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Exam 3: Adjusting Accounts for Financial Statements

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Question 71

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

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The income statement is prepared first.T...

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Question 72

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The company has earned (but not recorded) $6,000 of interest relating to an investment for the year ended December 31,2014.A check for this amount will be received on January 9,2015.How would the company record the related adjusting entry dated December 31,2014?

A) Debit Cash for $6,000 and credit Interest Revenue for $6,000.
B) Debit Interest Receivable for $6,000 and credit Interest Revenue for $6,000.
C) Debit Interest Expense for $6,000 and credit Interest Revenue for $6,000.
D) Debit Cash for $6,000 and credit Interest Receivable for $6,000.
E) Debit Interest Revenue for $6,000 and credit Income Summary for $6,000.

F) C) and D)
G) None of the above

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Question 73

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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?

Prepare a balance sheet from the adjusted trial balance of Hanson Storage.

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

The first five steps in the accounting cycle include analyzing transactions,journalizing,posting,preparing an unadjusted trial balance,and recording adjusting entries.

The adjusted trial balance of Sara's Web Services follows: a.Prepare the closing entries for Sara's Web Services. b.What is the balance of the retained earnings account after the closing entries are posted?

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

Which of the following assets is not depreciated?

Adjustments must be entered in the journal and posted to the ledger after the work sheet is prepared.

A broad principle that requires identifying the activities of a business with specific time periods such as months,quarters,or years is the:

__________________________ is the process of allocating the cost of plant assets to their expected useful lives.

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.

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?

The ______________ refers to the steps in preparing financial statements for users.

Identify the differences between accrual accounting and cash basis accounting.

The matching principle and the full disclosure principle are the two main accounting principles used in accrual accounting.

Based on the adjusted trial balance,prepare a balance sheet for Martin Sky Taxi Services.

What is the current ratio based on the following information,assuming all accounts have a normal balance?

The Income Summary account is closed to the retained earnings account.