Exam 4: Completing the Accounting Cycle

A lawyer collected $520 of legal fees in advance. He erroneously debited Cash for $250 and credited Accounts Receivable for $250. The correcting entry is a. Cash 250 Accounts Receivable 270 Unearned Service Revenue 520 b. Cash 520 Accounts Receivable 520 c. Cash 270 Accounts Receivable 250 Unearned Service Revenue 520 d. Cash 270 Accounts Receivable 270

Hunter Company prepared the following adjusting entries at year end on December 31 2016: In an effort to minimize errors in recording transactions Hunter Company utilizes reversing entries. Instructions Prepare reversing entries on January 1 2017 for the adjusting entries given where appropriate.

The adjustments on a worksheet can be posted directly to the accounts in the ledger from the worksheet.

Prepare the necessary correcting entry for each of the following. a. A payment on account of $720 was debited to Accounts Payable $270 and credited to Cash $270. b. The collection of Accounts Receivable of $570 was recorded as a debit to Cash $570 and a credit to Service Revenue $570.

When using a worksheet adjusting entries are journalized

On March 8 Saltwater Taffy Company bought supplies on account from the Sweet Honey Company for $440. Saltwater Taffy Company incorrectly debited Equipment for $400 and credited Accounts Payable for $400. The entries have been posted to the ledger. The correcting entry should be: a. Supplies 440 Accounts Payable 440 b. Supplies 440 Accounts Payable 400 Equipment. 40 c. Supplies 440 Equipment. 440 d. Supplies 440 Equipment 400 Accounts Payable 40

The following information is for Central Avenue Real Estate: Central Avenue Real Estate Balance Sheet December 31, 2016 Cash \ 25,000 Prepaid Insurance 40,000 Accounts Receivable 50,000 Inventory 80,000 Land Held for Investme 75,000 Land 120,000 Building \ 110,000 Less Accumulated Depreciation (20,000) 90,000 Trademark 70,000 Total Assets \5 50,000 Accounts Payable \ 60,000 Salaries and Wages Payable 25,000 Mortgage Payable 85,000 Total Liabilities 170,000 Owner's Capital 380,000 Total Liabilities and Owner's Equity \ 550,0000 The total dollar amount of liabilities to be classified as current liabilities is

The adjustments entered in the adjustments columns of a worksheet are

The following items are taken from the financial statements of the Freight Service for the year ending December 31 2016: Accounts payable 19,000 Accounts receivable 13,000 Accumulated depreciation - equipment 26,000 Advertising expense 21,200 Cash 15,000 Owner's capital (1/1/16) 104,000 Owner's drawings 11,000 Depreciation expense 12,000 Insurance expense 3,800 Note payable, due 6/30/17 72,000 Prepaid insurance (12-month policy) 7,200 Rent expense 16,000 Salaries and wages expense 32,000 Service revenue 135,000 Supplies 5,000 Supplies expense 6,000 Equipment 210,000 What are total current liabilities at December 31 2016?

The balances that appear on the post-closing trial balance will match the

Which of the following is a true statement about closing the books of a proprietorship?

Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure.

Indicate the worksheet column (income statement Dr. balance sheet Cr. etc.) to which each of the following accounts would be extended. a. Accounts Receivable b. Accumulated Depreciation-Equip. c. Service Revenue d. Interest Expense e. Owner's Drawings f. Unearned Service Revenue

The owner's drawings account is a permanent account whose balance is carried forward to the next accounting period.

A post-closing trial balance should be prepared

Closing entries are journalized after adjusting entries have been journalized.

On September 23 Jerra Nova Company received a $480 check from Paddle Board Inc. for services to be performed in the future. The bookkeeper for Jerra Nova Company incorrectly debited Cash for $480 and credited Accounts Receivable for $480. The amounts have been posted to the ledger. To correct this entry the bookkeeper should

All of the following statements about the post-closing trial balance are correct except it