Question 1

Which of the following is true of a completed worksheet?
A)The total debits in the trial balance column equal the total debits in the adjusted trial balance column.
B)The total debits in the income statement column equal the total credits in the balance sheet column.
C)The total debits in the income statement column equal the total debits in the balance sheet column.
D)The total debits equal the total credits in each column.

Accepted Answer

A completed worksheet should have the total debits equal to the total credits in each column. This ensures that the accounting equation of assets = liabilities + equity is balanced and that there are no mathematical errors in the worksheet. The other statements are not necessarily true for a completed worksheet.

Question 2

Where does Net Income appear on a worksheet?
A)Net income appears only in the income statement debit column.
B)Net income appears in the balance sheet credit column and in the income statement debit column.
C)Net income appears in the income statement credit column and in the balance sheet debit column.
D)Net income appears only in the balance sheet credit column.

Accepted Answer

The answer of Where does Net Income appear on a...

Question 3

The Interest Expense in the worksheet's unadjusted trial balance column is $3,000. Interest Expense in the income statement column is $7,000. Which of the following entries would have caused this difference?
A)A $7,000 credit to Interest Expense in the worksheet's adjustments column
B)A $7,000 credit to Interest Payable in the worksheet's adjustments column
C)A $4,000 debit to Interest Expense in the worksheet's adjustments column
D)A $4,000 credit to Interest Expense in the worksheet's adjustments column

Accepted Answer

The difference between the unadjusted trial balance column and the income statement column for Interest Expense is $4,000 ($7,000 - $3,000). This suggests that interest expenses of $4,000 were not recorded in the unadjusted trial balance column. Therefore, a debit of $4,000 to Interest Expense in the worksheet's adjustments column would be required to correct the error. Option A and B do not explain the difference, and option D would make the difference wider. Hence, C is the correct choice.

Question 4

Which of the following statements is true of the worksheet?
A)The Net Income is recorded in the income statement credit column.
B)The Net Income is recorded in the adjusted trial balance debit column.
C)The Net Income is recorded in the income statement debit column.
D)The Net Income is recorded in the balance sheet debit column.

Accepted Answer

Net Income is recorded in the Income Statement debit column as it is a component of the Income Statement. It represents the company's total earnings or profits after deducting total expenses from total revenues.

Question 5

Permanent accounts are not closed at the end of the accounting period.

Accepted Answer

Permanent accounts, such as assets, liabilities, and equity, are not closed at the end of the accounting period because they carry over to the next period. Only temporary accounts, such as revenue and expense accounts, are closed at the end of the period.

Question 6

Which of the following accounts would appear in the income statement credit column?
A)Service Revenue
B)Prepaid Insurance
C)Unearned Service Revenue
D)Depreciation Expense

Accepted Answer

Service revenue is a type of revenue earned by a company and therefore it would appear in the income statement credit column. The other options, such as prepaid insurance, unearned service revenue, and depreciation expense, are not revenue accounts and would not be found in the income statement credit column.

Question 7

The worksheet helps accountants to:
A)make the adjusted trial balance.
B)prepare the financial statements.
C)prepare the unadjusted trial balance.
D)maintain books of accounts without a journal.

Accepted Answer

The worksheet is used to prepare the financial statements. It is not used to make the adjusted trial balance or prepare the unadjusted trial balance. While the use of a worksheet may aid in maintaining books of accounts, it is not a replacement for a journal.

Question 8

Which of the following statements is true of the worksheet?
A)The worksheet is a ledger.
B)The worksheet is a document used to summarize data to prepare the financial statements.
C)The worksheet is a financial statement issued to the public to communicate the financial results of the company.
D)The worksheet is a journal.

Accepted Answer

The worksheet is a document used to summarize data to prepare the financial statements. It is not a ledger, financial statement issued to the public or a journal.

Question 9

The following is the adjusted trial balance from the worksheet for Tuttle Photography.

Accepted Answer

The answer of The following is the adjusted trial balance...

Question 10

Which of the following statements is true if the income statement credit column exceeds the income statement debit column on a worksheet?
A)The company has a net income.
B)The company has a net loss.
C)The capital account decreased during the period.
D)The total liabilities exceed total assets.

Accepted Answer

When the credit column exceeds the debit column on an income statement, it means that the company has earned more revenue than it incurred expenses, resulting in a net income.

Question 11

Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet?
A)Rent Revenue
B)Insurance Expense
C)Salaries Payable
D)Equipment

Accepted Answer

Salaries Payable is a liability account and would appear in the credit column of the balance sheet. Rent Revenue and Insurance Expense are both income statement accounts, while Equipment is an asset account.

Question 12

In which of the columns of the worksheet would Net Income be found?
A)Under the trial balance credit column, the adjusted trial balance credit column and the balance sheet credit column
B)Under the trial balance debit column, the adjusted trial balance debit column and the balance sheet debit column
C)Under the balance sheet debit column and the income statement credit column
D)Under the balance sheet credit column and the income statement debit column

Accepted Answer

Net Income is a component of the Income Statement, so it would be found under the Income Statement debit column. It is also a part of owner's equity on the Balance Sheet, so it would be found under the Balance Sheet credit column. Therefore, the correct option is D, which includes both the Balance Sheet credit column and the Income Statement debit column.

Question 13

Which of the following accounts would appear in the income statement debit column?
A)Unearned Service Revenue
B)Service Revenue
C)Depreciation Expense
D)Prepaid Insurance

Accepted Answer

Depreciation Expense is an expense account and therefore has a debit balance, which appears in the income statement debit column. The other accounts listed are either revenue accounts (which have credit balances and appear in the income statement credit column) or asset accounts (which have debit balances but do not appear in the income statement at all).

Question 14

The closing process helps in measuring each period's net income separately from all other periods.

Accepted Answer

The closing process involves transferring the balances of temporary accounts (revenue, expenses, and dividends) to the retained earnings account to measure each period's net income separately from all other periods. This allows for accurate financial statements and analysis of the company's performance over time.

Question 15

In which of the columns of the worksheet would a net loss be found?
A)In the balance sheet credit column and the income statement debit column
B)In the balance sheet debit column and the income statement credit column
C)In the trial balance credit column, the adjusted trial balance credit column and the balance sheet credit column
D)In the trial balance debit column, the adjusted trial balance debit column and the balance sheet debit column

Accepted Answer

A net loss would be found in the income statement credit column (as expenses are debits and reduce net income) and the balance sheet debit column (as it reduces retained earnings, which is an equity account).

Question 16

Which of the following accounts would appear in the balance sheet debit column?
A)Unearned Service Revenue
B)Accumulated Depreciation
C)Service Revenue
D)Prepaid Insurance

Accepted Answer

Prepaid Insurance is an asset account and would appear in the balance sheet debit column.

Question 17

Which of the following statements is true if the income statement debit column exceeds the income statement credit column on a worksheet?
A)The company has a net loss.
B)The capital account increased during the period.
C)The company has net income.
D)The liabilities are greater than assets.

Accepted Answer

If the income statement debit column (which includes expenses) exceeds the income statement credit column (which includes revenues), the company has incurred a net loss. This means that the expenses were greater than the revenues earned during the period.

Question 18

Which of the following accounts would appear in the balance sheet credit column?
A)Prepaid Insurance
B)Buildings
C)Unearned Service Revenue
D)Service Revenue

Accepted Answer

Unearned Service Revenue is a liability account and appears in the balance sheet credit column.

Question 19

The Prepaid Rent in the worksheet's unadjusted trial balance column is $4,000. Prepaid Rent in the balance sheet column is $2,000. Which of the following entries would have caused this difference?
A)A $2,000 debit entry to Prepaid Rent in the worksheet's adjustments column
B)A $2,000 credit entry to Rent Expense in the worksheet's adjustments column
C)A $2,000 credit entry to Prepaid Rent in the worksheet's adjustments column
D)A $2,000 debit entry to Cash in the worksheet's adjustments column

Accepted Answer

The difference between the unadjusted trial balance and the balance sheet column for Prepaid Rent is $2,000 ($4,000 - $2,000 = $2,000). This means that $2,000 of Prepaid Rent was used up during the period and needs to be recorded as an expense. To do this, a credit entry of $2,000 to Prepaid Rent would be made in the adjustments column of the worksheet, which would also require a corresponding debit entry to Rent Expense. Choice A and D do not address the issue of the difference in Prepaid Rent, and Choice B suggests crediting Rent Expense instead of Prepaid Rent, which would not properly reflect the usage of the prepaid rent during the period.

Question 20

The adjusting process zeroes out all revenues and all expenses.

Accepted Answer

The adjusting process does not zero out all revenues and expenses. It is used to ensure that the financial statements reflect accurate and up-to-date information by reconciling any discrepancies between the recorded transactions and the actual financial position of the company. This may result in some revenues and expenses being adjusted, but not necessarily all of them.

Quiz 4: Completing the Accounting Cycle

Which of the following is true of a completed worksheet?

Where does Net Income appear on a worksheet?

The Interest Expense in the worksheet's unadjusted trial balance column is $3,000. Interest Expense in the income statement column is $7,000. Which of the following entries would have caused this difference?

Which of the following statements is true of the worksheet?

Permanent accounts are not closed at the end of the accounting period.

Which of the following accounts would appear in the income statement credit column?

The worksheet helps accountants to:

Which of the following statements is true of the worksheet?

The following is the adjusted trial balance from the worksheet for Tuttle Photography.

Which of the following statements is true if the income statement credit column exceeds the income statement debit column on a worksheet?

Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet?

In which of the columns of the worksheet would Net Income be found?

Which of the following accounts would appear in the income statement debit column?

The closing process helps in measuring each period's net income separately from all other periods.

In which of the columns of the worksheet would a net loss be found?

Which of the following accounts would appear in the balance sheet debit column?

Which of the following statements is true if the income statement debit column exceeds the income statement credit column on a worksheet?

Which of the following accounts would appear in the balance sheet credit column?

The Prepaid Rent in the worksheet's unadjusted trial balance column is $4,000. Prepaid Rent in the balance sheet column is $2,000. Which of the following entries would have caused this difference?

The adjusting process zeroes out all revenues and all expenses.