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Exam 4: Completing the Accounting Cycle

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Question 31

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The Statement of Owner's Equity begins with the beginning balance followed by

A) plus Net Income (loss) less withdrawals
B) plus Net Income (loss) plus investments
C) plus investments less withdrawals
D) plus investments plus Net Income (loss) less withdrawals

E) A) and D)
F) None of the above

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Question 32

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A fiscal year

A) ordinarily begins on the first day of a month and ends on the last day of the following twelfth month
B) for a business is determined by the federal government
C) always begins on January 1 and ends on December 31 of the same year
D) should end at the height of the business's annual operating cycle

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

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Question 33

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A summary of selected ledger accounts appear below for Alberto's Plumbing Services for the current calendar year end. Net income for the period is

Amir Designs purchased a one-year liability insurance policy on March 1st of this year for $7,200 and recorded it as a prepaid expense. Which of the following amounts would be recorded for insurance expense during the adjusting process at the end of Amir's first month of operations on March 31st?

Net income appears on the work sheet in the

Capital and Drawing are reported in the owner's equity section of the balance sheet.

Unearned Fees appear on the

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

Identify which of the following accounts should be closed with a debit or a credit to Income Summary at the end of the fiscal year. If it is not closed to Income Summary, mark as n/a.

Journalizing and posting the adjustments and closing entries updates the ledger for the new accounting period.

The accumulated depreciation account is closed to the income summary account.

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, (5) Ending capital.

Accumulated Depreciation is a permanent account.

Assets, liabilities, and owner's capital are real accounts and do get closed at the end of the period.

The following accounts were taken from the Adjusted Trial Balance columns of the work sheet for April 30, 2010 for Finnegan Co.: Accumulated Depreciation $\qquad$$\qquad~$ $32,000 Fees Earned $\qquad$$\qquad$$\qquad$$\qquad~~~~$ 78,000 Depreciation Expense $\qquad$$\qquad$$\qquad$ 7,250 Rent Expense $\qquad$$\qquad$$\qquad$$\qquad~~~$ 34,000 Prepaid Inswance $\qquad$$\qquad$$\qquad~~~~~~$ 6,000 Supplies $\qquad$$\qquad$$\qquad$$\qquad~~~~~~~~~~$ 400 Supplies Expense $\qquad$$\qquad$$\qquad$$\quad~~$ 1,800 Prepare an income statement.

Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2010. Prepare the entry required to close the Drawing account at the end of the period.

Which of the following accounts should be closed to Income Summary at the end of the fiscal year?

Unearned revenues that will be earned in a relatively short period of time are listed on the balance sheet as current assets.

The income summary account is also called

Closing entries are dated in the journal as of