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Exam 4: The Accounting Cycle

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Question 71

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There is really no benefit in preparing financial statements in any particular order.

A) True
B) False

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Question 72

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Use this end-of-period spreadsheet to answer the questions that follow.​ -The entry to close Dividends would be

A) debit Common Stock, $3,000; credit Retained Earnings, $3,000
B) debit Retained Earnings, $3,000; credit Common Stock, $3,000
C) debit Retained Earnings, $3,000; credit Dividends, $3,000
D) debit Dividends, $3,000; credit Retained Earnings, $3,000

E) A) and B)
F) A) and D)

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Question 73

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Based on the following end-of-year spreadsheet, prepare an income statement for Austin Enterprises for the year ended December 31.

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

An indication that the end-of-period spreadsheet columns are in balance and the spreadsheet is complete is

Once the adjusted trial balance is in balance, the flow of accounts will now go into the financial statements.

Use the adjusted trial balance for Stockton Company below to answer the questions that follow. ​ -Determine the retained earnings ending balance.

Journalizing and posting closing entries must be completed before financial statements can be prepared.

Closing entries are dated in the journal as of

Kirk Enterprises offers rug cleaning services to business clients. Below is the adjustments data for the year ended July 31. Using this information along with the spreadsheet below, record the adjusting entries in proper general journal form.Adjustments: (a) Depreciation expense, $1,000.(b) Wages accrued, but not paid, $2,000.(c) Supplies on hand, $8,000.(d) Of the unearned revenue, 75% has been earned.(e) Unexpired insurance at July 31, $9,000.​

Entries required to close the balances of the temporary accounts at the end of the period are called final entries.

The trial balance may be listed on the end-of-period spreadsheet instead of being prepared separately.

On the income statement, miscellaneous expenses are usually presented as the last item without regard to the dollar amount.

After analyzing transactions, the next step would be to post the transactions in the ledger.

Since the adjustments are entered on the end-of-period spreadsheet, it is not necessary to record them in the journal or post them to the ledger.

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

Which of the following is not an essential part of the accounting records?

Land is an example of a plant asset.

Real accounts are not permanent accounts.

Prior to adjustment on 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)The effect of closing of Salary Expense as of August 31.​