Exam 4: Completing the Accounting Cycle

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 all closing entries have been posted the Income Summary account will have a balance of

Which of the following liabilities are not related to the operating cycle?

Indio Company prepared the following adjusting entries at year end on December 31 2016: (a) Interest Expense 280 Interest Payable 280 (b) Interest Receivable 540 Interest Revenue 540 (c) Salaries and Wages Expense 5,300 Salaries and Wages Payable 5,300 In an effort to minimize errors in recording transactions Indio Company utilizes reversing entries. Prepare reversing entries on January 1 2017.

Which of the following depicts the proper sequence of steps in the accounting cycle?

Assets that do not have a physical substance yet often are very valuable are called ______________ assets.

Identify which of the following accounts would have balances on a post-closing trial balance. (1) Service Revenue (2) Income Summary (3) Notes Payable (4) Interest Expense (5) Cash

The four major classifications of assets in a classified balance sheet are: ________________ ________________ ________________ and ________________.

IFRS requires the use of

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 long-term liabilities at December 31 2016?

Closing entries are unnecessary if the business plans to continue operating in the future and issue financial statements each year.

Most companies that follow IFRS present balance sheet (statement of financial position) information in this order:

The financial statement columns of the worksheet for Maximum Effort at December 31 2016 are as follows: Instructions (a) Calculate the balance of Owner's Capital that would appear on a balance sheet at December 31 2016. (b) Prepare a classified balance sheet for Maximum Effort at December 31 2016 assuming the note payable is a long-term liability.

Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process?

A correcting entry

The information for preparing a trial balance on a worksheet is obtained from

The heading for a post-closing trial balance has a date line that is similar to the one found on

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 liabilities to be classified as current liabilities is

The first required step in the accounting cycle is

Which statement about long-term investments is not true?

In order to close the owner's drawings account the