Chapter 4 Test

The following accounts were taken from the Adjusted Trial Balance columns of the work sheet: Accumulated Depreciation $2,027 Fees Earned 17,246 Depreciation Expense 1,350 Insurance Expense 624 Prepaid Insurance 4,310 Supplies 1,574 Supplies Expense 3,972 Net income for the period is

11,300

Capital and drawing are reported in the Owner's Equity section of the balance sheet.

False

Cash and other assets that may reasonably be expected to be realized in cash, sold, or consumed through the normal operations of a business, usually longer than one year, are called current assets.

False

Entries required to close the balances of the temporary accounts at the end of the period are called final entries.

False

The accumulated depreciation account is closed to the drawing account.

False

The usual presentation of the statement of owner's equity is (1) Beginning capital, (2) Net income or loss, (3) Drawing, (4) Owner's contributions, and (5) Ending capital.

False

Which of the following accounts will be debited in the closing entry at the end of the year?

Fees Earned

The income statement will present

Revenues less Expenses (ordered largest to smallest amount) with Miscellaneous Expense listed last

Which of the following accounts ordinarily appears in the post-closing trial balance?

Unearned Rent

The difference between a classified balance sheet and one that is notclassified is that the classified one has subheadings.

True

What is the major difference between the unadjusted trial balance and the adjusted trial balance?

the adjusted trial balance reflects the updated balances in the accounts after the adjusting entries.

The balance sheet accounts are referred to as real or permanent accounts.

True

The following accounts were taken from the Adjusted Trial Balance columns of the work sheet: Accumulated Depreciation $3,200 Fees Earned 17,400 Depreciation Expense 1,300 Insurance Expense 400 Prepaid Insurance 4,800 Supplies 900 Supplies Expense 3,800 Net income for the period is

$11,900

Accounts reported on the balance sheet that are carried forward from year to year are known as permanent accounts.

True

Accumulated Depreciation is a permanent account.

True

Assets, liabilities, and owner's capital are real accounts and do not get closed at the end of the period.

True

On the balance sheet, owner's equity is

added to liabilities and the two are equal to assets

Unearned fees appear on the

balance sheet as a current liability

Prepaid insurance is reported on the balance sheet as a

current asset