Exam 4: Completing the Accounting Cycle

The owner's drawings account is closed to the Income Summary account in order to properly determine net income (or loss) for the period.

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 Equipment 210,000 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 Copyright 7,500 The sub-classifications for assets on the company's classified balance sheet would include all of the following except

The relationship between current assets and current liabilities is important in evaluating a company's

If errors occur in the recording process they

After all closing entries have been journalized and posted the final step in the accounting cycle is to prepare a ______________ trial balance.

At April 1 2016 Spiderland Company reported a balance of $20000 in the Owner's Capital account. Spiderland Company earned revenues of $50000 and incurred expenses of $32000 during April 2016. The company had owner drawings of $10000 during the month. (a) Prepare the entries to close Income Summary and the Owner's Drawings acccount at April 30 2016. (b) What is the balance in Owner's Capital on the April 30 2016 post-closing trial balance?

The adjustments columns of the worksheet for Mandy Company are shown below. Instructions (a) Prepare the adjusting entries. (b) Assuming the adjusted trial balance amount for each account is normal indicate the financial statement column to which each balance should be extended.

Intangible assets are

Current liabilities are obligations that the company is to pay within the coming year.

The ______________ of a company is the average time that it takes to purchase inventory sell it on account and then collect cash from customers.

The use of reversing entries

Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account.

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 Equipment 210,000 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 What is the book value of the equipment at December 31 2016?

An error has occurred in the closing entry process if

The income statement and balance sheet columns of Beer and Nuts Company's worksheet reflect the following totals: The net income (or loss) for the period is

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 revenue account includes a

Under IFRS

Which one of the following is an optional step in the accounting cycle of a business enterprise?

Balance sheet accounts are considered to be

At the end of an accounting period all revenue and expense accounts are closed to a temporary account called ______________.