FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 4: Completing the Accounting Cycle and Classifying Accounts

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

True/False

Review LaterAdd Note

Review Later

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

A) True
B) False

Correct Answer

verified

Show Answer

Question 42

Essay

Review LaterAdd Note

Review Later

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 in the closing process and, if so, how it is closed.

Correct Answer

verified

Show Answer

Question 43

True/False

Review LaterAdd Note

A work sheet is prepared before entering the adjustments in the accounts.

Closing revenue and expense accounts at the end of the accounting period serves to make the revenue and expense accounts ready for use in the next period.

Presented below are the year-end balances at October 31 of Max Missle Paintball Co. All accounts have normal balances. $\begin{array} { | l | r | } \hline \text { Accourts receivable } & \$ 5,000 \\\hline \text { Accourts payable } & 13,000 \\\hline \text { Accurnulated depreciation, equiprnent } & 15,000 \\\hline \text { Advertising expense } & 1,000 \\\hline \text { Cash } & 30,000 \\\hline \text { Depreciation experse, equiprnent } & 3,000 \\\hline \text { Insurance expense } & 1,000 \\\hline \text { frterest reverue } & 1,000 \\\hline \text { Laundry equipment } & 130,000 \\\hline \text { Notes payable } & 30,000 \\\hline \text { Max Missle, capital } & 47,500 \\\hline \text { Max Missle, withdrawals } & 5,000 \\\hline \text { Prepaid insurance } & 6,000 \\\hline \text { Salaries payable } & 2,000 \\\hline \text { Salary expense } & 4,000 \\\hline \text { Service revenue } & { 8 0 , 0 0 0 } \\\hline \text { Supplies } & 1,000 \\\hline \text { Supplies expense } & 100 \\\hline \text { Repair experse } & 500 \\\hline \text { Uneamed laurdry servicereveruse } & 100 \\\hline \text { Utilities experse } & 1,000 \\\hline\end{array}$ Prepare the necessary closing entries at October 31.

An expense account is normally closed by debiting Income Summary and crediting the expense account.

Which of the following statements is incorrect?

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

In order, the last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, preparing adjusting entries and preparing closing entries.

Discuss the purpose of a post-closing trial balance.

The accounting cycle refers to the steps in preparing the work sheet for users.

Asset, liability and revenue accounts are not closed as long as a company continues in business.

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) Non-current 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

Which of the following is the final step in the accounting cycle?

Reversing entries are

Another name for income summary accounts is

Reversing entries are optional.

For a partnership, the equity section is called Shareholders Equity.

After posting the entries to close all revenue accounts and all expense accounts, the Income Summary account of Waif Services has a $4,000 debit balance. This shows that Waif Services earned profit of $4,000.

The Income Summary account is a(n)