Chapter 4, Completing the Accounting Cycle Video Solutions, Accounting Principles , Tenth Edition

Problem 1

Which of the following statements is incorrect concerning the worksheet?
a. The worksheet is essentially a working tool of the accountant.
b. The worksheet is distributed to management and other interested partics.
c. The worksheet cannot be used as a basis for posting to ledger accounts.
d. Financial statements can be prepared directly from the worksheet before journalizing and posting the adjusting entries.

Oluwadamilola Ameobi

Numerade Educator

Problem 2

In a worksheet, net income is entered in the following columns:
a. income statement ( $\mathrm{Dr})$ and balance sheet (Dr).
b. income statement ( $\mathrm{Cr}$ ) and balance sheet (Dr).
c. income statement $(\mathrm{Dr})$ and balance sheet $(\mathrm{Cr})$.
d. income statement $(\mathrm{C} r)$ and belance sheet $(\mathrm{Cr})$.

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Problem 3

In the unadjusted trial balance of its worksheet for the year ended December 31, 2012, Taitum Company reported Equipment of $$\$ 120,000$$. The year-end adjusting entries require an adjustment of $$\$ 15,000$$ for depreciation expense for the equipment.After adjustment, the following adjusted amount should be reported:
a. A debit of $$\$ 105,000$$ for Equipment in the balance sheet column.
b. A credit of $$\$ 15,000$$ for Depreciation ExpenseEquipment in the income statement column.
c. A debit of $$\$ 120,000$$ for Equipment in the balance sheet column.
d. A debit of $$\$ 15,000$$ for Accumulated DepreciationEquipment in the balance sheet column.

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Problem 4

An account that will have a zero balance after closing entries have been journalized and posted is:
a. Service Revenue.
b. Supplies.
c. Prepaid Insurance.
d. Accumulated Depreciation-Equipment.

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Problem 5

When a net loss has occurred, Income Summary is:
a. debited and Owner's Capital is credited.
b. credited and Owner's Capital is debited.
c. debited and Owner's Drawings is credited.
d. credited and Owner's Drawings is debited.

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Problem 6

The closing process involves separate entries to close (1) expenses, (2) drawings, (3) revenues, and (4) income summary. The correct sequencing of the entries is:
a. (4), (3), (2), (1)
c. (3), (1), (4), (2)
b. (1), (2), (3), (4)
d. (3), (2), (1), (4)

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Problem 7

Which types of accounts will appear in the post-closing trial balance?
a. Permanent (real) accounts.
b. Temporary (nominal) accounts
c. Accounts shown in the income statement columns of a worksheet.
d. None of the above.

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Problem 8

All of the following are required steps in the accounting cycle except:
a. journalizing and posting closing entries.
b. preparing financial statements
c. journalizing the transactions.
d. preparing a worksheet.

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Problem 9

The proper order of the following steps in the accounting cycle is:
a. prepare unadjusted trial balance, journalize transactions post to ledger accounts, journalize and post adjusting entries.
b. journalize transactions, prepare unadjusted trial balance, post to ledger accounts, journalize and post adjusting entries.
c. journalize transactions, post to ledger accounts, prepare unadjusted trial balance, journalize and post adjusting entries
d. prepare unadjusted trial balance, journalize and post adjusting entries, journalize transactions, post to ledger accounts.

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02:01

Problem 10

When Alexander Company purchased supplies worth $$\$ 500$$, it incorrectly recorded a credit to Supplies for $$\$ 5,000$$ and a debit to Cash for $$\$ 5,000$$. Before correcting this error:
a. Cash is overstated and Supplies is overstated.
b. Cash is understated and Supplies is understated.
c. Cash is understated and Supplies is overstated.
d. Cash is overstated and Supplies is understated.

Jennifer Stoner

Numerade Educator

Problem 11

Cash of$$\$ 100$$ received at the time the service was provided was journalized and posted as a debit to Cash $$\$ 100$$ and a credit to Accounts Receivable $$\$100$$. Assuming the incodrect entry is not reversed, the correcting entry is:
a. debit Service Revenue $$\$ 100$$ and credit Accounts Receivable $$\$100$$.
b. debit Accounts Receivable $$\$ 100$$ and credit Service Revenue $$\$ 100$$
c. debit Cash $$\$ 100$$ and credit Service Revenue $$\$ 100$$.
d. debit Accounts Receivable $$\$ 100$$ and credit Cash $$\$ 100$$.

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Problem 12

The correct order of presentation in a classified balance sheet for the following current assets is:
a. accounts receivable, cash, prepaid insurance, inventory.
b. cash, inventory, accounts receivable, prepaid insurance.
c. cash, accounts receivable, inventory, prepaid insurance.
d. inventory, cash, accounts receivable, prepaid insurance.

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Problem 13

A company has purchased a tract of land. It expects to build a production plant on the land in approximately 5 years. During the 5 years before construction, the land will be idle. The land should be reported as:
a. property, plant, and equipment.
b. land expense.
c. a long-term investment.
d. an intangible asset.

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Problem 14

In a classified balance sheet, assets are usually classified using the following categories:
a. current assets; long-term assets; property, plant, and equipment; and intangible assets.
b. current assets; long-term investments; property, plant, and equipment; and tangible assets
c. current assets; long-term investments; tangible assets; and intangible assets
d. current assets; long-term investments; property, plant, and equipment; and intangible assets

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Problem 15

Current assets are listed:
a. by expected conversion to cash.
b. by importance.
c. by longevity.
d. alphabetically,

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Problem 16

On December 31, Frank Voris Company correctly made an adjusting eatry to recognize $\$ 2,000$ of accrued salaries payable. On January 8 of the next year, total salaries of $\$ 3,400$ were paid. Assuming the correct reversing entry was made on January 1, the entry on January 8 will result in a credit to Cash $\$ 3,400$ and the following debit(s):
a. Salaries and Wages Payable \$1,400, and Salaries and Wages Expense $\$ 2,000$.
b. Salaries and Wages Payable $\$ 2,000$ and Salaries and Wages Expense $\$ 1,400$.
c. Salaries and Wages Expense $\$ 3,400$.
d. Salaries and Wages Payable \$3,400.

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