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Exam 4: Completing the Accounting Cycle

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Question 81

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Evan Roberts owns a business,Shore Sports,that rents canoes and kayaks.Below is the adjusted trial balance at December 31.​ The entry required to close the expense accounts at the end of the period will

A) increase Owner's Capital by $35,520
B) decrease Owner's Capital by $35,520
C) increase Owner's Capital by $33,520
D) decrease Owner's Capital by $33,520

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

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Question 82

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Selected T accounts appear below for the current year for Linda's Surveying Services.​ Prepare a statement of owner's equity.

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Question 83

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List and describe the purpose of the four closing entries.

Match each journal entry that follows as one of the types of journal entries (a-c) below. -

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

After all of the account balances have been extended to the Balance Sheet columns of the work sheet,the totals of the Debit and Credit columns show debits of $37,686 and credits of $41,101.This indicates that

There are two closing entries.The first one is to close _____; the second one is to close _____.

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 revenue and expense account balances were taken from the Income Statement columns of the work sheet for Fraser Services Co.for December 31:​ Prepare an income statement.

Land is an example of a plant asset.

The journal entry to close Fees Earned,$750,and Rent Revenue,$175,during the year-end closing process would be

Kirk Enterprises offers rug cleaning services to business clients.Below is the trial balance for Kirk Enterprises,which was prepared on the end-of-period spreadsheet (work sheet)for the year ended July 31.​Required Enter the adjustment data in the work sheet for the transactions shown below and place the balances in the Adjusted Trial Balance columns.​Adjustments:a) The equipment is estimated to last for five years with no salvage value.The asset will be depreciated evenly over its useful life.Record one month's depreciation.b) Accrued wages,$2.c) Unused supplies on hand,$8.d) Of the unearned revenue,75% has been earned.e) Unexpired insurance remaining at the end of the month,$9.

After all of the account balances have been extended to the Income Statement columns of the work sheet,the totals of the Debit and Credit columns are $77,500 and $83,900,respectively.What is the amount of the net income or net loss for the period?

After the accounts have been adjusted at January 31,the end of the year,the following balances are taken from the ledger of Harrison's Dog Walking Service Company:​ Journalize the four entries required to close the accounts

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

Of the following steps of the accounting cycle,which step should be completed first?

Accrued fees earned are recorded during the adjusting process.The reversing entry will leave a debit balance in Fees Earned as of the first day of the next period.

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

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

Daniel'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?