30. Additional information for the month of September which has not yet been recorded in the accounts is as follows: (a) A physical count of supplies indicates $500 on hand at September 30. (b) The amount of insurance that expired in the month of September was $400. (c) Depreciation on equipment for September was $600. (d) Rent owed on the copy shop for the month of September was $750 but will not be paid until October. Instructions Using the above information complete the worksheet on the following page for Speedy Copy Shop for the month of September.

The operating cycle of a company is determined by the number of years the company has been operating.

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

Which one of the following statements concerning the accounting cycle is incorrect?

If the total debit column exceeds the total credit column of the income statement columns on a worksheet then the company has

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?

The income statement for the month of June 2016 of Snap Shot Inc. contains the following information: Revenues \7 ,300 Expenses: Salaries and Wages Expense \ 3,000 Rent Expense 1,300 Advertising Expense 700 Supplies Expense 200 Insurance Expense 100 Total expenses 5,300 Net income \2 ,000 The entry to close the expense accounts includes a

The purpose of the post-closing trial balance is to

The income statement for the year 2016 of Bugati Co. contains the following information: $\begin{array}{lr}\text { Revenues } &&\$73,000 \\\text { Expenses: } & \\\text { Salaries and Wages Expense } & \$ 43,000 \\\text { Rent Expense } &12,000 \\\text { Advertising Expense } & 11,000 \\\text { Supplies Expense } &6,000 \\\text { Utilities Expense }& 3,500\\\text { Insurance Expense }&4,000 \\\quad \text { Total expenses } &&79,500 \\\text { Net income (loss)} &&\$(6,500)\end{array}$ After the revenue and expense accounts have been closed the balance in Income Summary will be

Assuming that there is a net loss for the period debits equal credits in all but which section of the worksheet?

A liability is classified as a current liability if the company is to pay it within the forthcoming year.

The income statement for the month of June 2016 of Snap Shot Inc. contains the following information: Revenues \7 ,300 Expenses: Salaries and Wages Expense \ 3,000 Rent Expense 1,300 Advertising Expense 700 Supplies Expense 200 Insurance Expense 100 Total expenses 5,300 Net income \2 ,000 After the revenue and expense accounts have been closed the balance in Income Summary will be

When constructing a worksheet accounts are often needed that are not listed in the trial balance already entered on the worksheet from the ledger. Where should these additional accounts be shown on the worksheet?

The following items were taken from the financial statements of Rivera Company. (All dollars are in thousands.) Instructions Prepare a classified balance sheet in good form as of December 31 2016.