Accounting

Q: Based on the adjusted trial balance, prepare a balance sheet for Martin Sky Taxi Services. MARTIN SKY TAXI SERVICES Adjusted Trial Balance For the year ended December 31 Cash $ 28,000 Accounts receivable 14,200 Office supplies 1,700 Airplanes 100,000 Accumulated depreciation Airplanes 45,000 Accounts payable 11,500 Common stock 25,000 Retained earnings 46,900 Dividends 40,000 Fees earned 150,000 Rent expense 13,000 Office supplies expense 2,000 Utilities expense 2,500 Depreciation Expense Airplanes 15,000 Salary expense 50,000 Fuel expense 12,000 Totals $278,400 $278,400

Q: Based on the adjusted trial balance, prepare a statement of retained earnings for Martin Sky Taxi Services. MARTIN SKY TAXI SERVICES Adjusted Trial Balance For the year ended December 31 Cash $ 28,000 Accounts receivable 14,200 Office supplies 1,700 Airplanes 100,000 Accumulated depreciation Airplanes 45,000 Accounts payable 11,500 Common stock 25,000 Retained earnings 46,900 Dividends 40,000 Fees earned 150,000 Rent expense 13,000 Office supplies expense 2,000 Utilities expense 2,500 Depreciation Expense Airplanes 15,000 Salary expense 50,000 Fuel expense 12,000 Totals $278,400 $278,400

Q: From the adjusted trial balance, prepare an income statement for Martin Sky Taxi Services. MARTIN SKY TAXI SERVICES Adjusted Trial Balance For the year ended December 31 Cash $ 28,000 Accounts receivable 14,200 Office supplies 1,700 Airplanes 100,000 Accumulated depreciation Airplanes 45,000 Accounts payable 11,500 Common stock 25,000 Retained earnings 46,900 Dividends 40,000 Fees earned 150,000 Rent expense 13,000 Office supplies expense 2,000 Utilities expense 2,500 Depreciation Expense Airplanes 15,000 Salary expense 50,000 Fuel expense 12,000 Totals $278,400 $278,400

Q: Prepare a balance sheet from the adjusted trial balance of Hanson Storage. HANSON STORAGE Adjusted Trial Balance December 31 Cash $ 3,050 Accounts receivable 400 Prepaid insurance 830 Office supplies 80 Office equipment 4,200 Accumulated depreciation office equipment $ 1,100 Buildings 98,000 Accumulated depreciation buildings 28,000 Land 115,000 Wages payable 880 Property taxes payable 1,400 Interest payable 2,200 Unearned rent 460 Long-term notes payable 150,000 Common stock 15,000 Retained earnings 25,340 Dividends 21,000 Rent earned 57,500 Wages expense 25,000 Utilities expense 1,900 Property taxes expense 2,400 Insurance expense 800 Office supplies expense 250 Depreciation expense office equipment 400 Depreciation expense buildings 5,570 Interest expense 3,000 Totals $281,880 $281,880

Q: Prepare a statement of retained earnings from the adjusted trial balance of Hanson Storage. HANSON STORAGE Adjusted Trial Balance December 31 Cash $ 3,050 Accounts receivable 400 Prepaid insurance 830 Office supplies 80 Office equipment 4,200 Accumulated depreciation office equipment $ 1,100 Buildings 98,000 Accumulated depreciation buildings 28,000 Land 115,000 Wages payable 880 Property taxes payable 1,400 Interest payable 2,200 Unearned rent 460 Long-term notes payable 150,000 Common stock 15,000 Retained earnings 25,340 Dividends 21,000 Rent earned 57,500 Wages expense 25,000 Utilities expense 1,900 Property taxes expense 2,400 Insurance expense 800 Office supplies expense 250 Depreciation expense office equipment 400 Depreciation expense buildings 5,570 Interest expense 3,000 Totals $281,880 $281,880

Q: Prepare an income statement from the adjusted trial balance of Hanson Storage. HANSON STORAGE Adjusted Trial Balance December 31 Cash $ 3,050 Accounts receivable 400 Prepaid insurance 830 Office supplies 80 Office equipment 4,200 Accumulated depreciation office equipment $ 1,100 Buildings 98,000 Accumulated depreciation buildings 28,000 Land 115,000 Wages payable 880 Property taxes payable 1,400 Interest payable 2,200 Unearned rent 460 Long-term notes payable 150,000 Common stock 15,000 Retained earnings 25,340 Dividends 21,000 Rent earned 57,500 Wages expense 25,000 Utilities expense 1,900 Property taxes expense 2,400 Insurance expense 800 Office supplies expense 250 Depreciation expense office equipment 400 Depreciation expense buildings 5,570 Interest expense 3,000 Totals $281,880 $281,880

Q: Use the following information to prepare the adjusted trial balance for Bella's Beauty Salon. Bellas Beauty Salon's unadjusted trial balance for the current year follows: BELLAS BEAUTY SALON Trial Balance December 31 Cash $ 4,200 Prepaid insurance 1,480 Shop supplies 990 Shop equipment 3,860 Accumulated depreciation shop equipment $ 770 Building 57,500 Accumulated depreciation building 3,840 Land 55,000 Unearned rent 1,600 Long-term notes payable 50,000 Common stock 10,000 Retained earnings 39,860 Rent earned 2,400 Fees earned 23,400 Wages expense 3,200 Utilities expense 690 Property taxes expense 600 Interest expense 4,350 Totals $131,870 $131,870 Additional information: a. An insurance policy examination showed $1,240 of expired insurance. b. An inventory count showed $210 of unused shop supplies still available. c. Depreciation expense on shop equipment, $350. d. Depreciation expense on the building, $2,220. e. A beautician is behind on space rental payments and this $200 of accrued revenue was unrecorded at the time the trial balance was prepared.. f. $800 of the Unearned Rent account balance was earned by year-end. g. The one employee, a receptionist, works a five-day workweek at $50 per day. The employee was paid last week but has worked four days this week for which she has not been paid. h. Three months' property taxes, totaling $450, have accrued. This additional amount of property taxes expense has not been recorded. i. One month's interest on the note payable, $600, has accrued but is unrecorded.

Q: Based on the following information, prepare the adjusting journal entries for Bella's Beauty Salon. Bellas Beauty Salon's unadjusted trial balance for the current year follows: BELLAS BEAUTY SALON Trial Balance December 31 Cash $ 4,200 Prepaid insurance 1,480 Shop supplies 990 Shop equipment 3,860 Accumulated depreciation shop equipment $ 770 Building 57,500 Accumulated depreciation building 3,840 Land 55,000 Unearned rent 1,600 Long-term notes payable 50,000 Common stock 10,000 Retained earnings 39,860 Rent earned 2,400 Fees earned 23,400 Wages expense 3,200 Utilities expense 690 Property taxes expense 600 Interest expense 4,350 Totals $131,870 $131,870 Additional information: a. An insurance policy examination showed $1,240 of expired insurance b. An inventory count showed $210 of unused shop supplies still available c. Depreciation expense on shop equipment, $350 d. Depreciation expense on the building, $2,220 e. A beautician is behind on space rental payments and this $200 of accrued revenue was unrecorded at the time the trial balance was prepared. f. $800 of the Unearned Rent account balance was earned by year-end. g. The one employee, a receptionist, works a five-day workweek at $50 per day. The employee was paid last week but has worked four days this week for which she has not been paid. h. Three months' property taxes, totaling $450, have accrued. This additional amount of property taxes expense has not been recorded. i. One month's interest on the note payable, $600, has accrued but is unrecorded.

Q: In general journal form, record the December 31 adjusting entries for the following transactions and events. Assume that December 31 is the end of the annual accounting period. a. The Prepaid Insurance account shows a debit balance of $2,340, representing the cost of a three-year fire insurance policy that was purchased on October 1 of the current year. b. The Office Supplies account has a debit balance of $400; a year-end inventory count reveals $80 of supplies still on hand. c. On November 1 of the current year, Rent Earned was credited for $1,500. This amount represented the rent earned for a three-month period beginning November 1. d. Estimated depreciation on office equipment is $600. e. Accrued salaries amount to $400.

Q: Black Company's unadjusted and adjusted trial balances on December 31 of the current year are as follows Unadjusted Trial Balance Adjusted Trial Balance Cash 4,000 4,000 Prepaid insurance 1,600 1,200 Equipment 9,000 9,000 Accumulated depreciation Equipment 900 1,800 Salaries payable 1,000 Unearned repair fees 2,500 600 Repair fees earned 10,000 11,900 Salaries expense 3,500 4,500 Depreciation expense Equip 900 Insurance expense 700 1,100 Common stock 5,000 5,000 Retained earnings 400 400 18,800 18,800 20,700 20,700 Present the four adjusting journal entries that were recorded by Black Company.

Q: The following unadjusted and adjusted trial balances were taken from the current year's accounting system for High Point, Inc. HIGH POINT, INC. Trial Balances For Year Ended December 31 Unadjusted Trial Balance Adjusted Trial Balance Debit Credit Debit Credit Cash 11,300 11,300 Accounts receivable 16,340 17,140 Office supplies 1,045 645 Prepaid advertising 1,100 450 Building 26,700 26,700 Accumulated depreciation -- Building 1,300 6,300 Accounts payable 3,320 3,500 Unearned services revenue 4,410 3,010 Common stock 10,000 10,000 Retained earnings 7,905 7,905 Services revenue 72,400 74,600 Salaries expense 34,500 34,500 Utilities expense 5,450 5,630 Advertising expense 2,900 3,550 Supplies expense 400 Depreciation expense building 5,000 Totals 99,335 99,335 105,315 105,315 In general journal form, present the six adjusting entries that explain the changes in the account balances from the unadjusted to the adjusted trial balance.

Q: During the current year ended December 31, clients paid fees in advance for accounting services amounting to $25,000. These fees were recorded in an account called Unearned Accounting Fees. If $3,500 of these fees are still unearned on December 31 of this year, prepare the December 31 adjusting entry .

Q: Western Company had $500 of store supplies available at the beginning of the current year. During the year Western Company purchased $2,750 worth of store supplies. On December 31 of this year, $375 worth of store supplies remained. a. Calculate the amount of Western Company's store supplies expense for the current year. (Show your calculations.) b. Prepare the journal entry to adjust the supplies account.

Q: Show the December 31 adjusting entry to record $750 of earned but unpaid salaries of employees at the end of the current accounting period.

Q: Compute the missing amounts: (1) The Prepaid Insurance account had a $455 debit balance at the beginning of the current year; $650 of insurance premiums were paid during the year; and the year-end balance sheet showed $420 of prepaid insurance; consequently, the income statement for the year must have shown $______________ of insurance expense. (2) The Office Supplies account began the current year with a $235 debit balance; the income statement for the year showed $475 of office supplies expense; and the year-end balance sheet showed the current asset, office supplies, at $225; consequently, if all supplies were accounted for, $____________ of office supplies must have been purchased during the year.

Q: Day Co. leases an office to a tenant at the rate of $5,000 per month. The tenant contacted Day and arranged to pay the rent for December 2014 on January 8, 2015. Day agrees to this arrangement. a. Prepare the journal entry that Day must make at December 31, 2014, to record the accrued rental revenue. b. Prepare the journal entry to record the receipt of the rent on January 8, 2015.

Q: An asset that cost $50,000 was purchased on January 1. The asset has an estimated useful life of three years and an estimated salvage value of $3,200. Using the straight-line method, prepare the necessary adjusting journal entry for the end of the year.

Q: July 31, 2013, the end of the quarter is on a Wednesday. Employees get paid each Friday for the week worked. Abel Co. has five employees who earn $100 per day each. Assuming the proper adjusting journal entry was made on June 30, prepare the journal entry to record the payment of wages on August 2.

Q: July 31, 2013, the end of the quarter is on a Wednesday. Employees get paid each Friday for the week worked. Abel Co. has five employees who earn $100 per day each. Make the necessary adjusting journal entry for June 30.

Q: During the year, Able Co. purchased $39,600 worth of supplies, at the end of the year, the balance sheet showed a balance of $1,760 in the Supplies account. Prepare the necessary adjusting entry.

Q: During the year, Able Co. purchased $23,750 worth of supplies, at the end of the year, the supplies expense on the adjusted trial balance was $29,340 and the balance sheet showed a balance of $810 in the supplies account. What was the supplies balance at the beginning of the year?

Q: On December 31, Connelly Company had performed $5,000 of management services for clients that had not yet been billed. Prepare Connelly's adjusting entry to record these fees earned.

Q: On December 14 Bench Company received $3,700 cash for consulting services that will be performed in January. Bench records all such prepayments in a liability account. Prepare a general journal entry to record the $3,700 cash receipt.

Q: Calculate the current ratio in each of the following separate cases. Current Assets Current Liabilities Case 1 $ 75,000 $ 30,000 Case 2 $161,500 $ 85,000 Case 3 $ 45,000 $ 53,000 Case 4 $132,000 $127,000 Case 5 $ 99,000 $110,000

Q: The following information is available for the Wooden Company: 2013 2012 2011 Net income $ 2,630 $ 2,100 $ 1,850 Net sales 36,500 32,850 31,200 Total assets 400,000 385,000 350,000 From the information provided, calculate Wooden's profit margin ratio for each of the three years. Comment on the results, assuming that the industry average for the profit margin ratio is 6% for each of the three years.

Q: Using the following table indicate the impact of the following errors made during the adjusting entry process. Use a "+" for overstatements, a "-" for understatements and a "0" for no effect. The first one is provided as an example: Error Revenues Expenses Assets Liabilities Equity Ex. Did not record depreciation for this period 0 - + 0 + 1. Did not record unpaid utility bill 2. Did not adjust unearned revenue account for revenue earned this period. 3. Did not adjust office supplies for supplies used this period. 4. Did not accrue employees wages for this period. 5. Recorded rent expense with a debit to salary expense and a credit to rent payable.

Q: On December 31, 2012, a company forgot to record $7,000 of depreciation on office equipment. What would be the effect on the assets, net income, and equity when it comes to the 2012 financial statements?

Q: The calendar year-end adjusted trial balance for Acosta Co. follows: ACOSTA CO. Adjusted Trial Balance December 31 Cash $ 100,000 Accounts receivable 7,000 Prepaid rent 15,000 Prepaid Insurance 9,000 Office supplies 3,300 Office equipment 8,000 Accumulated depreciation Equipment $ 3,200 Building 350,000 Accumulated depreciation Building 42,000 Land 700,000 Accounts payable 5,800 Salaries payable 14,500 Interest payable 2,500 Long-term note payable 52,000 Common stock 50,000 Retained earnings 960,000 Dividends 200,500 Service fees earned 370,800 Salaries expense 90,000 Insurance expense 5,200 Rent expense 5,000 Depreciation expense Equipment 800 Depreciation expense Building 7,000 Totals $1,500,800 $1,500,800 Required: a. Prepare a classified year-end balance sheet. (Note: A $7,000 installment on the long-term note payable is due within one year.) b. Calculate the current ratio.

Q: Based on the adjusted trial balance shown below, prepare a classified balance sheet for Focus Package Delivery. FOCUS PACKAGE DELIVERY Adjusted Trial Balance December 31 Debit Credit Cash 18,200 Accounts receivable 34,200 Supplies 2,100 Long-term investments 25,000 Delivery equipment 45,000 Accumulated depreciation Delivery equipment 11,080 Intangible assets 16,000 Accounts payable 16,200 Wages payable 4,120 Long-term notes payable* 20,000 Common stock 10,000 Retained earnings 30,400 Dividends 15,000 Delivery fees earned 145,000 Rent expense 8,000 Wages expense 62,000 Supplies expense 2,500 Depreciation expense Delivery equipment 4,050 Interest expense 1,000 Utilities expense 3,750 ______ Totals 236,800 236,800 * $2,000 of the long-term note payable is due during the next year.

Q: The following are the steps in the accounting cycle. List them in the order in which they are completed: Prepare adjusted trial balance. Post transactions. Prepare an unadjusted trial balance. Journalize transactions. Prepare the financial statements. Close the temporary accounts. Adjust the ledger accounts. Prepare a post-closing trial balance. Analyze transactions.

Q: Listed below are a number of accounts. Use the table below to classify each account. Indicate whether it is a temporary or permanent account, whether it is included in the income statement or balance sheet, and if it is closed at the end of the accounting period and, if so, how it is closed. The first one is done as an example. Account Permanent (P) or Temporary (T) Income Statement (IS) or Balance Sheet (BS) Closed (C) or Not Closed (NC) Closed with a Debit (D) or Credit (CR) a. Accounts payable P BS NC b. Accounts receivable c. Accumulated depreciation. Equipment d. Advertising expense e. Cash f. Unearned revenues g. Depreciation expense Equipment h. Dividends i. Equipment j. Insurance expense k. Interest expense l. Miscellaneous expense m. Notes payable n. Office supplies o. Office supplies expense p. Prepaid expense q. Rent expense r. Common stock s. Salaries expense t. Salaries payable u. Revenue

Q: What are some of the steps that Ashley Cook and Danielle Danker took to control ash&dans.com costs?

Q: Describe a worksheet and explain why it is useful.

Q: Describe the two alternate methods used to account for prepaid expenses.

Q: What is the usual order in which financial statements are prepared from the adjusted trial balance? Why are they prepared in that order?

Q: What are the types of adjusting entries used for prepaid expenses, depreciation, and unearned revenues?

Q: Describe the types of entries required in later periods that result from accruals.

Q: How is the current ratio calculated? How is it used to evaluate a company?

Q: How is the profit margin calculated? Discuss its use in analyzing a company's performance.

Q: Explain how accounting adjustments affect financial statements.

Q: How is a classified balance sheet different from an unclassified balance sheet? List the order of the usual classifications on a classified balance sheet.

Q: Identify the differences between accrual accounting and cash basis accounting.

Q: Discuss the importance of periodic reporting and the time period assumption.

Q: Match the following types of accounts with each of the following transactions. 1. Used to record revenue earned but not received. Accrued expense 2. Used to record wages owed, but not paid. Accrued revenue 3. Used to record expiration of prepaid insurance. Prepaid expense 4. Used to record revenue received in advance. Unearned revenue

Q: Classified balance sheets commonly include the following categories. Indicate the typical classification of each item listed below by placing the correct balance sheet category in the blank space next to the item. 1. Prepaid insurance Plant assets 2. Common stock Equity 3. Buildings used in business operations Investments 4. Wages payable Long-term liabilities 5. Accounts payable Current assets 6. Retained earnings Equity 7. Current portion of long-term debt Current liabilities 8. Land held for future plant expansion Current liabilities 9. Cash Intangible assets 10. Long-term note payable Current liabilities 11. Accounts receivable Current assets 12. Patents Current assets

Q: Match the following terms with the appropriate definition: 1. Statements that show the effects of proposed transactions as if the transactions had already occurred. Working papers 2. Entries recorded at the end of each accounting period to transfer end-of-period balances in revenue, expense and dividends accounts to retained earnings. Operating cycle 3. A spreadsheet used to draft an unadjusted trial balance, adjusting entries, adjusted trial balance and financial statements. Income summary 4. The time span from when cash is used to acquire goods and services until cash is received from the sale of those goods and services. Work sheet 5. Accounts that are used to record transactions and events for one accounting period only; they include revenues, expenses and dividends. Post-closing trial balance 6. Accounts that reflect on activities related to one or more future periods; they include all balance sheet accounts. Accounting cycle 7. Recurring steps performed each accounting period, starting with analyzing and recording of transactions in the journal and continuing through the post-closing trial balance. Closing entries 8. Analyses and other informal reports prepared by accountants when organizing the information presented in reports and financial statements. Pro forma 9. A list of permanent accounts and their balances from the ledger after all closing entries are journalized and posted. Permanent accounts 10. A temporary account used only in the closing process and to where the balances of revenue and expense accounts are transferred. Temporary accounts Blooms Taxonomy: Remember

Q: Match the following terms with the appropriate definition: 1. The expense created by allocating the cost of plant and equipment to the periods in which they are used. PrMatch the following terms with the appropriate definition:epaid expenses 2. The principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses. Revenue recognition principle 3. Items paid for in advance of receiving their benefits. Time period assumption 4. Requires that revenue be recorded when earned. Matching principle 5. The accounting system that recognizes revenues when earned and expenses when incurred. Accrual basis accounting 6. A principle that assumes that an organization's activities can be divided into specific time periods such as months, quarters or years. Depreciation 7. Revenues earned in a period that are both unrecorded and not yet received in cash or other assets. Accrued revenues 8. Net income divided by net sales. Cash basis accounting 9. The accounting system where revenues are recognized when cash is received and expenses are recorded when cash is paid. Profit margin

Q: Based on the following information, determine the current assets, assuming all accounts have a normal balance? Cash $6,754 Dividends $2,000 Accounts receivable 13,733 Consulting fees earned 13,718 Office supplies 2,625 Rent expense 3,673 Land 37,153 Salaries expense 6,642 Office equipment 14,535 Telephone expense 560 Accounts payable 6,463 Miscellaneous expense 280 Common stock 54,490 Retained earnings ? A. $74,800 B. $37,647 C. $60,265 D. $23,112 E. $60,953

Q: Based on the following information, determine the current ratio, assuming all accounts have a normal balance? Cash $6,754 Dividends $2,000 Accounts receivable 13,733 Consulting fees earned 13,718 Office supplies 2,625 Rent expense 3,673 Land 37,153 Salaries expense 6,642 Office equipment 14,535 Telephone expense 560 Accounts payable 6,463 Miscellaneous expense 280 Common stock 54,490 Retained earnings ? A. 1.23 B. 3.58 C. 11.57 D. 12.3 E. 1.57

Q: Based on the following information, what would be the ending balance in the Retained Earnings account, assuming all accounts have a normal balance? Cash $6,754 Dividends $2,000 Accounts receivable 13,733 Consulting fees earned 13,718 Office supplies 2,625 Rent expense 3,673 Land 37,153 Salaries expense 6,642 Office equipment 14,535 Telephone expense 560 Accounts payable 6,463 Miscellaneous expense 280 Common stock 54,490 Retained earnings ? A. $15,847 B. $13,718 C. $13,155 D. $13,284 E. $13,847

Q: Based on the following information, what would be the balance in the Retained Earnings Account, assuming all accounts have a normal balance? Cash $6,754 Dividends $2,000 Accounts receivable 13,733 Consulting fees earned 13,718 Office supplies 2,625 Rent expense 3,673 Land 37,153 Salaries expense 6,642 Office equipment 14,535 Telephone expense 560 Accounts payable 6,463 Miscellaneous expense 280 Common stock 54,490 Retained earnings ? A. $0 B. $13,718 C. $13,155 D. $13,284 E. $2,563

Q: Based on the following information, what would be the total on the Credit side of a post- closing trial balance, assuming all accounts have a normal balance? Cash $6,754 Dividends $2,000 Accounts receivable 13,733 Consulting fees earned 13,718 Office supplies 2,625 Rent expense 3,673 Land 37,153 Salaries expense 6,642 Office equipment 14,535 Telephone expense 560 Accounts payable 6,463 Miscellaneous expense 280 Common stock 54,490 Retained Earnings ? A. $61,516 B. $74,671 C. $74,800 D. $87,955 E. $81,263

Q: A company had revenue of $550,000, rent expense of $100,000, utility expense of $10,000, salary expense of $125,500, depreciation expense of $39,000, advertising expense of $40,200, dividends in the amount of $183,000, and an ending balance in retained earnings of $402,300. What is the appropriate journal entry to close income summary? A. Income Summary.$235,300 Retained Earnings..$235,300 B. Retained Earnings$235,300 Income Summary..$235,300 C. Income Summary.$52,300 Retained Earnings..$52,300. D. Retained Earnings.$52,300 Income Summary...$52,300 E. Income Summary...$314,700 Retained Earnings$314,700

Q: A company had service revenue of $250,000, rent expense of $10,000, utility expense of $3,500, salary expense of $18,500, depreciation expense of $9,000, advertising expense of $4,500, dividends in the amount of $18,000, and a beginning balance in retained earnings of $17,900. What is the balance in the income summary account before it is closed for the period? A. $250,000 B. $45,500 C. $204,500 D. $222,400 E. $232,100

Q: On January 1, Able Company purchased equipment costing $135,000 with an estimated salvage value of $10,500, and an estimated useful life of five years. Using the straight-line method, what is the amount that should be recorded as depreciation on December 31? A. $27,000 B. $24,900 C. $29,100 D. $135,000 E. $10,500

Q: Debit Credit Balance $84,000 $84,000 1. Supplies Expense $1,200 Supplies (1,200) 2. Rent Expense 700 Prepaid rent (700) 3. Salaries Expense 500 Salaries payable 500 4. Depr. Expense 800 Accum. Depr 800 5. Accts. Receivable 400 Fees earned _______ Adjusted total

Q: The Unadjusted Trial Balance columns of a work sheet total $84,000. The Adjustments columns contain entries for the following: Office supplies used during the period, $1,200. Expiration of prepaid rent, $700. Accrued salaries expense, $500. Depreciation expense, $800. Accrued service fees receivable, $400. The Adjusted Trial Balance columns total is: A. $80,400 B. $84,000 C. $85,700 D. $85,900 E. $87,600

Q: Which of the following errors would cause the Balance Sheet columns of a work sheet to be out of balance? A. Entering an asset amount in the Income Statement Debit column. B. Entering a liability amount in the Income Statement Credit column. C. Entering an expense amount in the Balance Sheet Debit column. D. Entering a revenue amount in the Balance Sheet Debit column. E. Entering a liability amount in the Balance Sheet Credit column.

Q: The following items appeared on a company's December 31 work sheet for the current period. Based on the following information, what is net income for the current period? Unadjusted Trial Balance Adjustments Debit Credit Debit Credit Cash 975 Prepaid insurance 3,600 150 Supplies 180 70 Equipment 10,320 Accounts payable 1,140 Unearned fees 4,500 375 Common stock 5,000 Retained earnings 4,180 Dividends 1,650 Fees earned 5,850 375 300 Rent expense 1,200 Salaries expense 2,400 315 Utilities expense 345 _____ Insurance expense 150 Supplies expense 70 Depreciation expense equipment 190 Accumulated depreciation equipment 190 Salaries payable 315 Accounts receivable 300 _____ Totals 20,670 20,670 1,400 1,400 A. $1,400 B. $1,855 C. $1,905 D. $2,060 E. $4,670

Q: Statements that show the effects of proposed transactions as if the transactions had already occurred are called: A. Pro forma statements B. Professional statements C. Simplified statements D. Temporary statements E. Interim statements

Q: A company shows a $600 balance in prepaid insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $200. This adjusting entry results in: A. $200 less in net income. B. $200 more in net income. C. $200 difference between the debit and credit columns of the unadjusted trial balance. D. $200 of prepaid insurance. E. An error in the financial statements.

Q: Accumulated depreciation, accounts receivable, and service fees earned would be sorted to which respective columns in completing a work sheet? A. Balance Sheet-Credit; Balance Sheet Debit; and Income Statement-Credit. B. Balance Sheet-Debit; Balance Sheet; and Income Statement-Credit. C. Income Statement-Debit; Balance Sheet-Debit; and Income Statement-Credit. D. Income Statement-Debit; Income Statement-Debit; and Balance Sheet-Credit. E. Balance Sheet-Credit; Income Statement-Debit; and Income Statement-Credit.

Q: A 10-column spreadsheet used to draft a company's unadjusted trial balance, adjusting entries, adjusted trial balance, and financial statements and which is an optional tool in the accounting process is a(n): A. Adjusted trial balance B. Work sheet C. Post-closing trial balance D. Unadjusted trial balance E. General ledger

Q: The Unadjusted Trial Balance columns of a company's work sheet show the balance in the Office Supplies account as $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 of the work sheet is: A. $325 debit B. $325 credit C. $425 debit D. $750 debit E. $750 credit

Q: The alternative method of accounting for prepayments A. Initially records all prepaid expenses with debits to expense accounts. B. Initially records all prepaid expenses with credits to expense accounts. C. Requires an adjusting entry because expenses are understated. D. Requires an adjusting entry if the prepaid is consumed during the period. E. Requires an adjusting entry because net income is understated.

Q: Under the alternative method for recording prepaid expenses, which is the correct set of journal entries? Initial Entry Adjusting Entry A. Insurance Expense Prepaid Insurance Cash Insurance Expense B. Cash Prepaid Insurance Insurance Expense Insurance Expense C. Prepaid Expense Prepaid Insurance Cash Insurance Expense D. Prepaid Expense Insurance Expense Cash Prepaid Insurance E. Prepaid Expense Cash Insurance Expense Prepaid Insurance A. Option A B. Option B C. Option C D. Option D E. Option E

Q: Under the alternative method for accounting for unearned revenues, which of the following pairs of journal entry formats is correct? Initial Entry Adjusting Entry A. Cash Unearned Consulting Revenue Unearned Consulting Revenue Consulting Revenue B. Cash Consulting Revenue Consulting Revenue Unearned Revenue C. Cash Unearned Revenue Unearned Revenue Cash D. Consulting Revenue Unearned Revenue Cash Consulting Revenue E. Cash Consulting Revenue Unearned Revenue Unearned Revenue A. Option A B. Option B C. Option C D. Option D E. Option E

Q: Which of the following statements is true? A. Retained earnings must be closed each accounting period. B. A post-closing trial balance should include only permanent accounts. C. Information on the work sheet can be used in place of preparing financial statements. D. By using a work sheet to prepare adjusting entries, you need not post these entries to the ledger accounts E. Closing entries are only necessary if errors have been made.

Q: A post-closing trial balance includes: A. All ledger accounts with balances, none of which can be temporary accounts. B. All ledger accounts with balances, none of which can be permanent accounts. C. All ledger accounts with balances, which include some temporary and some permanent accounts. D. Only revenue and expense accounts. E. Only asset accounts.

Q: An error is indicated if the following account has a balance appearing on the post-closing trial balance: A. Office Equipment B. Accumulated Depreciation-Office Equipment C. Depreciation Expense-Office Equipment D. Common Stock E. Salaries Payable

Q: A trial balance prepared after the closing entries have been journalized and posted is the: A. Unadjusted trial balance B. Post-closing trial balance C. General ledger D. Adjusted trial balance E. Work sheet

Q: A company's ledger accounts and their end-of-period balances before closing entries are posted are shown below. What amount will be posted to Retained Earnings in the process of closing the Income Summary account? (Assume all accounts have normal balances.) Retained earnings $ 7,000 Dividends 9,600 Service Revenue 29,000 Rent expense 3,600 Salaries expense 7,200 Insurance expense 920 Depr. Expense equipment 500 Accum depr. equipment 1,500 A. $16,780 debit B. $7,180 credit C. $16,780 credit D. $18,280 credit E. $23,780 credit

Q: The Income Summary account is used: A. To adjust and update asset and liability accounts. B. To close the revenue and expense accounts. C. To determine the appropriate dividend amount. D. In some situations to replace the income statement. E. To replace the retained earnings account in some businesses.

Q: The Retained Earnings account has a credit balance of $17,000 before closing entries are made. If total revenues for the period are $55,200, total expenses are $39,800 and dividends are $9,000, what is the ending balance in the Retained Earnings account after all closing entries are made? A. $8,000 B. $15,400 C. $23,400 D. $17,000 E. $32,400

Q: The following information is available for the Travis Travel Agency. After the closing entries have been journalized and posted, what will be the balance in the Retained Earnings account? Total revenues $125,000 Total expenses 60,000 Retained earnings 80,000 Dividends 15,000 A. $65,000 B. $80,000 C. $130,000 D. $145,000 E. $280,000

Q: A company had revenues of $75,000 and expenses of $62,000 and paid $1,000 dividends during the accounting period. Which of the following entries could not be a closing entry for this company? A. Income Summary 13,000 Retained earnings 13,000 B. Income Summary 75,000 Revenues 75,000 C. Revenues 75,000 Income Summary 75,000 D. Income Summary 62,000 Expenses 62,000 E. Retained Earnings 1,000 Dividends 1,000

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