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Exam 4: Completing the Accounting Cycle

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Question 41

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The following accounts were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet for April 30, for Finnegan Co.: $\begin{array} { l l } \text { Accumulated Depreciation } & \$ 32,000 \\\text { Fees Earned } & 78,000 \\\text { Depreciation Expense } & 7,250 \\\text { Rent Expense } & 34,000 \\\text { Prepaid Insurance } & 6,000 \\\text { Supplies } & 400 \\\text { Supplies Expense } & 1,800\end{array}$ Prepare an income statement.

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Question 42

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The ending balance in retained earnings is

A) $53,000
B) $47,000
C) $3,000
D) $50,000

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

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Question 43

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The natural business year is a

The following accounts appear in an adjusted trial balance of Blaine Auto Service Company. Indicate whether each account would be reported in the a) current assets, b) property, plant, and equipment, c) current liabilities, d) long-term liabilities, or e) stockholders' equity section of the December 31 balance sheet of Blaine Auto Service Company. 1. Retained Earnings 2. Accumulated Depreciation 3. Unearned Revenues 4. Mortgage Payable 5. Equipment 6. Notes Payable due in two years) 7. Cash 8. Accounts Receivable

Prepare closing entries from the following end-of-period spreadsheet.

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

The most important output of the accounting cycle is the financial statements.

Use the adjusted trial balance for Stockton Company below to answer the questions that follow. -Determine the total liabilities for the period.

Once an account has been closed for the period, inserting a line in the balance columns zeros out the account, making it ready for the following period.

The following accounts were taken from the Adjusted Trial Balance columns of the work sheet: $\begin{array}{ll}\text { Accumulated Depreciation } & \$ 3,200 \\\text { Fees Earned } & 17,400 \\\text { Depreciation Expense } & 1,300 \\\text { Insurance Expense } & 400 \\\text { Frepaid Insurance } & 4,800 \\\text { Supplies } & 900 \\\text { Supplies Expense } & 3,800\end{array}$ Net income for the period is

Notes receivable due in 390 days appear on the

On March 1, a company collects revenue in advance for the next twelve months and credits a liability account. The adjusting entry at year end on the work sheet would

Accrued expenses are ordinarily listed on the balance sheet as current assets.

The following are all the steps in the accounting cycle. List them in the order in which they should be done. - Closing entries are journalized and posted to the ledger. - An unadjusted trial balance is prepared. - An optional end-of-period spreadsheet work sheet) is prepared. - A post-closing trial balance is prepared. - Adjusting entries are journalized and posted to the ledger. - Transactions are analyzed and recorded in the journal. - Adjustment data are assembled and analyzed. - Financial statements are prepared. - An adjusted trial balance is prepared. - Transactions are posted to the ledger.

During the closing process, some balance sheet accounts are closed and end the period with a zero balance.

The majority of businesses end their fiscal year on December 31.

Once the adjusting entries are posted, the adjusted trial balance is prepared to

On September 1, the company pays rent for twelve months in advance and debits an asset account. At year end, the adjusting entry on the work sheet would

A post-closing trial balance contains only asset and liability accounts.

Accrued taxes payable are generally reported on the balance sheet as a current liability.