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Exam 4: Completing the Accounting Cycle

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Question 31

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A fiscal year that ends when business activities have reached their lowest point is called the natural business year.

A) True
B) False

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Question 32

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The statement of owner's equity begins with the beginning balance followed by

A) adding net income less withdrawals
B) adding net income plus investments
C) adding investments less withdrawals
D) adding investments plus net income less withdrawals

E) A) and B)
F) A) and C)

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Question 33

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Indicate whether each of the following would be reported in the section of financial statements identified as (a) current asset, (b) property, plant, and equipment, (c) current liability, (d) revenue, or (e) expense:

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

Accrued revenues are ordinarily listed on the balance sheet as current liabilities.

Prior to adjustment at August 31, Salary Expense has a debit balance of $298,500. Salaries owed but not paid as of the same date total $4,200.Present the entries to record the following: (1)Accrued salaries as of August 31. (2)Closing of Salary Expense as of August 31.

On the basis of the following data taken from the Adjusted Trial Balance columns of the work sheet for the year ended March 31 for Banes Domino's Company, journalize the closing entries.

The ability of a business to pay its debts is called solvency.

The following data were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet for April 30, for Abigail Company:​ Prepare a classified balance sheet.

Any 12-month accounting period adopted by a company is known as its fiscal year.

An end-of-period spreadsheet includes columns for

Use the adjusted trial balance for Stockton Company to answer the questions that follow. ? $\begin{array}{c}\hline &&&&&&&&&&&\textbf { Stockton Company }&&&&&&&&&& \\\hline &&&&&&&&&&&\textbf { Adjusted Trial Balance }&&&& \\\hline &&&&&&&&&&&\textbf { December 31} &&&&\end{array}$ $\begin{array}{|l|c|c|c|}\hline & \begin{array}{c}\textbf { Account } \\\textbf { No. }\end{array} & \begin{array}{c}\textbf { Debit } \\\textbf { Balances }\end{array} & \begin{array}{c}\textbf { Credit } \\\textbf { Balances }\end{array} \\\hline \text { Cash } & 11 & 6,530 & \\\hline \text { Accounts Receivable } & 12 & 2,100 & \\\hline \text { Prepaid Expenses } & 13 & 700 & \\\hline \text { Equipment } & 18 & 13,700 & \\\hline \text { Accumulated Depreciation } & 19 & & 1,100 \\\hline \text { Accounts Payable } & 21 & & 1,900 \\\hline \text { Notes Payable } & 22 & & 4,300 \\\hline \text { Bob Steely, Capital } & 31 & & 12,940 \\\hline \text { Bob Steely, Drawing } & 32 & 790 & \\\hline \text { Fees Earned } & 41 & & 9,250 \\\hline \text { Wages Expense } & 51 & 2,500 & \\\hline \text { Rent Expense } & 52 & 1,960 & \\\hline \text { Utilities Expense } & 53 & 775 & \\\hline \text { Depreciation Expense } & 54 & 250 & \\\hline \text { Miscellaneous Expense } & 59 & \underline{185} &\_\_\_\_\_ \\\hline \text { Totals } & & \underline{\textbf{29,490}} & \underline{\textbf{29,490}} \\\hline\end{array}$ -Use the adjusted trial balance for Stockton Company. Determine the total liabilities for the period.

The following is the adjusted trial balance for Nadia Company.​ Prepare an income statement, statement of owner's equity, and balance sheet. Assume that the capital account started with a beginning balance of $10,000 and that the owner made an additional investment of $3,000 during the period.

Which of the following has steps of the accounting cycle in proper sequence (some steps may be missing) ?

Which of the accounts below would be closed by posting a debit to the account?

Financial statements should be prepared before the closing entries are journalized and posted.

The balances for the accounts listed below appeared in the Adjusted Trial Balance columns of the work sheet. Indicate whether each balance should flow to (a) the income statement, (b) the statement of owner's equity, or (c) the balance sheet.

Complete the following end-of-period spreadsheet for Danilo Enterprises.

The following revenue and expense account balances were taken from the Income Statement columns of the work sheet for Fraser Services Co. for December 31:? Prepare an income statement.

Current assets and current liabilities for Brayden Company are as follows:?? $\begin{array} { | l | r | r | } \hline & { 20 \mathrm { Y } 9 } & { 20 \mathrm { Y } 8 } \\\hline \text { Current Assets } & \$ 498,600 & \$ 532,400 \\\hline \text { Current Liabilities } & 269,300 & 301,500 \\\hline\end{array}$ The change in the current ratio from 20Y8 to 20Y9 was favorable.