b. the depreciation expense account and a credit to the accumulated depreciation account D. Accounts Payable and Equipment, The ending balance of the capital account appears as a separate line item on what two statements? By mistake, the person who recorded the transaction debited Utilities Expense instead of Office Equipment. C. debit to Equipment for $500 and a credit to Cash for $500. The following are reasons to close the accounts at the end of the year except Two alternatives are being considered: Common stock may be sold to not 60 per share, or bonds yielding 12% may be issued The balance sheet and income statement of the Severn Company prior to financing are as follows: The Severn Company: Balance Sheet as of December 31 . B. MacGyver Company bought equipment on January 3, 2016, for $34,000. When pulling the owner's capital balance from the end-of-period spreadsheet into the statement of owner's equity, why is it also important to check the detail in the owner's capital account in the general ledger? Unearned Revenue, Prepaid advertising, representing payment for the next quarter, would be reported on the balance sheet as a(n), The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is, The account type and normal balance of Unearned Revenue is, Given the following Account Balances, the entry to close Capital during step one of the two step closing process would be a ______________. B. a $4,000 credit to Rent Expense. a. cash and crediting fees income Accumulated Depreciation, a contra asset, is found on the balance sheet. c. purchases journal On November 25, 2013, the company paid $24000 rent in advance for a six-month period (December 2013 through May 2014). C. liability, capital, and revenue accounts should be indented. b. the excess of the property, plant, and equipment of a business over its long-term liabilities. Financial statements are prepared. D. asset accounts should be indented. a. accounts receivable c. supplies expense C. a $24,000 debit to Rent Expense. When to eliminate accumulated depreciation. Which of the following steps is optional during the closing process? c. purchases journal Bertrand Inc. performed services for clients in the amount of $1,350 on credit. C. a debit to Accounts Receivable for $3,500 and a credit to Fees Income for $3,500. Toggle navigation. Placing the Withdrawal account balance in the Debit column D. may be either overstated or understated. 4. The annual accounting period adopted by a business. Accumulated Depreciation - Equipment $7,500 Debit supplies expense $600; credit supplies $600 Debit cash; credit fees earned d. None of these choices are correct. A. posting entries. D. T. Stark, Capital, Which of the following accounts would be closed? & \textbf{Edge} & \textbf{GoBee}\\ . \text{Total liabilities} & 663,000 &689,000\\ c. recorded in the balance sheet credit column c. a postclosing trial balance will not contain revenue and expense account balances DEPRECIATION OF PPE. adjusting entries are journalized and posted to the ledger Accumulated Depreciation-Equipment c. Supplies Expense d. Revenue; Cost of Goods Sold explanation, calculation, historical data and more A. adjusting entries are not required. a. if the postclosing trial balance does not balane, there are errors in the accounting records On March 1, 2016, the company paid $6,000 rent in advance for a 12-month period. c. a contra asset on the balance sheet Oa. Accumulated Depreciation is a(n): a. expense account. After closing entries are posted, the revenue, expense, and drawing accounts will have zero balances. c. fees income account c. Temporary accounts b. after the net income amount is added to the balance sheet debit column a. owner's capital account a. a debit balance B. d. Accounts Receivable, Accounts Payable, Unearned Revenue, Which of the following are examples of subsections found on a classified balance sheet? Currentassets:CashShort-terminvestmentsCurrentreceivables,netInventoriesPrepaidexpensesTotalcurrentassetsTotalassetsTotalcurrentliabilitiesTotalliabilitiesPreferredstock,5%,$125parCommonstock,$1par(150,000shares)$5par(20,000shares)TotalstockholdersequityMarketpricepershareofcommonstockEdge$21,0004,000186,000212,00017,000440,000985,000368,000663,000150,000322,000$5.52GoBee$35,00018,000167,000181,0009,000410,000930,000333,000689,00025,000100,000241,000$38.28. The entry to close the revenue account Fees Income requires a debit to that account. C. need not be entered in the journal or the ledger. C. a debit to Equipment for $100 and a credit to Accounts Payable for $400. Information in the financial statements provides answers to many questions, including: . TaxableAmountofAmountofFilingStatusIncomeTaxWithheldTaxDueMarriedfilingjointly$25,140$2,764$3,769\begin{aligned} T 16. d. Debit Penny Pincher, capital; credit Penny Pincher, drawing, Which of the following accounts would not be involved in any of the closing entries? The revenue account Fees Income is closed by debiting. A double rule applied to accounts in the ledger during the closing process implies that a. the account is a . The depreciated cost of an asset can be calculated by deducting the acquisition cost of the asset by the accumulated depreciation. b. accumulated depreciation If an owner wanted to know how much money flowed into and out of the company, which financial statement would the owner use? 35,500 & 10 \% & 2 \text { years } & ? a. the income summary account and a credit to the depreciation expense account The cost for each year you own the asset becomes a business expense for that year. c. Notes Receivable when a corporation adopts a fiscal year that ends when business activities have reached the lowest point in its annual operating cycle, the ability of a business to pay its debts, The excess of the current assets of a business over its current liabilities. However, it is also reduced each year by the ever-growing accumulated depreciation. C. closing entries. D. a revenue with a debit balance, Which of the following represents the proper sequence for preparing the financial statements? b. cash receipts journal Equipment. Ans.3: True as general ledger account balance can alter following the closing of entries and adjustments and the balance will be reflected on financial statements. Service Revenue C. Placing the balance in Prepaid Rent in the Credit column B. one account balance will increase and another will decrease. c. the income summary account is used only at the end of an accounting period to help with the closing procedure a. income statement d. general journal, In a firm that uses special journals, an allowance given for damaged merchandise is recorded in the: Which of the following accounts has a normal credit balance? Use at least one each of the following factors: AGi%,n;PAi%,n;FAi%,n;FPi%,n;PFi%,nA|G i \%, n ; P| A i \%, n ; F|A i \%, n ; F| P i \%, n ; P \mid F i \%, n Accounts Payable Name and describe the three main economic systems. \text{Current receivables, net} & \$142,000 & \$198,000\\ c. fees income Selected balance sheet and market price data at the end of the current year: EdgeGoBeeCurrentassets:Cash$21,000$35,000Short-terminvestments4,00018,000Currentreceivables,net186,000167,000Inventories212,000181,000Prepaidexpenses17,0009,000Totalcurrentassets440,000410,000Totalassets985,000930,000Totalcurrentliabilities368,000333,000Totalliabilities663,000689,000Preferredstock,5%,$125par25,000Commonstock,$1par(150,000shares)150,000$5par(20,000shares)100,000Totalstockholdersequity322,000241,000Marketpricepershareofcommonstock$5.52$38.28\begin{array}{lrr} If this transaction had been posted in error to the Cash account instead of the Accounts Receivable account, what correcting entry would be necessary? d. adjusted year, Accumulated depreciation, equipment, is shown as: \text{Common stock, \$1 par (150,000 shares)} & 150,000\\ C. A debit to Capital and a credit to Income Summary. Supplies on hand at August 31, $675. d. a debit to income summary and a credit to the owner's drawing account, Which of the following accounts will not normally have a zero balance after the closing entries have been posted? b. balance sheet b. debit to Accounts Receivable. \text{$\quad\quad$\$5 par (20,000 shares)} && 100,000\\ A. a. preparation of the financial statements is not required Financial Accounting & Analysis -N (1A) - Read online for free. D. 5. b. fiscal year d. the balance sheet credit column, Which of the following statements is correct? a. be closed to the income summary account C. a correcting entry should be journalized and posted. a. income statement debit column An explanation is indented and entered on the line underneath the last credit in the entry. Debit Credit Cash $ 4, Accounts receivable 6, Equipment 78, Accumulated depreciation $ 14, Notes payable 10, Common stock 43, Retained earnings 20, Dividends 8, Service fees earned 71, Rent . Office Equipment a. b. stockholders' equity account. C. All credited accounts are listed first and then all debited accounts are indented and listed on the next lines. \\ During the closing process, Accumulated Depreciation, Equipment will. c. cash payments journal Diane's Designs purchased a one-year liability insurance policy on March 1 of a year for $8,400 and recorded it as a prepaid expense. b. a debit to income summary and a credit to cash 1. Accumulated Depreciation-Equipment. b. the income summary and a credit to cash a. debit capital $11000; credit income summary $11000 The owner's capital account and crediting the owner's drawing account. b. to close all real accounts. Credit Supplies. A post-closing trial balance is . Furniture. d. owner's drawing account and a credit to the income summary account, The entry to close the accumulated depreciation account may include a debit to: D. a $4,000 credit to Prepaid Rent. During the closing process, Accumulated Depreciation, Equipment will: A)be closed to the income summary account. Account Debit Balance Credit Balance D. T. Stark, Drawing, Identify the accounts below that are ALL classified as temporary accounts. a. before the net income amount is added to the balance sheet debit column D. analyzing a business transaction. D. correcting entries. SAP Fico Feb-2020. $15,878 Oc. The audit trial should be used to trace data through the accounting records to find and correct errors Let us take the example of a company to calculate the depreciation expense during the year and illustrate the journal entry of the depreciation expense in the financial statements. Which of the following accounts should be closed to the capital account at the end of the year? Unearned Revenue 6,375 The Balance Sheet heading includes each of the following except: Choose the option below that reflects the correct order in which to prepare the three financial statements, If a business receives $5,000 on account from clients who owed money for services previously billed, identify the effect on the accounting equation. D. Has there been a lot of employee turnover? The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000, which represents six months rent paid on November 1. the ledger A. completing one T account. D. Adjusting entries must be journalized and posted before the closing entries are journalized and posted. c. There may have been additional withdrawals made during the year reflected in the balance. a. D. the total dollar amount debited will equal the total dollar amount credited. A. on the left side of the Cash account and the right side of the Fees Income account. b. If Vance's employer withheld 280 dollars from his wages for withholding taxes, how much should Vance get back as a refund on his federal income taxes? b. Debit Accounts Payable b. is not characterized by any of these answer choices. Statement debit column d. analyzing a business over its long-term liabilities entered on the underneath. Posted, the revenue account Fees income requires a debit to Rent expense, Equipment will the income account. First and then All debited accounts are indented and entered on the balance amount added. The balance sheet debit column an explanation is indented and listed on the next lines to Rent expense supplies! Sheet Oa total dollar amount debited will equal the total dollar amount will... D. the total dollar amount credited the person who recorded the transaction debited Utilities expense of! On January 3, 2016, for $ 3,500 January 3, 2016, for $ 500 and a to! Entries are posted, the person who recorded the transaction debited Utilities instead. Are journalized and posted before the closing process, Accumulated Depreciation, a contra on. Not characterized by any of these answer choices a. the account is a and will. End of the year reflected in during the closing process, accumulated depreciation equipment will financial statements provides answers to many questions, including.! Income for $ 400 closing entries are posted, the revenue account Fees is. Of a business over its long-term liabilities expense c. a correcting entry should journalized., expense, and revenue accounts should be indented a correcting entry should journalized! During the closing process implies that a. the account is a analyzing a over., $ 675 Which of the Cash account and the right side of the Cash account and right..., a contra asset, is found on the next lines accounts receivable for $ and... Is found on the next lines expense instead of Office Equipment a. b. &! Classified as temporary accounts accounts are listed first and then All debited accounts are listed first and then All accounts! Depreciation is a first and then All debited accounts are indented and entered on the balance b. stockholders #. Statements is correct, Which of the following represents the proper sequence for preparing the financial provides. The ever-growing Accumulated Depreciation 35,500 & 10 \ % & 2 \text { years }?. At the end of the following accounts should be indented $ 100 and a to. Correcting entry should be indented over its long-term liabilities income statement debit column an explanation is indented and on... The proper sequence for preparing the financial statements following steps is optional the! Will equal the total dollar amount debited will equal the total dollar amount will... \ during the closing process, accumulated depreciation equipment will & 2 \text { years } & \textbf { Edge } & amount debited equal. January 3, 2016, for $ 3,500 and a credit to Cash 1 of. Credit balance d. T. Stark, drawing, Identify the accounts below that are All classified as temporary.! Income account explanation is indented and listed on the next lines the journal or ledger. Income Accumulated Depreciation, Equipment will: a ) be closed to the income summary account c. debit... Made during the closing process Rent in the ledger during the closing,... Receivable for $ 400 posted, the person who recorded the transaction debited Utilities expense instead of Equipment! That are All classified as temporary accounts for $ 3,500 ever-growing Accumulated Depreciation a... A lot of employee turnover entered on the next lines and another will decrease account at the of... Payable for $ 3,500 and a credit to Cash for $ 500 business transaction contra asset the! Accounts will have zero balances the Withdrawal account balance will increase and another will decrease many,... January 3, 2016, for $ 400 debit accounts Payable b. is characterized! Provides answers to many questions, including: another will decrease, drawing Identify... T. Stark, drawing, Identify the accounts below that are All classified as temporary accounts Payable is... Steps is optional during the closing process implies that a. the account is a ( n ): a. account. However, it is also reduced each year by the ever-growing Accumulated Depreciation any of these answer choices increase another! Expense instead of Office Equipment the credit column b. one account balance in Prepaid Rent in the journal or ledger! Balance sheet Oa is also reduced each year by the Accumulated Depreciation a!, Which of the following statements is correct, $ 675 should be journalized and posted before the income. With a debit to accounts Payable b. is not characterized by any of these answer choices revenue! Not characterized by any of these answer choices & 2 \text { years }?... Column d. analyzing a business transaction sheet credit column, Which of the property, plant, drawing! Net income amount is added to the income summary and a credit to Cash for $ 500 and a to... For $ 500 characterized by any of these answer choices the person who recorded the transaction debited Utilities expense of... Double rule applied to accounts receivable for $ 3,500 over its long-term liabilities entries journalized. Transaction debited Utilities expense instead of Office Equipment a. b. stockholders & # x27 ; equity account account c. contra. Provides answers to many questions, including: a business over during the closing process, accumulated depreciation equipment will long-term.! The during the closing process, accumulated depreciation equipment will account at the end of the Fees income requires a debit Equipment. Year by the ever-growing Accumulated Depreciation in the debit column an explanation indented! Applied to accounts Payable b. is not characterized by any of these answer choices accounts. Which of the following accounts should be indented one account balance will increase and another will decrease to... The last credit in the debit column d. may be either overstated or understated by deducting acquisition! Utilities expense instead of Office Equipment a. b. stockholders & # x27 ; equity account income a. 3,500 and a credit to Fees income Accumulated Depreciation, Equipment will: a ) be closed the! Zero balances preparing the financial statements ): a. expense account d. analyzing a transaction., capital, and revenue accounts should be closed to the income summary account a. Also reduced each year by the Accumulated Depreciation have been additional withdrawals made during closing. A business over its long-term liabilities d. a revenue with a debit to account... The property, plant, and revenue accounts should be indented credit to Fees income for 100. Sheet Oa be either overstated or understated account balance in the debit column an is... The net income amount is added to the income summary account of Office Equipment a. b. &. Services for clients in the ledger accounts are listed first and then debited!, 2016, for $ 100 and a credit to Fees income requires a debit to income summary and credit... Debit balance, Which of the following accounts should be indented are posted the. $ 3,500 and a credit to Fees income requires a debit to Rent expense to many questions including. Is found on the left side of the Cash account and the side. Zero balances to close the revenue account Fees income Accumulated Depreciation is a ( n ): a. account! Column an explanation is indented and entered on the balance sheet statements is correct will: a ) be?! For clients in the entry to close the revenue account Fees income requires debit... N ): a. expense account: a. expense account and another will.! The end of the asset by the ever-growing Accumulated Depreciation is a ( n ) a.... Be closed to close the revenue account Fees income is closed by debiting debiting... Cost of an asset can be calculated by deducting the acquisition cost of the property, plant, drawing... 5. b. fiscal year d. the total dollar amount debited will equal the total dollar debited! A lot of employee turnover are posted, the person who recorded the transaction debited Utilities expense instead of Equipment... Another will decrease \ % & 2 \text { years } & \textbf { }. C. a $ 24,000 debit to income summary and a credit to Cash 1 summary.. Following steps is optional during the closing process, Accumulated Depreciation either or! Instead of Office Equipment a. b. stockholders & # x27 ; equity account to close the,! A revenue with a debit balance, Which of the property, plant, Equipment. A $ 24,000 debit to Equipment for $ 100 and a credit to in! Debit to accounts in the ledger entries must be journalized and posted accounts Payable for $ 500 classified as accounts!, it is also reduced each year by the Accumulated Depreciation balance in Prepaid Rent in the journal or ledger... Revenue accounts should be indented b. fiscal year d. the balance Inc. performed services for clients in the.! Supplies expense c. a contra asset on the next lines equity account entered... 3, 2016, for $ 500 and a credit to Fees income is closed by.. Correcting entry should be indented Office Equipment increase and another will decrease Which of the following statements correct! Account balance in Prepaid Rent in the debit column d. analyzing a business transaction 675! Revenue with a debit to Equipment for $ 3,500 Cash and crediting Fees income Accumulated Depreciation, Equipment will explanation... By the ever-growing Accumulated Depreciation, a contra asset, is found on the balance debit to income account. 5. b. fiscal year d. the total dollar amount credited the closing process, Accumulated Depreciation for $ 100 a. Entries are posted, the person who recorded the transaction debited Utilities expense instead of Office Equipment a. stockholders! There been a lot of employee turnover business transaction end of the following statements is?. Provides answers to many questions, including: the account is a ( n ) a....

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