Chapter 4—Completing the Accounting Cycle
11. Which of the items below would appear in the Income Statement columns of the work sheet?
a. Equipment b. Unearned Fees c. Prepaid Expense d. Net Loss
ANS: D
DIF: 2 OBJ: 02
12. Which of the accounts below would appear in the balance sheet columns of the worksheet?
a. Rent Earned
b. Bill Jones, Drawing c. Unearned Revenue d. Both b and c
ANS: D DIF: 2 OBJ: 02
13. Which of the accounts below would appear in the Balance Sheet columns of the work sheet?
a. Service Revenue b. Prepaid Rent c. Supplies Expense d. None of the Above
ANS: B DIF: 3 OBJ: 02
14. The work sheet at the end of September has $4,000 in the Balance Sheet credit column for
Accumulated Depreciation. The work sheet at the end of October has $4,750 in the Balance Sheet credit column for Accumulated Depreciation. What was the amount of the depreciation expense adjustment for the month of October? a. amount can not be determined b. $4,750 c. $4,000 d. $750
ANS: D DIF: 3 OBJ: 02
15. Which of the items below does not appear on the work sheet?
a. adjusting entries
b. the unadjusted trial balance c. closing entries
d. the drawing account
ANS: C
DIF: 2 OBJ: 02
16. An indication that the work sheet columns are in balance and the work sheet is completed is
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Chapter 4—Completing the Accounting Cycle
a. b. c. d.
the word \each pair of columns is double underlined each pair of columns has the totals circled the final figures are written in ink
ANS: B DIF: 2 OBJ: 02
17. 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 are $25,250 and $21,825, respectively. What is the amount of net income or net loss for the period? a. $3,425 net income b. $25,250 net loss c. $3,425 net loss d. $21,825 net income
ANS: A DIF: 2 OBJ: 02
18. 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 $87,500 and $98,300, respectively. What is the amount of the net income or net loss for the period? a. $10,800 net income b. $10,800 net loss c. $98,300 net income d. $87,500 net loss
ANS: A DIF: 2 OBJ: 02
19. On October 1, the company pays rent for twelve months in advance and debits an asset
account. At year end, the adjusting entry on the work sheet would a. increase an expense account b. decrease a liability account c. increase an asset account d. decrease an expense account
ANS: A DIF: 3 OBJ: 02
20. On August 1, a company collects revenue in advance for the next twelve months and credits a
liability account. The adjusting entry at year end on the work sheet would a. increase a liability account b. decrease an asset account c. decrease a revenue account d. decrease a liability account
ANS: D
DIF: 3 OBJ: 02
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Chapter 4—Completing the Accounting Cycle
21. When preparing the statement of owner's equity, the beginning capital balance can always be
found
a. in the Income Statement columns of the work sheet b. in the statement of cash flows c. in the general ledger
d. in the Balance Sheet columns of the work sheet
ANS: C DIF: 3 OBJ: 03
22. Accumulated Depreciation appears on the
a. balance sheet in the current assets section b. balance sheet in the fixed assets section
c. balance sheet in the long-term liabilities section d. income statement as an operating expense
ANS: B DIF: 2 OBJ: 03
23. Notes Receivable due in 345 days appear on the
a. balance sheet in the current assets section b. balance sheet in the fixed assets section
c. balance sheet in the current liabilities section d. income statement as an expense
ANS: A DIF: 2 OBJ: 03
24. Unearned Fees appear on the
a. balance sheet in the current assets section b. balance sheet as a current liability
c. balance sheet in the owner's equity section d. income statement as revenue
ANS: B DIF: 2 OBJ: 03
25. Which one of the fixed asset accounts listed below will not have a related contra asset
account?
a. Office Equipment b. Land
c. Delivery Equipment d. Building
ANS: B DIF: 1 OBJ: 03
26. Balance sheet accounts
a. represent amounts accumulated during a specific period of time b. are called real accounts
c. have zero balances after the closing entries have been posted d. are equal to assets and liabilities
ANS: B DIF: 3 OBJ: 03
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Chapter 4—Completing the Accounting Cycle
27. Prepaid insurance is reported on the balance sheet as a
a. current asset b. fixed asset c. current liability d. long-term liability
ANS: A DIF: 1 OBJ: 03
28. On which financial statement will Income Summary be shown?
a. Statement of Owner's Equity b. Balance Sheet c. Income Statement d. No financial statement
ANS: D DIF: 3 OBJ: 04
29. Adjusting entries are dated in the journal as of
a. the date they are actually journalized b. the last day of the accounting period c. the first day of the accounting period d. the middle of the accounting period
ANS: B DIF: 2 OBJ: 04
30. Adjusting entries
a. need not be journalized since they appear on the work sheet
b. need not be posted if the financial statements are prepared from the work sheet c. are not needed if reversing entries are prepared d. must be journalized and posted
ANS: D DIF: 2 OBJ: 04
31. Closing entries
a. need not be journalized if reversing entries are prepared
b. need not be posted if the financial statements are prepared from the work sheet c. are not needed if adjusting entries are prepared d. must be journalized and posted
ANS: D DIF: 2 OBJ: 04
32. Closing entries are dated in the journal as of
a. the date they are actually journalized, although they are generally prepared after the end of the accounting period
b. the last day of the accounting period, although they are actually journalized after the end of the accounting period
c. the first day of the accounting period, although they are actually journalized after the end of the accounting period
d. the first day of the subsequent accounting period
ANS: B
DIF: 2 OBJ: 04
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Chapter 4—Completing the Accounting Cycle
33. Which of the accounts below would be closed by making a debit to the account?
a. Unearned Revenue b. Fees Earned
c. Jeff Ritter, Drawing d. Rent Expense
ANS: B DIF: 2 OBJ: 04
34. Which of the following accounts should be closed to Income Summary at the end of the fiscal
year?
a. Supplies Expense
b. Accumulated Depreciation c. Prepaid Insurance d. Unearned Rent
ANS: A DIF: 2 OBJ: 04
35. Which of the following accounts will not be closed to Income Summary at the end of the
fiscal year?
a. Salaries Expense b. Fees Earned c. Unearned Rent
d. Depreciation Expense
ANS: C DIF: 2 OBJ: 04
36. Which of the following accounts will be closed to the Capital account at the end of the fiscal
year?
a. Rent Expense b. Fees Earned
c. Income Summary d. Depreciation Expense
ANS: C DIF: 2 OBJ: 04
37. The entry to close the appropriate insurance account at the end of the accounting period is
a. debit Income Summary; credit Prepaid Insurance b. debit Prepaid Insurance; credit Income Summary c. debit Insurance Expense; credit Income Summary d. debit Income Summary; credit Insurance Expense
ANS: D DIF: 3 OBJ: 04
38. Which of the following accounts ordinarily appears in the post-closing trial balance?
a. Bill Smith, Drawing b. Supplies Expense c. Fees Earned d. Unearned Rent
ANS: D
DIF: 2 OBJ: 04
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