Accounting Chapter 4

Supplies had a beginning balance of $4,000. A physical count at the end of the accounting period revealed $2,500 supplies on hand. What adjustment amount will appear for Supplies in the Adjustments section of the end-of-period spreadsheet? $1,500 credit $6,500 credit $2,500 debit $1,500 debit

$1,500 credit

During the accounting period, Cash was debited for $4,000, $3,000, and $1,000. Cash was also credited for $3,000, $500, and $100. The beginning balance of Cash was a $10,000 debit. What is the ending balance of Cash on the post-closing trial balance? $21,600 debit $14,400 debit $21,600 credit $14,400 credit

$14,400 debit

The following amounts were taken from a company's balance sheet: Total assets $100,000 Total liabilities 20,000 Total stockholders' equity 80,000 Current assets 10,000 Current liabilities 5,000 The company's working capital is $5,000. $10,000. $20,000. $80,000.

$5,000 (Current Assets - Current Liabilities)

The following accounts appear in an adjusted trial balance of Bridgewater Consulting. Indicate whether each account would be reported in the Current asset; property, plant, and equipment; Current liabilities; long-term liability; or stockholders' equity section of the December 31, 20Y0, balance sheet of Bridgewater Consulting. 1. Accounts Payable 2. Accounts Receivable 3. Accumulated Depreciation—Building 4. Cash 5. Common Stock 6. Note Payable (due in ten years) 7. Supplies 8. Wages Payable

1. Current liabilities 2. Current asset 3. property, plant, and equipment, 4. current asset 5. stockholders' equity 6. long-term liability 7. current asset 8. current liabilities

Balances for each of the following accounts appear in an adjusted trial balance. Identify each as an asset, liability, revenue, or expense. 1. Accounts Receivable 2. Equipment 3. Fees Earned 4. Insurance Expense 5. Prepaid Advertising 6. Prepaid Rent 7. Rent Revenue 8. Salary Expense 9. Salary Payable 10. Supplies 11. Supplies Expense 12. Unearned Rent

1. asset 2. asset 3. revenue 4. expense 5. asset 6. asset 7. revenue 8. expense 9. liability 10. asset 11. expense 12. liability

The balances for the accounts that follow appear in the Adjusted Trial Balance columns of the end-of-period spreadsheet. Indicate whether each account would flow into the income statement, statement of stockholders' equity, or balance sheet. 1. Accounts Payable 2. Accounts Receivable 3. Cash 4. Dividends 5. Fees Earned 6. Supplies 7. Unearned Rent 8. Utilities Expense 9. Wages Expense 10. Wages Payable

1. balance sheet 2. balance sheet 3. balance sheet 4. statement of stockholders' equity 5. income statemtent 6. balance sheet 7. balance sheet 8. income statement 9. income statement 10. balance sheet

The following amounts were taken from a company's balance sheet: Total assets $100,000 Total liabilities 20,000 Total stockholders' equity 80,000 Current assets 10,000 Current liabilities 5,000 The company's current ratio is 5.0. 2.0. 0.5. 20.

2.0. (Current assets / Current Liabilities)

On the end-of-period spreadsheet, which of the following accounts would not be extended to the Balance Sheet columns? Accounts Receivable Common Stock Accumulated Depreciation Fees Earned

Fees Earned

Which of the following accounts will NOT appear on the post-closing trial balance? Fees Earned Cash Accounts Receivable Accounts Payable

Fees Earned

Why do companies base their fiscal year on a natural business cycle? It provides greater tax advantages. It's the time of highest sales volume, and thus provides greater advantage to investors. Accountants want to close their books at the end of the year. It's at the low point in the operating cycle and provides time to analyze operations and prepare financial statements.

It's at the low point in the operating cycle and provides time to analyze operations and prepare financial statements.

Which of the following is an example of a fixed asset? Supplies Accounts receivable Land Unearned fees

Land

All of the following accounts/account types are closed at the end of the accounting period EXCEPT Revenues. Expenses. Dividends. Retained Earnings.

Retained Earnings.

Which of the following statements about reversing entries is not true? A reversing entry is the exact opposite of the adjusting entry to which it relates. Reversing entries are recorded prior to the closing entries for the period. Reversing entries are recorded on the first day of a subsequent accounting period. The use of reversing entries is optional.

Reversing entries are recorded prior to the closing entries for the period.

Which of the following financial statements is not normally prepared directly from the end-of-period spreadsheet? Income statement Balance sheet Retained earnings statement Statement of Cash Flows

Statement of Cash Flows

Why should investors and others be careful in interpreting partial-year reports for companies that use the natural business year for their fiscal year? The operations of the companies vary significantly throughout the fiscal year. Partial-year reports show only the highest points of a business. Partial-year reports show only the lowest points of a business. These reports are not used for the fiscal year reports.

The operations of the companies vary significantly throughout the fiscal year.

A company has accrued wages for December 28-31 of $500. On December 31, the company records an adjusting entry that debits Wages Expense for $500 and credits Wages Payable for $500. Which of the following would be the correct reversing entry that would be entered on January 1? Wages Payable, $500 debit; Wages Expense, $500 credit Wages Expense, $500 debit; Wages Payable, $500 credit Cash, $500 debit; Wages Expense, $500 credit Wages Payable, $500 debit; Cash, $500 credit

Wages Payable, $500 debit; Wages Expense, $500 credit

The journal entry required to close the dividends account includes a debit to Common Stock and a credit to Dividends. a debit to Retained Earnings and a credit to Dividends. a debit to Retained Earnings and a credit to Cash. a credit to Common Stock and a debit to Retained Earnings.

a debit to Retained Earnings and a credit to Dividends

From the following list, identify the accounts that should be closed to Retained Earnings at the end of the fiscal year: a. Accounts Payable b. Accumulated Depreciation—Equipment c. Depreciation Expense—Equipment d. Equipment e. Common Stock f. Dividends g. Fees Earned h. Land i. Supplies j. Supplies Expense k. Wages Expense l. Wages Payable

a. no b. no c. yes d. no e. no f. yes g. yes h. no i. no j. yes k. yes l. no Temporary accounts, like expenses and revenues, as well as dividends transfer to RE

Which of the following accounts will usually appear in the post-closing trial balance? a. Accounts Payable b. Accumulated Depreciation c. Cash d. Common Stock e. Dividends f. Depreciation Expense g. Fees Earned h. Office Equipment i. Salaries Expense j. Salaries Payable k. Supplies

a. yes b. yes c. yes d. yes e. no f. no g. no h. yes i. no j. yes k. yes Only permanent accounts show on post-closing trial balance - no RE

The first step of the accounting cycle is to post transactions to the ledger. prepare an unadjusted trial balance. assemble and analyze adjustment data. analyze transactions and record them in the journal.

analyze transactions and record them in the journal.

When are the balances of temporary accounts set to zero? at the end of each week at the end of each pay period at the end of the year at the end of the employee's employment with the company

at the end of the year

On the work sheet, the cash balance in the Adjusted Trial Balance Debit column will flow into the balance sheet. statement of stockholders' equity. income statement. balance sheet and income statement.

balance sheet.

All of the following accounts will appear on the post-closing trial balance EXCEPT accounts payable. accounts receivable. depreciation expense. cash.

depreciation expense.

A business's yearly accounting period is called the financial year-end. accountant's annual budget. fiscal year. yearly balance sheet.

fiscal year.

Which of these does NOT represent a decrease in net cash received on an employee's paycheck? gross wages Medicare taxes social security taxes federal withholding taxes

gross wages

List (a) through (j) in the order they would be performed in preparing and completing an end-of-period spreadsheet. a. Add the Debit and Credit columns of the Unadjusted Trial Balance columns of the spreadsheet to verify that the totals are equal. b. Add the Debit and Credit columns of the Balance Sheet and Income Statement columns of the spreadsheet to verify that the totals are equal. c. Add or deduct adjusting entry data to trial balance amounts, and extend amounts to the Adjusted Trial Balance columns. d. Add the Debit and Credit columns of the Adjustments columns of the spreadsheet to verify that the totals are equal. e. Add the Debit and Credit columns of the Balance Sheet and Income Statement columns of the spreadsheet to determine the amount of net income or net loss for the period. f. Add the Debit and Credit columns of the Adjusted Trial Balance columns of the spreadsheet to verify that the totals are equal. g. Enter the adjusting entries into the spreadsheet, based on the adjustment data. h. Enter the amount of net income or net loss for the period in the proper Income Statement column and Balance Sheet column. i. Enter the unadjusted account balances from the general ledger into the Unadjusted Trial Balance columns of the spreadsheet. j. Extend the adjusted trial balance amounts to the Income Statement columns and the Balance Sheet columns.

i a g d c f j e h b

Year-to-date summaries on a paycheck stub are similar to the way expenses and revenues are transferred to an income summary. adjusting entries are recorded in the journal. income statement accounts accumulate revenues and expenses over a period. none of these.

income statement accounts accumulate revenues and expenses over a period.

The last step of the accounting cycle is to prepare a post-closing trial balance. prepare an adjusted trial balance. prepare financial statements. journalize the post-closing entries.

prepare a post-closing trial balance.

On the work sheet, the Dividends balance in the Adjusted Trial Balance Debit column will flow into the balance sheet. statement of stockholders' equity. income statement. balance sheet and statement of stockholders' equity.

statement of stockholders' equity.

Revenue accounts appear on the income statement. the balance sheet. the statement of stockholder's equity. the statement of cash flows.

the income statement.