Exam 5: The Accounting Cycle: Reporting Financial Results

A current asset may be cash or must be capable of being converted into cash within a relatively short period of time, usually less than five years.

What is the balance in Retained Earnings after posting closing entries at December 31?

If sales are $270,000, expenses are $220,000 and dividends are $30,000, Income Summary:

Which of the following accounts would never appear in the after-closing trial balance? (More than one answer may be correct)

Real accounts can only be closed at the end of the year with a single compound entry.

Working capital equals current assets divided by current liabilities.

Refer to the information above. The entry to close Depreciation expense account will:

What is the total debits on the after-closing trial balance?

The purpose of the after-closing trial balance is to give assurance that the accounts are in balance and ready for the new accounting period.

The December 31, 2011 worksheet for Albertville Grill showed the following amounts related to the Depreciation Expense account: (a). In the Trial Balance debit column: $1,745 (b)) In the Adjustments debit column: $1,125 (c)) In the Adjusted Trial Balance debit column: $1,870 What is the proper balance in the Depreciation Expense account on January 1, 2012, after all closing entries for 2011 have been posted, but before any 2012 transactions are recorded?

Publicly owned companies are:

Retained Earnings at the end of a period:

Measures of profitability tell us how quickly current assets can be converted into profits.

Declaring a dividend will:

Only two adjustments appear in the adjustments column of a worksheet for Wycliff Publications: one to record $800 depreciation of office equipment and the other to record the use of $560 of office supplies. If the Trial Balance column totals are $15,380, what are the totals of the Adjusted Trial Balance columns?

Which accounts should not be closed?

Only two adjustments appear in the adjustments column of a worksheet for Winona Mfg: one to record $8,000 depreciation of factory equipment, and the other to record the use of $1,500 of prepaid insurance. If the Trial Balance column totals are $145,380, what are the totals of the Adjusted Trial Balance columns?

Indicate those items for which generally accepted accounting principles require disclosure in notes accompanying the financial statements. (More than one answer may be correct.)

Inserting missing data into a worksheet Certain data are given on the worksheet below, and certain missing data are indicated by the blank lines. Sufficient information is included to fill in the missing data. Each account has a debit or credit balance characteristically normal for that kind of account. Note that the dollar amounts have been reduced to figures of not more than three digits to simplify the arithmetic. Insert the figures necessary to complete the worksheet in the blanks indicated by an underline. The lines cover both debit and credit columns; be sure to insert the missing figures in the correct column of the blank line. If no figure should appear in a column within a line, indicate this by placing a "0" in one or more columns with a blank line (see sample box opposite Cash).

Return on equity is a commonly used measure of a company's solvency.