Question 1

Closing the temporary accounts at the end of each accounting period:

Accepted Answer

Closing the temporary accounts (revenue, expense, and withdrawals) serves to transfer their effects to the proper equity accounts on the balance sheet, prepares the withdrawals account for use in the next period, and gives the revenue and expense accounts zero balances. As a result, all of the answers are correct.

Question 2

Which of the following statements is incorrect?

Accepted Answer

The incorrect statement is D because on the work sheet, the accountant sorts the adjusted amounts into columns according to whether the accounts are used in preparing the income statement or the balance sheet, not the unadjusted trial balance or the adjusted trial balance.

Question 3

Another name for temporary accounts is:

Accepted Answer

Temporary accounts are also known as nominal accounts. These accounts are temporary because they are closed at the end of each accounting period and their balances are transferred to permanent accounts (real accounts) or zeroed out. Examples of temporary accounts include revenue, expenses, gains, and losses.

Question 4

The Unadjusted Trial Balance columns of the work sheet show the balance in the Office Supplies account at $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 is:

Accepted Answer

The amount shown in the Balance Sheet columns for Office Supplies would be $325 debit, calculated as the original balance of $750 minus the $425 of supplies used during the period. This reflects the remaining value of office supplies.

Question 5

The Unadjusted Trial Balance columns of a work sheet total $84,000.The Adjustments columns contain entries for the following: (1)Office supplies used during the period,$1,200.
(2)Expiration of prepaid rent,$700.
(3)Accrued salaries expense,$500.
(4)Depreciation expense,$800.
(5)Accrued repair service fees receivable,$400.
The Adjusted Trial Balance columns total:

Accepted Answer

The answer of The Unadjusted Trial Balance columns of a...

Question 6

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 step in the accounting process,is a(n):

Accepted Answer

A 10-column worksheet is used to draft a company's unadjusted trial balance, adjusting entries, adjusted trial balance, and financial statements. It is an optional step in the accounting process and is called a worksheet. Therefore, the correct choice is B - Worksheet.

Question 7

Accounts that are used to describe revenues,expenses,and owner's withdrawals,and are closed at the end of the reporting period,are:

Accepted Answer

Temporary accounts are used to describe revenues, expenses, and owner's withdrawals and are closed at the end of the reporting period, transferring their balances to a permanent account. Real accounts are asset, liability, and equity accounts that are not closed at the end of the reporting period. Closing accounts and permanent accounts are not accurate descriptions of these types of accounts. Ledger accounts are a general term for all accounts in the accounting system.

Question 8

A company shows an $800 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet.The Adjustments columns show expired insurance of $600.This adjusting entry results in:

Accepted Answer

The adjusting entry for expired insurance reduces the balance of Prepaid Insurance by $600, resulting in a new balance of $200 ($800 - $600). Since prepaid insurance is an asset, a decrease in its balance is a debit adjustment, which will reduce net income. Therefore, the $600 adjustment will result in $600 less net income.

Question 9

If the Balance Sheet columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet Credit column,the cause could be:

Accepted Answer

The answer of If the Balance Sheet columns of a...

Question 10

Real accounts are:

Accepted Answer

Real accounts are also known as permanent accounts, which means they are not closed at the end of each accounting period like temporary accounts. Real accounts include assets, liabilities, and owner's equity accounts, and they are reported on the balance sheet.

Question 11

The following items appeared on a December 31 Excel work sheet.Based on the following information,what is net income for the year?

Accepted Answer

The answer of The following items appeared on a December...

Question 12

Accounts that are used to describe assets,liabilities,and equity,that are not closed as long as the company continues to own the assets,owe the liabilities,or have equity,and whose balances appear on the balance sheet are called:

Accepted Answer

Permanent accounts are those that refer to assets, liabilities, and equity, and their balances are not closed at the end of a period. These accounts continue to appear on the balance sheet until the company owns the assets, owes liabilities, or has equity. Nominal accounts (A) and temporary accounts (B) are the same and refer to revenue, expense, and dividend accounts, whose balances are closed at the end of the period. Contra accounts (D) are accounts with balances opposite to the normal balance of the account and are used to offset the balance of another account. Accrued accounts (E) refer to revenues or expenses that have been earned/incurred but have not been recorded yet.

Question 13

Internal documents prepared by accountants when organizing the information presented in formal reports to internal and external decision makers are called:

Accepted Answer

Internal documents prepared by accountants when organizing the information presented in formal reports to internal and external decision makers are called working papers. Working papers are used to track financial information to ensure accuracy, provide documentation in case of audits or investigations, and assist in the preparation of financial statements.

Question 14

If,in preparing a work sheet,an adjusted trial balance amount is sorted to the wrong work sheet column,the Balance Sheet columns will balance on completing the work sheet,but with the wrong net income,if the amount sorted in error is:

Accepted Answer

The answer of If,in preparing a work sheet,an adjusted trial...

Question 15

Which of the following statements is incorrect?

Accepted Answer

Permanent accounts and real accounts are synonymous, while nominal accounts are temporary accounts.

Question 16

Accumulated Depreciation,Equipment,Accounts Receivable,and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

Accepted Answer

Accumulated Depreciation is a contra asset account and appears on the Balance Sheet-Credit. Equipment is an asset and appears on the Balance Sheet-Debit. Accounts Receivable is an asset and appears on the Balance Sheet-Debit. Service Fees Earned is a revenue account and appears on the Income Statement-Credit.

Question 17

Journal entries recorded at the end of each accounting period to prepare the revenue,expense,and withdrawals accounts for the upcoming year and to update the owner's capital account for the events of the year just finished are:

Accepted Answer

Closing entries are recorded at the end of each accounting period to close out the revenue, expense, and withdrawals accounts and update the owner's capital account. This process prepares the accounts for the upcoming year and ensures that the balances reflect the events of the year just finished. Adjusting entries are recorded during the accounting period to update the accounts for transactions that have not been recorded yet or to correct errors. Final entries and work sheet entries are not common accounting terms.

Question 18

The Income Summary account is:

Accepted Answer

All of the answers are correct. The Income Summary account is a temporary account used in the closing process to summarize the amounts of revenues and expenses and to determine the net income or loss for the period. The amount of the net income or loss is then transferred to the owners' capital accounts in a partnership, and the Income Summary account is closed out. The Income Summary account is not a permanent account, as it is only used at the end of an accounting period for the closing process.

Question 19

When closing entries are made:

Accepted Answer

Closing entries are made at the end of the fiscal period to transfer balances from temporary accounts (e.g. revenue, expense, and dividend accounts) to permanent accounts (e.g. retained earnings). As a result, choice B is the correct option where all temporary accounts are closed but not the permanent accounts.

Question 20

Which of the following errors would cause the balance sheet columns of a work sheet to be out of balance?

Accepted Answer

The answer of Which of the following errors would cause...

Quiz 4: Completing the Accounting Cycle and Classifying Accounts

Closing the temporary accounts at the end of each accounting period:

Which of the following statements is incorrect?

Another name for temporary accounts is:

The Unadjusted Trial Balance columns of the work sheet show the balance in the Office Supplies account at $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 is:

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 step in the accounting process,is a(n) :

Accounts that are used to describe revenues,expenses,and owner's withdrawals,and are closed at the end of the reporting period,are:

A company shows an $800 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet.The Adjustments columns show expired insurance of $600.This adjusting entry results in:

If the Balance Sheet columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet Credit column,the cause could be:

Real accounts are:

The following items appeared on a December 31 Excel work sheet.Based on the following information,what is net income for the year?

Accounts that are used to describe assets,liabilities,and equity,that are not closed as long as the company continues to own the assets,owe the liabilities,or have equity,and whose balances appear on the balance sheet are called:

Internal documents prepared by accountants when organizing the information presented in formal reports to internal and external decision makers are called:

If,in preparing a work sheet,an adjusted trial balance amount is sorted to the wrong work sheet column,the Balance Sheet columns will balance on completing the work sheet,but with the wrong net income,if the amount sorted in error is:

Which of the following statements is incorrect?

Accumulated Depreciation,Equipment,Accounts Receivable,and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

Journal entries recorded at the end of each accounting period to prepare the revenue,expense,and withdrawals accounts for the upcoming year and to update the owner's capital account for the events of the year just finished are:

The Income Summary account is:

When closing entries are made:

Which of the following errors would cause the balance sheet columns of a work sheet to be out of balance?