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Exam 4: The Accounting Cycle

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Question 21

True/False

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Liabilities that will be due within one year or less and that are to be paid out of current assets are called current liabilities.

A) True
B) False

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Question 22

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What is the first account that should be listed in the post-closing trial balance?

A) Income Summary
B) Common Stock
C) Cash
D) Fees Earned

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

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Question 23

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Prepaid insurance is reported on the balance sheet as a

The unadjusted, adjusted, and final trial balances are prepared during the accounting cycle of a period.

A net loss is shown on the end-of-period spreadsheet in the credit columns of both the Income Statement columns and the Balance Sheet columns.

Moringa Products Corporation had common stock of $820,000 and retained earnings of $1,250,000 on January 1. During the year $75,000 of common stock was issued. Dividends of $48,000 were paid. For the year ended December 31, Moringa reported a net income of $287,500. What is the retained earnings balance on December 31?

There are four closing entries. The first one is to close revenues, the second one is to close expenses, the third one is to close ____, and the last one is to close the ____.

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

The retained earnings statement should be prepared

If end-of-period spreadsheets are not considered part of the formal accounting records, then why are they used?

The dividends account is closed to the income summary account.

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

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 end-of-period spreadsheet would

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

Balance sheet accounts are not considered real accounts.

The balances for the accounts listed below appeared in the Adjusted Trial Balance columns of the end-of-period spreadsheet. Indicate whether each balance should be extended to (a) the Income Statement columns or (b) the Balance Sheet columns.

Daniel Corporation's end-of-period spreadsheet at the end of July has $4,950 in the Balance Sheet Credit column for Accumulated Depreciation. The end-of-period spreadsheet at the end of August has $7,600 in the Balance Sheet Credit column for Accumulated Depreciation. What is the amount of the depreciation expense adjustment for the month of August?

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

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

The following is the adjusted trial balance for Miller Company. Prepare closing entries and the post-closing trial balance.