larson 14e v1 tb - amazon web services · revenue acc... tb 04-29 after posting the entries to...

539.

540.

TB 03-174 Prepare a balance sheet from the adjusted trial ba...Prepare a balance sheet from the adjusted trial balance above.

Short Answer TB 03-174 Prepare a balance sheet from theadjusted trial ba...

TB 04-01 A work sheet is a tool of the accountant for bring...A work sheet is a tool of the accountant for bringing together information needed in preparing the statements, adjusting the accounts, and preparingclosing entries.

True

→ False

True / False TB 04-01 A work sheet is a tool of theaccountant for bring...

Assignment Print View http://ezto.mhecloud.mcgraw-hill.com/hm.tpx

202 of 521 3/5/2014, 3:25 PM

541.

542.

543.

544.

TB 04-02 Financial statements prepared from a work sheet of...Financial statements prepared from a work sheet offer more information than if it is not used and statements are just prepared from an adjusted trialbalance.

True

→ False

True / False TB 04-02 Financial statements prepared froma work sheet of...

TB 04-03 A work sheet is prepared before entering the adjus...A work sheet is prepared before entering the adjustments in the accounts.

→ True

False

True / False TB 04-03 A work sheet is prepared beforeentering the adjus...

TB 04-04 The work sheet is used to record transactions as t...The work sheet is used to record transactions as they occur.

True

→ False

True / False TB 04-04 The work sheet is used to recordtransactions as t...

TB 04-05 A work sheet can be prepared manually or with a co...A work sheet can be prepared manually or with a computer spreadsheet program.

→ True

False

True / False TB 04-05 A work sheet can be preparedmanually or with a co...


203 of 521 3/5/2014, 3:25 PM

545.

546.

547.

548.

TB 04-06 A work sheet is a substitute for the financial sta...A work sheet is a substitute for the financial statements.

True

→ False

True / False TB 04-06 A work sheet is a substitute for thefinancial sta...

TB 04-07 To prepare the income statement all necessary numb...To prepare the income statement all necessary numbers can be found in the income statement columns of the work sheet, including the net income ornet loss.

→ True

False

True / False TB 04-07 To prepare the income statement allnecessary numb...

TB 04-08 On the work sheet, a loss is indicated if the tota...On the work sheet, a loss is indicated if the total of the Income Statement Debit column exceeds the total of the Income Statement Credit column.

→ True

False

True / False TB 04-08 On the work sheet, a loss isindicated if the tota...

TB 04-09 If all columns balance upon completion of a work s...If all columns balance upon completion of a work sheet, you can be sure that no errors were made in preparing the work sheet.

True

→ False

True / False TB 04-09 If all columns balance uponcompletion of a work s...


204 of 521 3/5/2014, 3:25 PM

549.

550.

551.

552.

TB 04-10 Closing entries are normally entered in the Genera...Closing entries are normally entered in the General Journal and then recorded on the work sheet.

True

→ False

True / False TB 04-10 Closing entries are normally enteredin the Genera...

TB 04-11 Adjusting entries are normally entered in the Gene...Adjusting entries are normally entered in the General Journal before they are recorded on the work sheet.

True

→ False

True / False TB 04-11 Adjusting entries are normallyentered in the Gene...

TB 04-12 On a work sheet, adjusted balances of revenues and...On a work sheet, adjusted balances of revenues and expenses are sorted to the Income Statement columns.

→ True

False

True / False TB 04-12 On a work sheet, adjusted balancesof revenues and...

TB 04-13 On the work sheet, a net income is entered in the ...On the work sheet, a net income is entered in the Income Statement Credit column and in the Statement of Changes in Equity or Balance Sheet Debitcolumn.

True

→ False

True / False TB 04-13 On the work sheet, a net income isentered in the ...


205 of 521 3/5/2014, 3:25 PM

553.

554.

555.

556.

TB 04-14 If interim financial statements are required, adju...If interim financial statements are required, adjusting entries must be journalized and posted to obtain the adjusted data needed for their preparation.

True

→ False

True / False TB 04-14 If interim financial statements arerequired, adju...

TB 04-15 To prepare the balance sheet, all necessary number...To prepare the balance sheet, all necessary numbers can be found in the balance sheet columns of the work sheet, including ending capital.

True

→ False

True / False TB 04-15 To prepare the balance sheet, allnecessary number...

TB 04-16 Revenue accounts should begin each accounting peri...Revenue accounts should begin each accounting period with zero balances.

→ True

False

True / False TB 04-16 Revenue accounts should begineach accounting peri...

TB 04-17 Closing revenue and expense accounts at the end of...Closing revenue and expense accounts at the end of the accounting period serves to make the revenue and expense accounts ready for use in thenext period.

→ True

False

True / False TB 04-17 Closing revenue and expenseaccounts at the end of...


206 of 521 3/5/2014, 3:25 PM

557.

558.

559.

560.

TB 04-18 Accounts that appear in the balance sheet are ofte...Accounts that appear in the balance sheet are often called permanent or nominal accounts.

True

→ False

True / False TB 04-18 Accounts that appear in the balancesheet are ofte...

TB 04-19 Revenue and expense accounts are permanent account...Revenue and expense accounts are permanent accounts and should not be closed at the end of the fiscal period.

True

→ False

True / False TB 04-19 Revenue and expense accounts arepermanent account...

TB 04-20 The closing process is a step in the accounting cy...The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

→ True

False

True / False TB 04-20 The closing process is a step in theaccounting cy...

TB 04-21 Asset, liability and revenue accounts are not clos...Asset, liability and revenue accounts are not closed as long as a company continues in business.

True

→ False

True / False TB 04-21 Asset, liability and revenue accountsare not clos...


207 of 521 3/5/2014, 3:25 PM

561.

562.

563.

564.

TB 04-22 Closing entries are needed at the end of the fisca...Closing entries are needed at the end of the fiscal period to close all ledger accounts.

True

→ False

True / False TB 04-22 Closing entries are needed at theend of the fisca...

TB 04-23 Closing entries accomplish the goal of reflecting ...Closing entries accomplish the goal of reflecting revenues and expenses in the owner's capital account.

→ True

False

True / False TB 04-23 Closing entries accomplish the goalof reflecting ...

TB 04-24 Income Summary is a temporary account.Income Summary is a temporary account.

→ True

False

True / False TB 04-24 Income Summary is a temporaryaccount.

TB 04-25 The closing process is a two-step process. First r...The closing process is a two-step process. First revenue, expense, and withdrawals are set to zero balance. Second, the process summarizes aperiod's assets and expenses.

True

→ False

True / False TB 04-25 The closing process is a two-stepprocess. First r...


208 of 521 3/5/2014, 3:25 PM

565.

566.

567.

568.

TB 04-26 An expense account is normally closed by debiting ...An expense account is normally closed by debiting Income Summary and crediting the expense account.

→ True

False

True / False TB 04-26 An expense account is normallyclosed by debiting ...

TB 04-27 The withdrawals account is normally closed by debi...The withdrawals account is normally closed by debiting it.

True

→ False

True / False TB 04-27 The withdrawals account is normallyclosed by debi...

TB 04-28 After posting the entries to close all revenue acc...After posting the entries to close all revenue accounts and all expense accounts, the Income Summary account of Waif Services has a $4,000 debitbalance. This shows that Waif Services earned a net income of $4,000.

True

→ False

True / False TB 04-28 After posting the entries to close allrevenue acc...

TB 04-29 After posting the entries to close all revenue and...After posting the entries to close all revenue and expense accounts, Hatfield Company's Income Summary account has a credit balance of $6,000, andthe Hatfield, Withdrawals account has a debit balance of $2,500. These balances indicate that net income for the accounting period amounted to$3,500.

True

→ False

True / False TB 04-29 After posting the entries to close allrevenue and...


209 of 521 3/5/2014, 3:25 PM

569.

570.

571.

572.

TB 04-30 Closing entries are designed to transfer the end-o...Closing entries are designed to transfer the end-of-period balances in the revenue accounts, the expense accounts, and the withdrawals account to abalance sheet equity account.

→ True

False

True / False TB 04-30 Closing entries are designed totransfer the end-o...

TB 04-31 In a sole proprietorship, the Income Summary accou...In a sole proprietorship, the Income Summary account is closed to the capital account

→ True

False

True / False TB 04-31 In a sole proprietorship, the IncomeSummary accou...

TB 04-32 When expenses exceed revenues, there is a loss and...When expenses exceed revenues, there is a loss and the Income Summary account has a credit balance.

True

→ False

True / False TB 04-32 When expenses exceed revenues,there is a loss and...

TB 04-33 The Income Summary account is used to close all ot...The Income Summary account is used to close all other temporary accounts at the end of an accounting period.

True

→ False

True / False TB 04-33 The Income Summary account isused to close all ot...


210 of 521 3/5/2014, 3:25 PM

573.

574.

575.

576.

TB 04-34 The Income Summary account is a permanent account ...The Income Summary account is a permanent account that will be carried forward year after year.

True

→ False

True / False TB 04-34 The Income Summary account is apermanent account ...

TB 04-35 The steps in the closing process are (1) close cre...The steps in the closing process are (1) close credit balances in revenue accounts to Income Summary; (2) close credit balances in expense accountsto Income Summary; (3) close Income Summary to Owner's Capital; (4) close Withdrawals to Owner's Capital.

True

→ False

True / False TB 04-35 The steps in the closing process are(1) close cre...

TB 04-36 The third closing entry is to close Withdrawals to...The third closing entry is to close Withdrawals to Income Summary.

True

→ False

True / False TB 04-36 The third closing entry is to closeWithdrawals to...

TB 04-37 A post-closing trial balance is a list of permanen...A post-closing trial balance is a list of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.

→ True

False

True / False TB 04-37 A post-closing trial balance is a listof permanen...


211 of 521 3/5/2014, 3:25 PM

577.

578.

579.

580.

TB 04-38 The aim of a post-closing trial balance is to veri...The aim of a post-closing trial balance is to verify that (1) total debits equal total credits for temporary accounts and (2) all temporary accounts havezero balances.

True

→ False

True / False TB 04-38 The aim of a post-closing trialbalance is to veri...

TB 04-39 Sharp's post-closing trial balance has debit total...Sharp's post-closing trial balance has debit totals of $40,350 and credit totals of $40,650. The next step is to review for errors in the closing process.

→ True

False

True / False TB 04-39 Sharp's post-closing trial balancehas debit total...

TB 04-40 The first step in the accounting cycle is to analy...The first step in the accounting cycle is to analyze and record transactions during the accounting period.

→ True

False

True / False TB 04-40 The first step in the accounting cycleis to analy...

TB 04-41 The accounting cycle refers to the steps in prepar...The accounting cycle refers to the steps in preparing the work sheet for users.

True

→ False

True / False TB 04-41 The accounting cycle refers to thesteps in prepar...


212 of 521 3/5/2014, 3:25 PM

581.

582.

583.

584.

TB 04-42 The first five steps in the accounting cycle inclu...The first five steps in the accounting cycle include analyzing transactions, journalizing, posting, preparing an unadjusted trial balance, and recordingadjusting entries.

→ True

False

True / False TB 04-42 The first five steps in the accountingcycle inclu...

TB 04-43 In order, the last four steps in the accounting cy...In order, the last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, preparing adjustingentries and preparing closing entries.

True

→ False

True / False TB 04-43 In order, the last four steps in theaccounting cy...

TB 04-44 A classified balance sheet organizes assets and li...A classified balance sheet organizes assets and liabilities into important subgroups.

→ True

False

True / False TB 04-44 A classified balance sheet organizesassets and li...

TB 04-45 An unclassified balance sheet provides more inform...An unclassified balance sheet provides more information to users than a classified balance sheet.

True

→ False

True / False TB 04-45 An unclassified balance sheetprovides more inform...


213 of 521 3/5/2014, 3:25 PM

585.

586.

587.

588.

TB 04-46 Current assets and current liabilities are expecte...Current assets and current liabilities are expected to be used up or come due within one year or the company's operating cycle.

→ True

False

True / False TB 04-46 Current assets and current liabilitiesare expecte...

TB 04-47 Assets are classified into current assets, investm...Assets are classified into current assets, investments, property, plant and equipment, and intangible assets.

→ True

False

True / False TB 04-47 Assets are classified into currentassets, investm...

TB 04-48 Current liabilities are cash and other resources t...Current liabilities are cash and other resources that are expected to be sold, collected, or used within the longer of one year or the company's operatingcycle.

True

→ False

True / False TB 04-48 Current liabilities are cash and otherresources t...

TB 04-49 Long-term investments can include land not current...Long-term investments can include land not currently being used in operations.

→ True

False

True / False TB 04-49 Long-term investments can includeland not current...


214 of 521 3/5/2014, 3:25 PM

589.

590.

591.

592.

593.

TB 04-50 Property, plant and equipment and intangible asset...Property, plant and equipment and intangible assets are long-term assets used to produce or sell products and services.

→ True

False

True / False TB 04-50 Property, plant and equipment andintangible asset...

TB 04-51 Current liabilities include accounts receivable, u...Current liabilities include accounts receivable, unearned revenues, and taxes owed.

True

→ False

True / False TB 04-51 Current liabilities include accountsreceivable, u...

TB 04-52 For a partnership, the equity section is called Sh...For a partnership, the equity section is called Shareholders Equity.

True

→ False

True / False TB 04-52 For a partnership, the equity sectionis called Sh...

TB 04-53 Reversing entries are optional.Reversing entries are optional.

→ True

False

True / False TB 04-53 Reversing entries are optional.

TB 04-54 Reversing entries are prepared to adjust accrued a...Reversing entries are prepared to adjust accrued assets and liabilities that were created by adjusting entries at the end of the previous reporting period.

→ True

False

True / False TB 04-54 Reversing entries are prepared toadjust accrued a...


215 of 521 3/5/2014, 3:25 PM

594.

595.

596.

597.

TB 04-55 The current ratio is used to evaluate the ability ...The current ratio is used to evaluate the ability of a business to meet its short-term obligations.

→ True

False

True / False TB 04-55 The current ratio is used to evaluatethe ability ...

TB 04-56 The current ratio is calculated by dividing curren...The current ratio is calculated by dividing current liabilities by current assets.

True

→ False

True / False TB 04-56 The current ratio is calculated bydividing curren...

TB 04-57 Harley Ravidson's current assets are $400 million ...Harley Ravidson's current assets are $400 million and its current liabilities are $250 million. Its current ratio is .63 to 1.

True

→ False

True / False TB 04-57 Harley Ravidson's current assetsare $400 million ...

TB 04-58 Sharp has current assets of $15,000 and current li...Sharp has current assets of $15,000 and current liabilities of $9,500. Its current ratio is 1.6 to 1.

→ True

False

True / False TB 04-58 Sharp has current assets of $15,000and current li...


216 of 521 3/5/2014, 3:25 PM

598.

599.

600.

TB 04-59 Harley Ravidson's current ratio is .9 to 1. The in...Harley Ravidson's current ratio is .9 to 1. The industry average current ratio is 1.2. Harley Davidson does not have a problem in covering its currentliabilities because of its strong sales and position in its industry.

True

→ False

True / False TB 04-59 Harley Ravidson's current ratio is .9to 1. The in...

TB 04-60 The information on a work sheet can be used to pre...The information on a work sheet can be used to prepare:

Year end financial statements.

Adjusting entries.

Closing entries.

Interim financial statements.

→ All of these answers are correct.

Multiple Choice TB 04-60 The information on a work sheet canbe used to pre...

TB 04-61 A 10-column spreadsheet used to draft a company's ...A 10-column spreadsheet used to draft a company's unadjusted trial balance, adjusting entries, adjusted trial balance, and financial statements, andwhich is an optional step in the accounting process, is a(n):

Adjusted trial balance.

→ Work sheet.

Post-closing trial balance.

Unadjusted trial balance.

Book of final entry.

Multiple Choice TB 04-61 A 10-column spreadsheet used todraft a company's ...


217 of 521 3/5/2014, 3:25 PM

601.

602.

603.

TB 04-62 Internal documents prepared by accountants when or...Internal documents prepared by accountants when organizing the information presented in formal reports to internal and external decision makers arecalled:

Adjusting papers.

Statement papers.

→ Working papers.

Closing papers.

Business papers.

Multiple Choice TB 04-62 Internal documents prepared byaccountants when or...

TB 04-63 Accumulated Depreciation, Equipment, Accounts Rece...Accumulated Depreciation, Equipment, Accounts Receivable, and Service Fees Earned would be sorted to which respective columns in completing awork sheet?

→ Statement of changes in equity or Balance Sheet—Credit; Statement of changes in equity or Balance Sheet—Debit; and IncomeStatement—Credit.

Statement of changes in equity or Balance Sheet—Debit; Statement of changes in equity or Balance Sheet—Credit; and IncomeStatement—Credit.

Income Statement—Debit; Statement of changes in equity or Balance Sheet—Debit; and Income Statement—Credit.

Income Statement—Debit; Income Statement—Debit; and Statement of changes in equity or Balance Sheet—Credit.

Statement of changes in equity or Balance Sheet—Credit; Income Statement—Debit; and Income Statement—Credit.

Multiple Choice TB 04-63 Accumulated Depreciation,Equipment, Accounts Rece...

TB 04-64 The Unadjusted Trial Balance columns of the work s...The Unadjusted Trial Balance columns of the work sheet show the balance in the Office Supplies account at $750. The Adjustments columns show that$425 of these supplies were used during the period. The amount shown as Office Supplies in the Balance Sheet columns is:

→ $325 debit.

$325 credit.

$425 debit.

$750 debit.

$750 credit.

Multiple Choice TB 04-64 The Unadjusted Trial Balancecolumns of the work s...


218 of 521 3/5/2014, 3:25 PM

604.

605.

606.

TB 04-65 Which of the following statements is incorrect?Which of the following statements is incorrect?

Working papers are invaluable tools of the accountant.

The work sheet shows the effects of adjustments on the account balances.

After the work sheet is completed, the work sheet information is used to prepare the financial statements.

→ On the work sheet, the accountant sorts the adjusted amounts into columns according to whether the accounts are used in preparingthe unadjusted trial balance or the adjusted trial balance.

The work sheet is an optional step in the accounting cycle.

Multiple Choice TB 04-65 Which of the following statements isincorrect?

TB 04-66 A company shows an $800 balance in Prepaid Insuran...A company shows an $800 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns showexpired insurance of $600. This adjusting entry results in:

→ $600 less net income.

$600 more net income.

$200 difference between the debit and credit columns of the unadjusted trial balance.

$400 in the Income Statement Debit column on the work sheet.

$400 in the Balance Sheet Credit column on the work sheet.

Multiple Choice TB 04-66 A company shows an $800 balancein Prepaid Insuran...

TB 04-67 If, in preparing a work sheet, an adjusted trial b...If, in preparing a work sheet, an adjusted trial balance amount is sorted to the wrong work sheet column, the Balance Sheet columns will balance oncompleting the work sheet, but with the wrong net income, if the amount sorted in error is:

An expense amount entered in the Balance Sheet Credit column.

A revenue amount entered in the Balance Sheet Debit column.

→ A liability amount entered in the Income Statement Credit column.

An asset amount entered in the Balance Sheet Credit column.

A liability amount entered in the Balance Sheet Debit column.

Multiple Choice TB 04-67 If, in preparing a work sheet, anadjusted trial b...


219 of 521 3/5/2014, 3:25 PM

607.

608.

TB 04-68 If the Balance Sheet columns of a work sheet fail ...If the Balance Sheet columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet Credit column, thecause could be:

An expense amount entered in the Balance Sheet Debit column.

A revenue amount entered in the Balance Sheet Credit column.

An asset amount entered in the Income Statement Debit column.

→ A liability amount entered in the Balance Sheet Debit column.

A liability amount entered in the Income Statement Credit column.

Multiple Choice TB 04-68 If the Balance Sheet columns of awork sheet fail ...

TB 04-69 The following items appeared on a December 31 Exce...The following items appeared on a December 31 Excel work sheet. Based on the following information, what is net income for the year?

$1,725.

→ $1,855.

$2,060.

$4,125

$4,670.

Multiple Choice TB 04-69 The following items appeared on aDecember 31 Exce...


220 of 521 3/5/2014, 3:25 PM

609.

610.

611.

TB 04-70 Which of the following errors would cause the bala...Which of the following errors would cause the balance sheet columns of a work sheet to be out of balance?

Entering an asset amount in the Income Statement Debit column.

Entering a liability amount in the Income Statement Credit column.

Entering an expense amount in the Balance Sheet Debit column.

→ Entering a revenue amount in the Balance Sheet Debit column.

Entering a liability amount in the Balance Sheet Credit column.

Multiple Choice TB 04-70 Which of the following errors wouldcause the bala...

TB 04-71 The Unadjusted Trial Balance columns of a work she...The Unadjusted Trial Balance columns of a work sheet total $84,000. The Adjustments columns contain entries for the following:

(1) Office supplies used during the period, $1,200.(2) Expiration of prepaid rent, $700.(3) Accrued salaries expense, $500.(4) Depreciation expense, $800.(5) Accrued repair service fees receivable, $400.

The Adjusted Trial Balance columns total:

$80,400.

$84,000.

→ $85,700.

$85,900.

$87,600.

Multiple Choice TB 04-71 The Unadjusted Trial Balancecolumns of a work she...

TB 04-72 Another name for temporary accounts is:Another name for temporary accounts is:

Real accounts.

Contra accounts.

Accrued accounts.

Balance column accounts.

→ Nominal accounts.

Multiple Choice TB 04-72 Another name for temporaryaccounts is:


221 of 521 3/5/2014, 3:25 PM

612.

613.

614.

TB 04-73 When closing entries are made:When closing entries are made:

All ledger accounts are closed to start the new fiscal period.

→ All temporary accounts are closed but not the permanent accounts.

All real accounts are closed but not the temporary accounts.

All permanent accounts are closed but not the temporary accounts.

All balance sheet accounts are closed.

Multiple Choice TB 04-73 When closing entries are made:

TB 04-74 Accounts that are used to describe revenues, expen...Accounts that are used to describe revenues, expenses, and owner's withdrawals, and are closed at the end of the reporting period, are:

Real accounts.

→ Temporary accounts.

Closing accounts.

Permanent accounts.

Ledger accounts.

Multiple Choice TB 04-74 Accounts that are used to describerevenues, expen...

TB 04-75 Which of the following statements is incorrect?Which of the following statements is incorrect?

→ Permanent accounts are another name for nominal accounts.

Temporary accounts carry a zero balance at the beginning of each accounting period.

The Income Summary account is a temporary account.

Real accounts remain open as long as the asset, liability, or equity items recorded in the accounts continue in existence.

Permanent accounts are another name for real accounts.

Multiple Choice TB 04-75 Which of the following statements isincorrect?


222 of 521 3/5/2014, 3:25 PM

615.

616.

617.

TB 04-76 Closing the temporary accounts at the end of each ...Closing the temporary accounts at the end of each accounting period:

Serves to transfer the effects of these accounts to the proper equity account on the balance sheet.

Prepares the withdrawals account for use in the next period.

Gives the revenue and expense accounts zero balances.

Gives the withdrawals account a zero balance.


Multiple Choice TB 04-76 Closing the temporary accounts atthe end of each ...

TB 04-77 Accounts that are used to describe assets, liabili...Accounts that are used to describe assets, liabilities, and equity, that are not closed as long as the company continues to own the assets, owe theliabilities, or have equity, and whose balances appear on the balance sheet are called:

Nominal accounts.

Temporary accounts.

→ Permanent accounts.

Contra accounts.

Accrued accounts.

Multiple Choice TB 04-77 Accounts that are used to describeassets, liabili...

TB 04-78 Real accounts are:Real accounts are:

Another name for temporary accounts.

→ Another name for permanent accounts.

Closed at the end of the accounting period.

Income statement accounts.

Not shown on the balance sheet.

Multiple Choice TB 04-78 Real accounts are:


223 of 521 3/5/2014, 3:25 PM

618.

619.

620.

TB 04-79 Journal entries recorded at the end of each accoun...Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming year andto update the owner's capital account for the events of the year just finished are:

Adjusting entries.

→ Closing entries.

Final entries.

Work sheet entries.

None of these answers is correct.

Multiple Choice TB 04-79 Journal entries recorded at the endof each accoun...

TB 04-80 The Income Summary account is:The Income Summary account is:

The account from which the amount of the net income or loss is transferred to the owners' capital accounts in a partnership.

A temporary account.

Used in the closing process to summarize the amounts of revenues and expenses.

Not a permanent account.


Multiple Choice TB 04-80 The Income Summary account is:

TB 04-81 The special account used only in the closing proce...The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to(or subtracted from) the owner's capital account is the:

→ Income Summary account.

Closing account.

Balance column account.

Contra account.

Nominal account.

Multiple Choice TB 04-81 The special account used only in theclosing proce...


224 of 521 3/5/2014, 3:25 PM

621.

622.

TB 04-82 J. Flow, the proprietor of Flow Services, withdrew...J. Flow, the proprietor of Flow Services, withdrew $8,700 from his business during 2015. These withdrawals will result in which of the following closingentries at the end of 2015?

→

Multiple Choice TB 04-82 J. Flow, the proprietor of FlowServices, withdrew...

TB 04-83 Given the following accounts and their adjusted ba...Given the following accounts and their adjusted balances before closing entries are posted, what amount will be posted to Bessie Cool, Capital in theprocess of closing the Income Summary account? Assume all accounts have normal balances.

$7,180 credit.

$16,780 debit.

$16,780 credit.

→ $18,280 credit.

$23,780 credit.

Multiple Choice TB 04-83 Given the following accounts andtheir adjusted ba...


225 of 521 3/5/2014, 3:25 PM

623.

624.

TB 04-84 A company had revenues of $75,000, withdrawals of ...A company had revenues of $75,000, withdrawals of $10,000 and expenses of $62,000 during an accounting period. Which of the following entriesshould not be journalized in the closing process?

→ All of these should be journalized in the closing process.

Multiple Choice TB 04-84 A company had revenues of$75,000, withdrawals of ...

TB 04-85 After all appropriate closing entries to the follo...After all appropriate closing entries to the following accounts have been made, what will be the balance in the Jeff Corvette, Capital account?

$65,000.

$80,000.

$130,000.

→ $145,000.

$280,000.

Multiple Choice TB 04-85 After all appropriate closing entriesto the follo...


226 of 521 3/5/2014, 3:25 PM

625.

626.

627.

TB 04-86 The J. Dawson, Capital account has a credit balanc...The J. Dawson, Capital account has a credit balance of $1,200 before closing entries are made. If total revenues for the year are $65,200, totalexpenses $49,800, and withdrawals are $2,400, what is the ending balance in the J. Dawson, Capital account after all closing entries have beenmade?

$5,200.

$7,600.

→ $14,200.

$16,600.

$23,200.

Multiple Choice TB 04-86 The J. Dawson, Capital account hasa credit balanc...

TB 04-87 The Income Summary account is used:The Income Summary account is used:

To adjust and update asset accounts.

→ To close the revenue and expense accounts.

To determine the appropriate withdrawal amount.

To replace the income statement under certain circumstances.

To replace the capital account in some businesses.

Multiple Choice TB 04-87 The Income Summary account isused:

TB 04-88 Emilia Feridy, the proprietor of EF Services, with...Emilia Feridy, the proprietor of EF Services, withdrew a total of $50 for to pay for her daughter's swimming lessons. What is the entry needed to recordthis transaction?

Debit Emilia Feridy, Capital and credit Cash for $50.

→ Debit Emilia Feridy, Withdrawals and credit Cash for $50.

Debit Emilia Feridy, Withdrawals and credit Emilia Feridy, Capital for $50.

Debit Emilia Feridy, Capital and credit Emilia Feridy, Withdrawals for $50.

Debit Cash and credit Emilia Feridy, Withdrawals for $50.

Multiple Choice TB 04-88 Emilia Feridy, the proprietor of EFServices, with...


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628.

629.

630.

631.

TB 04-89 Which statement is incorrect?Which statement is incorrect?

Revenue accounts are closed to Income Summary.

Expense accounts are closed to Income Summary.

Income Summary is closed to Capital.

→ Withdrawals are closed to Income Summary.

Withdrawals are closed to Capital.

Multiple Choice TB 04-89 Which statement is incorrect?

TB 04-90 A trial balance prepared after the adjusting and c...A trial balance prepared after the adjusting and closing entries have been posted, and which is the final step in the accounting cycle, is a(n):

Unadjusted trial balance.

→ Post-closing trial balance.

Book of final entry.

Adjusted trial balance.

Work sheet.

Multiple Choice TB 04-90 A trial balance prepared after theadjusting and c...

TB 04-91 An error is indicated if the following account has...An error is indicated if the following account has a balance appearing on the post-closing trial balance:

Office Equipment.

Accumulated Depreciation, Office Equipment.

→ Depreciation expense, Office Equipment.

Ted Nash, Capital.

Salaries Payable.

Multiple Choice TB 04-91 An error is indicated if the followingaccount has...

TB 04-92 A post-closing trial balance shows:A post-closing trial balance shows:

→ All ledger accounts with a balance, none of which can be temporary accounts.

All ledger accounts with a balance, none of which can be real accounts.

All ledger accounts with a balance, which include some temporary and some real accounts.

Only revenue and expense accounts.

Only asset accounts.

Multiple Choice TB 04-92 A post-closing trial balance shows:


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632.

633.

634.

TB 04-93 Which of the following statements is true?Which of the following statements is true?

Journalizing consists of analyzing and recording transactions in T-accounts.

→ Preparing a post-closing trial balance helps to prove the accuracy of the adjusting and closing procedures.

The information on the work sheet can be used in place of preparing financial statements.

By using a work sheet to prepare adjusting entries you need not post these entries to the ledger accounts.

All of these statements are true.

Multiple Choice TB 04-93 Which of the following statements istrue?

TB 04-94 The eight recurring steps performed each accountin...The eight recurring steps performed each accounting period, starting with recording transactions in the journal and continuing through the post-closingtrial balance, is called the:

Accounting period.

Operating cycle.

→ Accounting cycle.

Closing cycle.

Natural business year.

Multiple Choice TB 04-94 The eight recurring steps performedeach accountin...

TB 04-95 Which of the following is the final step in the ac...Which of the following is the final step in the accounting cycle?

Journalizing.

Preparing an adjusted trial balance.

→ Preparing a post-closing trial balance.

Preparing the statements.

Preparing a work sheet.

Multiple Choice TB 04-95 Which of the following is the finalstep in the ac...


229 of 521 3/5/2014, 3:25 PM

635.

636.

637.

638.

TB 04-96 A classified balance sheet:A classified balance sheet:

Measures a company's ability to pay its bills on time.

→ Organizes assets and liabilities into important subgroups.

Presents revenues, expenses and net income.

Shows operating, investing, and financing activities.

Shows the effect of net income and withdrawals on owner's capital.

Multiple Choice TB 04-96 A classified balance sheet:

TB 04-97 The asset section of a classified balance sheet in...The asset section of a classified balance sheet includes:

→ Current assets, long-term investments, property, plant and equipment, and intangible assets.

Current assets, long-term assets, equity, and intangible assets.

Current assets, long-term investments, property, plant and equipment, and withdrawals.

Current liabilities, long-term investments, property, plant and equipment, and intangible assets.

Current assets, liabilities, property, plant and equipment, and intangible assets.

Multiple Choice TB 04-97 The asset section of a classifiedbalance sheet in...

TB 04-98 Current liabilities become due:Current liabilities become due:

Within one year.

Within the operating cycle of a business.

When bills have to be paid.

→ A or B, whichever is longer.

All of these answers are correct.

Multiple Choice TB 04-98 Current liabilities become due:

TB 04-99 The normal order for the asset section of a classi...The normal order for the asset section of a classified balance sheet is:

Current assets, prepaid expenses, long-term investments, intangible assets.

Long-term investments, current assets, property, plant and equipment, intangible assets.

→ Current assets, long-term investments, property, plant and equipment, intangible assets.

Intangible assets, current assets, long-term investments, property, plant and equipment.

Property, plant and equipment, intangible assets, long-term investments, current assets.

Multiple Choice TB 04-99 The normal order for the assetsection of a classi...


230 of 521 3/5/2014, 3:25 PM

639.

640.

641.

642.

TB 04-100 The ending balance of owner's capital is calculate...The ending balance of owner's capital is calculated as:

→ Owner's capital account balance plus net income minus the withdrawals account balance.

Owner's capital account balance minus net loss plus the withdrawals account balance.

Net income minus the withdrawals account balance.

Assets plus liabilities.

None of these answers is correct.

Multiple Choice TB 04-100 The ending balance of owner'scapital is calculate...

TB 04-101 Reversing entries:Reversing entries:

→ Are optional.

Are mandatory.

Fix errors in journal entries.

Are required by CRA.

Are not posted to the ledger.

Multiple Choice TB 04-101 Reversing entries:

TB 04-102 Reversing entries are:Reversing entries are:

Optional.

Linked to accrued assets and liabilities that were created by adjusting entries at the end of the previous accounting period.

Used to simplify a company's record keeping.

Dated the first day of the next accounting period.


Multiple Choice TB 04-102 Reversing entries are:

TB 04-103 The current ratio:The current ratio:

Is used to measure a company's profitability.

Is used to measure the relationship between assets and long-term debt.

Measures the effect of operating income on profit.

→ Is used to evaluate a company's ability to pay its short-term obligations.

Only relates to long term liabilities.

Multiple Choice TB 04-103 The current ratio:


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643.

644.

645.

TB 04-104 The current ratio:The current ratio:

Is current assets divided by current liabilities.

Helps to assess a company's ability to pay its debts in the near future.

Suggests there may be problems in a business if it is less than 1.

Is a measure of a company's liquidity.


Multiple Choice TB 04-104 The current ratio:

TB 04-105 (A) In a sole proprietorship, Income Summary is cl...(A) In a sole proprietorship, Income Summary is closed to what account? (B) In following the steps of the accounting cycle, what two steps must bedone before preparation of an unadjusted trial balance?

(A) Owner's capital account. (B) Journalizing and posting.

Short Answer TB 04-105 (A) In a sole proprietorship, IncomeSummary is cl...

TB 04-106 The following are the steps in the accounting cycl...The following are the steps in the accounting cycle. List them in the order in which they are completed:

Completing the work sheetPostingPreparing an unadjusted trial balanceJournalizingPreparing the statementsClosing the temporary accountsAdjusting the ledger accountsPreparing a post-closing trial balance

(1) Journalizing(2) Posting(3) Preparing an unadjusted trial balance(4) Completing the work sheet(5) Adjusting the ledger accounts(6) Preparing the statements(7) Closing the temporary accounts(8) Preparing a post-closing trial balance

Short Answer TB 04-106 The following are the steps in theaccounting cycl...


232 of 521 3/5/2014, 3:25 PM

646.

TB 04-107 The alphabetized adjusted trial balance for SimCo ...The alphabetized adjusted trial balance for SimCo Electrical Outfitters at August 31, 2015, is shown below. Identify how each account balance would beclassified on a balance sheet given the following classification symbols:


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Short Answer TB 04-107 The alphabetized adjusted trialbalance for SimCo ...


234 of 521 3/5/2014, 3:25 PM

647.

TB 04-108 In the blank space beside each numbered item, ente...In the blank space beside each numbered item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet,enter "z" in the blank.

Short Answer TB 04-108 In the blank space beside eachnumbered item, ente...


235 of 521 3/5/2014, 3:25 PM

648.

649.

TB 04-109 Calculate the current ratio in each of the followi...Calculate the current ratio in each of the following cases.

Short Answer TB 04-109 Calculate the current ratio in eachof the followi...

TB 04-110 Describe a work sheet and explain why it is useful...Describe a work sheet and explain why it is useful.

A work sheet is a useful tool for organizing the preparation and analysis of financial statements. It contains pairs of debit and credit columns for thetrial balance, adjusting entries, adjusted trial balance, income statement accounts, and balance sheet accounts.

Short Answer TB 04-110 Describe a work sheet and explainwhy it is useful...


236 of 521 3/5/2014, 3:25 PM

650.

TB 04-111 Using the following partial Excel work sheet for C...Using the following partial Excel work sheet for Cozy Motel, prepare the Income Statement, the Statement of Changes in Equity, and an unclassifiedBalance Sheet for the company. Assume the owner did not make any investments in the business during the year.


237 of 521 3/5/2014, 3:25 PM

Short Answer TB 04-111 Using the following partial Excelwork sheet for C...


238 of 521 3/5/2014, 3:25 PM

651.

TB 04-112 The unadjusted trial balance of Edward Pace, CGA i...The unadjusted trial balance of Edward Pace, CGA is entered on the work sheet below. Complete the work sheet using the following information:

(a) Salaries earned by employees but unpaid and unrecorded, $500.(b) An inventory of supplies showed $800 of unused supplies on hand.(c) Estimated depreciation on equipment, $1,300.

Short Answer TB 04-112 The unadjusted trial balance ofEdward Pace, CGA i...


239 of 521 3/5/2014, 3:25 PM

652.

TB 04-113 Using the following partial Excel work sheet for G...Using the following partial Excel work sheet for Gold Forest Service Co., prepare the Income Statement, the Statement of Changes in Equity, and anunclassified Balance Sheet. Assume the owner did not make any investments in the business during the year.


240 of 521 3/5/2014, 3:25 PM

Short Answer TB 04-113 Using the following partial Excelwork sheet for G...


241 of 521 3/5/2014, 3:25 PM

653.

TB 04-114 Shown below are data taken from the unadjusted and...Shown below are data taken from the unadjusted and adjusted trial balances for Wallaby Company at December 31, 2015:

The differences between the unadjusted and adjusted trial balances can be explained by adjusting entries that were made for an unrecorded sale,depreciation, expired insurance, office supplies expense, and accrued salaries expense. Determine the amounts that should appear in the trial balanceblanks labelled A through H and write your answers below. (Show credit amounts in parentheses.)

A. ____________ B. ___________ C. ____________ D. ____________E. ____________ F. ___________ G. ____________ H. ____________

(a) (8,100) (b) 10,000 (c) (113,420) (d) 49,600 (e) 220 (f) 6,800 (g) 464,700 (h) (540,000)

Short Answer TB 04-114 Shown below are data taken fromthe unadjusted and...


242 of 521 3/5/2014, 3:25 PM

654.

TB 04-115 Below is an alphabetical listing of General Ledger...Below is an alphabetical listing of General Ledger accounts with identifying numbers for Scott's Suntanning Parlour. Indicate the accounts debited andcredited in each of the following transactions by placing the proper account identifying number(s) in the columns to the right of each transaction.

Short Answer TB 04-115 Below is an alphabetical listing ofGeneral Ledger...


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655.

656.

657.

TB 04-116 Explain why closing entries are a necessary step i...Explain why closing entries are a necessary step in the accounting cycle.

Closing entries are a necessary step because we want the:

1. Revenue, expense, and withdrawals accounts (a) to be reflected in equity and (b) to begin with zero balances after measuring the results from theperiod just ended.2. Owner's capital account to reflect (a) increases from net income and (b) decreases from net losses and withdrawals from the period just ended.

Short Answer TB 04-116 Explain why closing entries are anecessary step i...

TB 04-117 Indicate beside each of the following accounts whe...Indicate beside each of the following accounts whether the account is a temporary or permanent account.

(a) Cash(b) Prepaid insurance(c) Unearned fees(d) Accounts receivable(e) Insurance expense(f) Smith, capital(g) Smith, withdrawals(h) Rent expense(i) Fees earned(j) Supplies(k) Supplies expense(l) Depreciation expense, building(m) Accumulated depreciation, building

(a) permanent (b) permanent (c) permanent (d) permanent (e) temporary (f) permanent (g) temporary (h) temporary (i) temporary (j) permanent (k)temporary (l) temporary (m) permanent

Short Answer TB 04-117 Indicate beside each of thefollowing accounts whe...

TB 04-118 Explain the purpose of closing entries and describ...Explain the purpose of closing entries and describe the closing process.

The purpose of closing entries is to transfer the end of period balances in the temporary accounts to the owner's capital account. The closingprocess has four steps: (1) Close credit balances in revenue accounts to income summary, (2) close debit balances in expense accounts to incomesummary, (3) close income summary to the capital account, (4) close withdrawals to the capital account.

Short Answer TB 04-118 Explain the purpose of closingentries and describ...


244 of 521 3/5/2014, 3:25 PM

658.

TB 04-119 Explain why temporary accounts are closed each per...Explain why temporary accounts are closed each period.

Temporary accounts are closed at the end of each accounting period for two main reasons. First, the closing process updates the owner's capitalaccount to include the effects of all transactions and events recorded for the period. Second, it prepares revenue, expense and withdrawal accountsfor the next reporting period by bringing the balances in those accounts to zero.

Short Answer TB 04-119 Explain why temporary accountsare closed each per...


245 of 521 3/5/2014, 3:25 PM

659.

TB 04-120 Presented below are the year-end balances at Octob...Presented below are the year-end balances at October 31 of Max Missle Paintball Co. All accounts have normal balances.

Prepare the necessary closing entries at October 31.


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Short Answer TB 04-120 Presented below are the year-endbalances at Octob...


247 of 521 3/5/2014, 3:25 PM

660.

TB 04-121 Shown below is Bill Brady Law's adjusted trial bal...Shown below is Bill Brady Law's adjusted trial balance at the end of its annual accounting period.

Prepare the necessary closing entries.


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Short Answer TB 04-121 Shown below is Bill Brady Law'sadjusted trial bal...


249 of 521 3/5/2014, 3:25 PM

661.

TB 04-122 The adjusted trial balance of Sara's Photography f...The adjusted trial balance of Sara's Photography follows:

1. Prepare the necessary closing entries at December 31.2. What is the balance of Sara's capital account after the bookkeeper posts the closing entries?

1.


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2.

Short Answer TB 04-122 The adjusted trial balance of Sara'sPhotography f...


251 of 521 3/5/2014, 3:25 PM

662.

TB 04-123 The following are selected accounts and their bala...The following are selected accounts and their balances after adjustments at May 31, 2015, the end of Mark's Furniture Refinishing's fiscal year.

1. Prepare the necessary closing entries at December 31.2. What is the balance of Mark's capital account after the bookkeeper posts the closing entries?

1.


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2.

Short Answer TB 04-123 The following are selectedaccounts and their bala...


253 of 521 3/5/2014, 3:25 PM

663.

TB 04-124 The adjusted trial balance of Richardson Electric ...The adjusted trial balance of Richardson Electric at May 31, 2015 is as follows:

Prepare the necessary closing entries at May 31.

Short Answer TB 04-124 The adjusted trial balance ofRichardson Electric ...


254 of 521 3/5/2014, 3:25 PM

664.

TB 04-125 The items that follow appeared in the Income State...The items that follow appeared in the Income Statement columns of the work sheet prepared for a sole proprietorship at year-end, December 31, 2015.Also, the owner's withdrawals account was debited for $12,000 during the year. Prepare the necessary closing entries at December 31.

Short Answer TB 04-125 The items that follow appeared inthe Income State...


255 of 521 3/5/2014, 3:25 PM

665.

666.

TB 04-126 The amounts below appeared in the Income Statement...The amounts below appeared in the Income Statement and Balance Sheet columns of a company's December 31 work sheet. In the space providedrecord the closing entries on December 31 (no explanations are necessary).

Short Answer TB 04-126 The amounts below appeared inthe Income Statement...

TB 04-127 Discuss the purpose of a post-closing trial balanc...Discuss the purpose of a post-closing trial balance.

A post-closing trial balance is a list of permanent accounts and their balances after all the closing entries are journalized and posted. It is used toverify the equality of debits and credits of the permanent account balances. It also verifies that the temporary accounts have zero balances.

Short Answer TB 04-127 Discuss the purpose of apost-closing trial balanc...


256 of 521 3/5/2014, 3:25 PM

667.

668.

TB 04-128 Identify the steps in the accounting cycle.Identify the steps in the accounting cycle.

The accounting cycle consists of ten steps: (1) analyze transactions, (2) journalize entries, (3) post data to the ledger, (4) prepare an unadjusted trialbalance, (5) prepare and post adjusting entries, (6) prepare an adjusted trial balance, (7) prepare financial statements, (8) prepare and post closingentries, (9) prepare a post-closing trial balance.

Short Answer TB 04-128 Identify the steps in the accountingcycle.

TB 04-129 Describe a classified balance sheet.Describe a classified balance sheet.

Classified balance sheets usually report four groups of assets: current assets, long-term investments, property, plant and equipment, and intangibleassets. Liabilities are divided into current and long-term. For sole proprietorships and partnerships capital accounts are reported under Equity. Forcorporations, the equity section is called Shareholders Equity.

Short Answer TB 04-129 Describe a classified balancesheet.


257 of 521 3/5/2014, 3:25 PM

669.

TB 04-130 Classified balance sheets commonly include the fol...Classified balance sheets commonly include the following categories.

(a) Current assets(b) Investments(c) Property, plant and equipment(d) Intangible assets(e) Current liabilities(f) Long-term liabilities(g) Equity

Indicate the typical classification of each item listed below by placing the letter of the correct balance sheet category in the blank space next to the item.

(1) ______ Margarita Acosta, capital(2) ______ Cash(3) ______ Office supplies(4) ______ Accounts receivable(5) ______ Prepaid expenses(6) ______ Merchandise inventory(7) ______ Buildings used in business operations(8) ______ Wages payable(9) ______ Long-term note payable(10) ______ Accounts payable(11) ______ Patents(12) ______ Land held for future plant expansion

(1) g (2) a (3) a (4) a (5) a (6) a (7) c (8) e (9) f (10) e (11) d (12) b

Short Answer TB 04-130 Classified balance sheetscommonly include the fol...


258 of 521 3/5/2014, 3:25 PM

Below is the year-end adjusted trial balance for L...Below is the year-end adjusted trial balance for Lucie Accounting.

Section Break Below is the year-end adjusted trial balance forL...


259 of 521 3/5/2014, 3:25 PM

670.

TB 04-131 Using Ref 4-1 prepare an income statement, stateme...Using Ref 4-1 prepare an income statement, statement of changes in equity and a classified balance sheet. This is Lucie's first year of operations.


260 of 521 3/5/2014, 3:25 PM

671.

672.

Short Answer TB 04-131 Using Ref 4-1 prepare an incomestatement, stateme...

TB 04-132 Using the information from Lucie Accounting (Ref 4...Using the information from Lucie Accounting (Ref 4-1), calculate the current ratio.

$28,700 ¸ $16,000 = 1.79 to 1

Short Answer TB 04-132 Using the information from LucieAccounting (Ref 4...

TB 04-133 Explain the purpose of reversing entries.Explain the purpose of reversing entries.

Reversing entries are an optional part of the accounting cycle. They apply to accrued assets and liabilities. The purpose of the reversing entries is tosimplify regular transaction journal entries made during the subsequent accounting period. Reversing entries have no effect on the financialstatements.

Short Answer TB 04-133 Explain the purpose of reversingentries.


261 of 521 3/5/2014, 3:25 PM

673.

TB 04-134 Explain the current ratio. Describe how it is used...Explain the current ratio. Describe how it is used to evaluate a company.

The current ratio is current assets divided by current liabilities. It is used to evaluate a company's ability to pay its current debts with the amount ofcurrent assets available.

Short Answer TB 04-134 Explain the current ratio. Describehow it is used...


262 of 521 3/5/2014, 3:25 PM

674.

TB 04-135 Listed below are a number of accounts for Melcier ...Listed below are a number of accounts for Melcier Industries. Use the schedule shown below to classify each account, and indicate if it is included inthe closing process and, if so, how it is closed.


263 of 521 3/5/2014, 3:25 PM

675.

676.

Short Answer TB 04-135 Listed below are a number ofaccounts for Melcier ...

TB 05-01 A merchandiser earns net income by buying and sell...A merchandiser earns net income by buying and selling merchandise.

→ True

False

True / False TB 05-01 A merchandiser earns net incomeby buying and sell...

TB 05-02 A service company earns net income by buying and s...A service company earns net income by buying and selling merchandise.

True

→ False

True / False TB 05-02 A service company earns netincome by buying and s...


264 of 521 3/5/2014, 3:25 PM

larson 14e v1 tb - amazon web services · revenue acc... tb 04-29 after posting the entries to...

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