Accounting
trial balance
list of accounts and their balances at a point in time
Select the statement below that describes a post-closing trial balance.
listing of all permanent accounts and their balances after closing.
Kara Eastmond, the owner of Tiptop Cleaning Service, had annual revenues of $188,000, expenses of $104,600 and withdrew $27,300 from the business during the current year. The owner's capital account before closing had a balance of $155,000. The net income reported on the Income Statement for Tiptop Cleaning Service is:
$83,400 Net Income
The unadjusted Trial Balance of a company's work sheet shows the Store Supplies account with a $610 balance. The adjustments columns show a credit of $340 for supplies used during the period. The amount shown as Store Supplies in the Balance Sheet columns of the work sheet is
270 debit
Prepaid Insurance has a $1,670 balance on the Unadjusted Trial Balance section of the worksheet. The Adjustments Column show that $720 of insurance has been used during the period. The amount of Prepaid Insurance reflected in the Balance Sheet would b
950 debit
A company has $438,000 in service revenue at year end. The closing entry would include
A debit to Service Revenue of $438,000
The trial balance created after all adjustments are made, but before the closing process is complete is called the
ADJUSTED TRAIL BALANCE
Which of the following is classified as a current asset
Accounts receivable
Identify which of the following steps in the accounting cycle is optional Reversing journal entries
An unclassified balance sheet is one whose items are broadly grouped into assets, liabilities, and equity.
When does the closing process take place?
At the end of an accounting period
Summarize the steps in the closing process by selecting the correct choice below.
Close income statement credit balance accounts; close income statement debit balance accounts; close income summary; close withdrawals.
Closing the temporary accounts at the end of each accounting period does NOT do which of the following?
Brings the asset and liability accounts to zero balances.
Which of the following accounts would be sorted from the Adjusted Trial Balance of a work sheet to the Balance Sheet & Statement of Owner's Equity columns on a work sheet?
Cash; Accounts payable; Owner, Withdrawals
After an adjusted trial balance is prepared, what is the next step in completing the work sheet used in preparing financial statements
Sort adjusted trial balance amounts to the financial statement columns.
Describe your understanding of the closing process by identifying the correct steps below
Close the Income Summary account. · Close the Withdrawals account. · Close all revenue accounts. · Close all expense accounts
Assets that are cash and other resources that are expected to be sold, collected, or used with one year are classified as
Current Assets
Liabilities due to be paid or settled within one year are called
Current Liabilities
A classified balance sheet has several categories for assets and liabilities including
Current assets. · Noncurrent (long-term) liabilities. · Plant assets. · Long-term investments.
A company has Consulting Revenue of $250,000 and Rent Revenue of $24,000. The closing entry for this business would be
Debit Consulting Revenue, $250,000, Debit Rent Revenue $24,000 and Credit Income Summary $274,000.
Tara Westmont, the owner of Tiptoe Shoes, had annual revenues of $193,000, expenses of $107,700 and withdrew $21,200 from the business during the current year. The owner's capital account before closing had a balance of $305,000. the entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is
Debit Income Summary $85,300, credit T. Westmont, Capital $85,300
Michele Sosnow, the proprietor of Ski Services, withdrew $13,180 from the business during the current year. The entry to close the withdrawals account at the end of the year is
Debit M. Sosnow, Capital $13,180; credit M. Sosnow, Withdrawals $13,180.
Which of the following is correct regarding a work sheet?
Each set of column totals must balance on the Trial Balance columns, Adjustments columns and the Adjusted Trial Balance columns.
Closing entries are necessary at the end of each period to
Ensure that temporary accounts begin each period with zero balances
Select the statements below which correctly describe how to use the work sheet in the adjustment process
Information from the Adjustments columns are used for the adjusting journal entries. Journalizing and posting adjusting entries is required after adjustments are entered in a work sheet.
Which of the following accounts would be closed at the end of the accounting period?
Insurance expense
What is a work sheet
It can help with adjusting and closing accounts and with preparing financial statements.
Review the following statements and select the ones that are correct regarding sorting accounts from the Adjusted Trial Balance columns of a work sheet to the Income Statement and Balance Sheet columns in order to prepare for our last step of completing the worksheet. (Check all that apply.)
Liabilities go to the Balance Sheet & Statement of Owner's Equity Credit column. Owner, Withdrawals go to the Balance Sheet & Statement of Owner's Equity Debit column. Expense accounts go to the Income Statement Debit column.
Which one of the following is NOT a current liability
Long-term Notes Payable
A classified balance sheet has several categories for assets and liabilities including: (Check all that apply.)
Plant assets. · Long-term investments. · Current assets. · Noncurrent (long-term) liabilities
A list of permanent accounts and their balances after all closing entries are recorded is called
Post Closing Trial Balance
Which one of the following accounts would be closed at the end of the period
Rent Expense
Which of the following accounts is likely to appear on a closing journal entry
Rent Revenue
The Credit column of the Income Statement columns represent
Revenue reported on the Income Statement
Western Airlines provided flights this moth for customers who paid cash last month for a ticket. Which of the following best describes the accounting for this situation from Western's perspective in the current period
Revenue was earned and a liability was reduced
Which of the following accounts would be included in one of the closing journal entries for a business
Salary Expense
When a concert promotion company collects cash for ticket sales three months in advance of a band's tour date, which of the following accounts is affected
Unearned Concert Revenue
Identify the accounts below that would be classified as current liabilities on a classified balance sheet
Unearned rent · Taxes payable · Accounts payable
Identify the accounts below that would be classified as current liabilities on a classified balance sheet.
Unearned rent, Taxes payable, Accounts payable
A temporary account will not
appear on a post-closing trial balance.
Which of the following is a real or permanent account that is NEVER closed during the closing process.
cash
Current assets are
cash and other resources that are expected to be sold, collected or used within one year
An Adjusted Trial Balance: Shows the
ending balances in a "debit" and "credit" format after adjusting journal entries are posted
Explain the required steps to complete a work sheet by placing the following steps in the correct order.
enter unadjusted trail balance, enter adjustments, prepare adjusted trial balance, sort adjusted trial balance amounts to financial statements, total financial statement columns, compute income or loss and balance columns
The Debit column of the Income Statement columns represent
expenses reported on the Income Statement.
Which of the following is TRUE about a worksheet.
helps prepare financial statements, reduce risk of errors when working with many accounts and adjustments, Links accounts and adjustments to financial statement
work sheet
internal accounting aid which helps in preparing financial statements
Depreciation Expense Is an expense that
is closed into the Income Summary Account at the end of the accounting period.
An unclassified balance sheet is one whose
items are broadly grouped into assets, liabilities, and equity.
Current items are those expected to come due within
n one year or the company's operating cycle, whichever is longer
The Withdrawals account balance will be used in
preparing the statement of owner's equity.
income statement
reports a business's revenues and expenses for period of time
balance sheet
reports business assets, liabilities, equity on specific date
statement of cash flows
reports inflows/outflows of cash during period of time
Closing means to
reset an account balance to zero.
net income equals
revenues minus expenses
Long-term liabilities are debts of a business that
that are not due to be settled within one year.
The Income Summary account is used during the closing process to facilitate
the closing of revenue and expense accounts
What are current liabilities?
usually settled by paying out current assets such as cash, e liabilities due to be paid within one year.
Select the statements below that describe the purpose of a post-closing trial balance.
verify that all temporary accounts have zero balances, verify that total debits equal total credit for permanent accounts