156.
The following table contains financial information for Trumpeter’s Inc. before closing
entries:
Cash
$12,000
Supplies
4,500
Prepaid Rent
2,000
Salaries Expense
4,500
Equipment
65,000
Service Revenue
30,000
Miscellaneous Expense
20,000
Dividends
3,000
Accounts Payable
5,000
Common Stock
68,000
Retained Earnings
8,000
What is the amount of Trumpeter’s total stockholders’ equity?
157.
If a company records cash received for services to be provided in the future with a debit to
Cash and a credit to Service Revenue, how will this error affect total assets for the current
period?
158.
Providing services to customers on account would affect the balances reported in which
financial statement(s)?
159.
If a company incorrectly records Service Revenue too high, which of the following is true?
160.
When a company owes employee salaries at the end of the period but fails to make an
adjusting entry for that amount owed, which of the following is true?
161.
Which of the following describes the purpose(s) of closing entries?
162.
The primary purpose of closing entries is to:
163.
The closing process includes which of the following?
164.
The purpose of closing entries is to transfer:
165.
Which of the following is a permanent account?
166.
Which of the following is true concerning temporary and permanent accounts?
167.
The following table contains financial information for Fisher Inc. before closing entries:
Cash
$23,000
Common Stock
34,000
Supplies
4,000
Advertising Expense
2,000
Accounts Payable
20,000
Service Revenue
30,000
Salaries Expense
3,000
Prepaid Rent
4,000
Dividends
3,000
Equipment
45,000
How many of the above accounts are permanent?
168.
Permanent accounts would not include:
169.
Permanent accounts would
not
include:
170.
Temporary accounts would
not
include:
171.
Of the following six accounts, which ones have temporary balances:
(1) Service Revenue
(2) Dividends
(3) Salaries Expense
(4) Common Stock
(5) Retained Earnings
(6) Cash
172.
Which of the following accounts will NOT be involved in closing entries?
173.
When a company prepares closing entries, which one of the following is NOT a correct
closing entry?
174.
The ending balance of Retained Earnings can best be described as:
175.
The ending Retained Earnings balance of Juan’s Mexican Restaurant chain increased by
$3.2 million from the beginning of the year. The company declared a dividend of $1.3
million during the year. What was the net income earned during the year?
176.
The Retained Earnings account had a beginning credit balance of $26,000. During the
period, the business had a net loss $12,000, and the company paid dividends of $8,000.
The ending balance in the Retained Earnings account is:
177.
In the first three years of operations, Lindsey Corporation earned net income/loss of –
$150,000, $100,000, and $250,000. At the end of the third year, Lindsey Corporation has a
balance of $120,000 in its Retained Earnings account. What is the total amount of
dividends Lindsey Corporation paid over the three years?
178.
For the first three years of operations, the company reports net income of $1,000, $2,000,
and $3,000, and pays dividends of $500, $1,000, and $1,000. What is the balance of
retained earnings at the end of the third year?
179.
The closing entry for expenses includes:
180.
Which of the following is a possible closing entry?
181.
Frosty Inc. has the following balances on December 31 prior to closing entries:
Revenues
$35,000
Retained Earnings, Jan. 1
10,000
Cash
7,000
Expenses
23,000
Accounts Payable
4,000
Dividends
1,000
Supplies
18,000
Based upon the balances above, what net adjustment would be made to Retained
Earnings due to closing entries?
182.
A list of all accounts and their balances after posting closing entries is referred to as:
183.
A post-closing trial balance:
184.
Which one of the following accounts would NOT have a balance after closing entries?
185.
Which of the following accounts is(are) listed in a post-closing trial balance?
186.
Which of the following statements is
true
regarding the post-closing trial balance?
Topic: Post-Closing Trial Balance
Matching Questions
187.
Match each term associated with accrual-basis and cash-basis accounting with its most
appropriate description.
A company receives cash from customers in May and
2. Accrual-basis
Formal concept which states that sales of products or
services are recorded in the period they are provided to
A company pays cash for supplies in May and uses those
4. Accrual-basis
Informal concept in accounting which states that
expenses are recorded in the same period as the revenues
5. Revenue recognition
A company pays cash for supplies in May and uses those
A company receives cash from customers in May and
188.
Match each type of adjusting entry with its definition.
Pay cash (or have an obligation to pay cash) in the current
Record an expense in the current period that will be paid
Receive cash in the current period that will be recorded as
Record a revenue in the current period that will be
189.
Match each term related to financial statements with its description.
1. Statement of
A list of accounts showing total revenues minus total
2. Adjusted trial
A statement showing the change in the balance of
A list of accounts showing total assets equal total
A list of all accounts and their balances after adjusting
190.
Match each term related to closing entries with its description.
2. Post-closing trial balance
List of permanent and temporary accounts and their
Essay Questions
191.
For each transaction below, calculate the amount of revenue to be recognized in the
current period using accrual-basis accounting:
(a) Performed $24,000 of services during the month and received full cash payment from
customers at the time of service.
(b) Performed $9,000 of services during the month and billed customers. Customers are
expected to pay next month.
(c) Received $12,000 cash from customers for services to be provided next month.
192.
For each transaction below, calculate the amount of expense to be recognized in the
current period using accrual-basis accounting:
(a) Paid $3,500 on account for supplies purchased last period. All supplies were used last
month.
(b) Paid $5,000 cash for advertising in the current period.
(c) Employees worked in the current period but will not be paid until the following period,
$4,500.