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The Unadjusted Trial Balance columns of a company's work sheet shows a balance in the Office

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1. The Unadjusted Trial Balance columns of a company's work sheet shows a balance in the Office Supplies account as $860. The Adjustments columns show that $480 of these supplies were used during the period. The amount shown as Office Supplies in the Balance Sheet columns of the work sheet is:

$380 debit.

$380 credit.

$480 debit.

$860 debit.

$860 credit.

2. The following information is available for the Travis Travel Agency. After closing entries are posted, what will be the balance in the Jay Travis, Capital account?

Total revenues
$129,000
Total expenses
62,000
Jay Travis, Capital
70,000
Jay Travis, Withdrawals
17,000

$67,000.

$70,000.

$120,000. (

$137,000.

$278,000.

3. A company's ledger accounts and their end-of-period balances before closing entries are posted are shown below. What amount will be posted to Tricia DeBarre, Capital in the process of closing the Income Summary account? (Assume all accounts have normal balances.)

Tricia De Barre, Capital
$ 7,300
Tricia De Barre, Withdrawals
9,900
Revenue
30,500
Rent expense
3,900
Salaries expense
7,500
Insurance expense
950
Depr. Expense-equipment
530
Accum depr.-equipment
1,590

$17,620 debit.

$7,720 credit.

$17,620 credit.

$19,210 credit.

$24,920 credit.
30500-3900-7500-950-530

4. Revenue accounts should begin each accounting period with zero balances.
True
False

5. A company has revenues of $196,000 and expenses of $117,100 for the accounting period. The owner withdrew $41,500 during the year. Which of the following entries is not a closing entry?

Debit Income Summary $78,900; credit Owner's Capital $78,900.

Debit Owner's Capital $41,500; credit Owner's Withdrawals $41,500.

Debit Revenues $196,000; credit Income Summary $196,000.

Debit Income Summary $117,100, credit Expenses $117,100.

Debit Income Summary $196,000; credit Revenues $196,000.


6. Accounts that appear in the balance sheet are often called temporary (nominal) accounts.
True
False

7. The closing process takes place after financial statements have been prepared
TRUE
False

8. The Income Summary account is a permanent account that will be carried forward period after period.
True
False

9. The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements and recording closing and adjusting entries
True
False

10. Intangible assets are long-term resources that benefit business operations that usually lack physical form and have uncertain benefits
True
False

11. Harry's Bikes' current assets are $400 million and its current liabilities are $250 million. Its current ratio is 0.63 (rounded to 2 decimal places).
True
False

12. A work sheet is a tool to help organize information needed in adjusting the accounts and preparing the financial statements
True
False

13. A worksheet can be helpful in showing the effects of proposed or "what if" transactions, as well as being useful in helping to prepare end-of-period financial statements.
True
False

14. The withdrawals account is normally closed by debiting Withdrawals account and crediting Capital account.
True
False

15. The Income Summary account is used to close the permanent accounts at the end of an accounting period
True
False

16. Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming period and to update the owner's capital account for the events of the period just finished are referred to as:

Adjusting entries.

Closing entries.

Final entries.

Work sheet entries.

Updating entries.

17. The closing process is necessary in order to:

calculate net income or net loss for an accounting period.

ensure that all permanent accounts are closed to zero at the end of each accounting period.

ensure that the company complies with state laws.

ensure that net income or net loss and owner withdrawals for the period are closed into the owner's capital account.

ensure that management is aware of how well the company is operating.

18. Two common subgroups for liabilities on a classified balance sheet are:

current liabilities and intangible liabilities.

present liabilities and operating liabilities.

general liabilities and specific liabilities.

intangible liabilities and long-term liabilities.

current liabilities and long-term liabilities.

19. Accumulated Depreciation, Accounts Receivable, and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

Balance Sheet and Statement of Owner's Equity-Credit; Balance Sheet and Statement of Owner's Equity-Debit; and Income Statement-Credit.

Balance Sheet and Statement of Owner's Equity-Debit; Balance Sheet and Statement of Owner's Equity-Credit; and Income Statement-Credit.

Income Statement-Debit; Balance Sheet and Statement of Owner's Equity-Debit; and Income Statement-Credit.

Income Statement-Debit; Income Statement-Debit; and Balance Sheet and Statement of Owner's Equity-Credit.

Balance Sheet and Statement of Owner's Equity-Credit; Income Statement-Debit; and Income Statement-Credit.

20. The balances in the unadjusted columns of a work sheet will agree with:

the balances reflected in the company's financial statements.

the balances reflected in the company's unadjusted trial balance.

whatever balances management has decided to report.

the balances in the company's post-closing trial balance.

the balances management budgeted for the accounting period.

21. In the process of completing a work sheet, you determine that the Income Statement debit column totals $83,000, while the Income Statement credit column totals $65,000. To enter net income (or net loss) for the period into the work sheet would require an entry to

the Adjustments debit column and the Adjustments credit column.

the Unadjusted Trial Balance debit column and the Adjustments credit column.

it is not practical to enter Net Income (or Net Loss) on the work sheet.

the Balance Sheet & Statement of Owner's Equity debit column and the Income Statement credit column.

the Income Statement debit column and the Balance Sheet & Statement of Owner's Equity credit column.

22. The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account is the:

Income Summary account.

Closing account.

Balance column account.

Contra account.

Nominal account.

23. A company had revenues of $75,000 and expenses of $62,000 for the accounting period. The owner withdrew $8,000 in cash during the same period. Which of the following entries could not be a closing entry?

Debit Income Summary $13,000; credit Owner's, Capital $13,000.

Debit Income Summary $75,000; credit Revenues $75,000.

Debit Revenues $75,000; credit Income Summary $75,000.

Debit Income Summary $62,000, credit Expenses $62,000.

Debit Owner's, Capital $8,000, credit Owner's, Withdrawals $8,000.

24. The J. Godfrey, Capital account has a credit balance of $17,000 before closing entries are made. If total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000, what is the ending balance in the J. Godfrey, Capital account after all closing entries are made?

$8,000.

$15,400.

$23,400.

$17,000.

$32,400

25. The Income Summary account is used:

To adjust and update asset and liability accounts.

To close the revenue and expense accounts.

To determine the appropriate withdrawal amount.

To replace the income statement under certain circumstances.

To replace the capital account in some businesses.

26. At the beginning of the year, a company's balance sheet reported the following balances: Total Assets = $125,000; Total Liabilities = $75,000; and Owner's Capital = $50,000. During the year, the company reported revenues of $46,000 and expenses of $30,000. In addition, owner's withdrawals for the year totaled $20,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of the year would be:

$66,000.

$86,000.

$(4,000).

$46,000.

$54,000.

27. A post-closing trial balance reports:
A. All ledger accounts with balances, none of which can be temporary accounts.
B. All ledger accounts with balances, none of which can be permanent accounts.
C. All ledger accounts with balances, which include some temporary and some permanent accounts.
D. Only revenue and expense accounts.
E. Only asset accounts.

28. The following information is available for Crandall Company before closing the accounts. What will be the amount in the Income Summary account that should be closed to Crandall, Capital?


$80,000.

$64,400.

$43,000.

$32,400.

$42,400.

29. Bentley records adjusting entries on December 31 year end. At December 31, employees had earned $12,000 of unpaid and unrecorded salaries. The next payday is January 3, during which $30,000 will be paid. Prepare the January 1 journal entry to reverse the effect of the December 31 salary expense accrual.

Debit Salaries expense $12,000; credit Salaries payable $12,000.

Debit Salaries expense $18,000; debit Salaries payable $12,000; credit Cash $30,000.

Debit Salaries payable $18,000; credit Cash $18,000.

Debit Salaries payable $12,000, credit Salaries expense $12,000.

Debit Salaries expense $18,000; credit Salaries payable $18,000.

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