chapter 4

On December 31, before the closing entries, the following information is available for Jones Company: Service Revenue $10,000 Total Expenses 6,000 Jones, Withdrawals 1,000 Jones, Capital 12,000 The balance of Jones, Capital after all closing entries would be:

$15,000 12,000+10,000-6,000-1,000=

On December 31, before the closing entries, the following information is available for Jones Company: Service Revenue $12,000 Total Expenses 6,000 Jones, Withdrawals 2,000 Jones, Capital 15,000 The balance of Jones, Capital after all closing entries would be:

$19,000 The current owner's capital of $15,000 would be increased by Service Revenue of $12,000. It would then be decreased by total expenses of $6,000 and decreased by withdrawals of $2,000. So (15,000 + 12,000 - 6,000 - 2,000) = $19,000 as the owner's capital balance after closing entries.

The following is given for the totals of Jones Company: Total Current Assets $10,000 Total Assets 30,000 Total Current Liabilities 6,000 Total Liabilities 12,000 Total Equity 18,000 What is Jones Company's current ratio?

1.67 Total Current Assets $10,000 divided by total current liabilities 6,0000

After completing the closing entries for Revenues and Expenses, the Income Summary account has a credit balance of $1,500. The journal entry to close out the $1,500 credit balance of Income Summary would be:

Income Summary 1,500 D Smith, Capital 1,500 C

The journal entry to close out a debit balance in Rent Expense of $200 for the period would be:

Income Summary 200 D Rent Expense 200 c

Which of the following accounts would NOT appear on the post-closing trial balance?

Service Revenue

The journal entry to close out a credit balance in Service Revenues of $2,000 for the period would be:

Service Revenue 2,000 D Income Summary 2,000 C

The journal entry to close out a $200 debit balance in the Withdrawals account for the period would be:

Smith, Capital 200 D Smith, Withdrawals 200 C Withdrawals are a distribution of earnings to the owner and reduce the owner's capital on the statement of owner's equity. Since the Withdrawals account has a debit balance, you need to credit the owner's withdrawals and debit the owner's capital to close the account.

Which of the following accounts appears in one of the Balance Sheet columns of the worksheet?

accounts payable All accounts EXCEPT Revenues and Expenses appear on the Balance Sheet columns of the worksheet. Accounts Payable is a liability and appears with a normal balance on the credit side of the Balance Sheet columns of the worksheet.

Which of the following accounts would appear on the post-closing trial balance

accounts receivable

Which of the following accounts would be included in the Current Assets category of the classified Balance Sheet?

accounts receivable

which steps are completed only at the end of the period

adjusting the accounts, preparing the financial statements and closing the accounts

Which of the following is generally a FALSE statement for the current ratio analysis?

companies want the statement below 1

in the accounting cycle which steps are optional

completing the worksheet is optional

which steps are completed throughout the period

journalizing the transactions and posting to the accounts

what is the last step in the accounting cycle

prepare the post closing trial balance

Which of the following accounts appears in one of the Income Statement columns of the worksheet?

salaries expense

Jones Company has Cash of $600, Accounts Receivable of $500, Office Supplies of $100, and a Building with a cost of $50,000. Jones Company owes $300 on Accounts Payable and has Salaries Payable of $200. What is Jones Company's current ratio?

2.40

Which of the following accounts would be included in the Current Assets category of the classified Balance Sheet?

Accounts Receivable Accounts Receivable is an asset where the amount owed from customers is expected to be collected in less than one year, so it is classified as a Current Asset.

Which of the following steps of the accounting cycle is done continuously through the accounting cycle (NOT just done at the end of an accounting period)?

Analyze and journalize transaction as they occur. Analyze and journalize transaction as they occur is done continuously, not just at the end of the accounting period. The other items listed are only done at the end of each accounting period.

Which of the steps below comes first in the accounting cycle?

Analyze and journalize transactions Analyzing and journalizing transactions needs to take place before the other steps of the accounting cycle. previous

Which of the following accounts would be included in the Plant Asset category of the classified Balance Sheet?

building

Which of the following accounts is NOT closed at the end of the accounting period?

building Assets are not closed; they are permanent accounts. Building is an asset and is not closed at the end of an account period.

Which of the following accounts is considered a permanent account?

cash, although all accounts on the balance sheet are permanent accounts

After completing the closing entries for Revenues and Expenses, the Income Summary account has a credit balance of $2,000. The journal entry to close out the $2,000 credit balance of Income Summary would be:

income Summary 2,000 D Smith, Capital 2,000 C When Income Summary has a credit balance, this represents the amount of Net Income. To close out the credit balance in Income Summary, you have to debit Income Summary as the closing entry. The credit entry is to the owner's capital to increase the account by the amount of Net Income.

Smith Company recorded an adjustment for salaries on December 31 of $1,500. On January 1 of the following year, the company reverses this adjusting entry before payment. What is the journal entry made on January 1 to reverse the adjusting entry made on December 31 of the previous year?

salaries payable 1500 salaries expense 150

what is the first step in the accounting cycle?

start with the beginning account balance

On the worksheet, after totaling the debit and credit Balance Sheet columns, the difference is ________.

the amount of Net Income or Net Loss for the period