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158.Which of the following is an optional step in the accounting cycle? a.Adjusting entries b.Closing entries c.Correcting entries d.Reversing entries 159.Which one of the following statements concerning the accounting cycle is incorrect? a.The accounting cycle includes journalizing transactions and posting to ledger accounts. b.The accounting cycle includes only one optional step. c.The steps in the accounting cycle are.
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BE 186 The following lettered items represent a classification scheme for a balance sheet, and the numbered items represent accounts found on balance sheets. In the blank next to each account, write the letter indicating to which category it belongs. A.Current assetsE.Current liabilities B.Long-term investmentsF.Long-term liabilities C.Property, plant, and equipmentG.Owner’s equity D.Intangible assetsH.Not on the.
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Ex. 203 Indicate the proper sequence of the steps in the accounting cycle by placing numbers 1-8 in the blank spaces.____a.Analyze business transactions.____b.Journalize and post adjusting entries.____c.Journalize and post closing entries.____d.Journalize the transactions.____e.Prepare a post-closing trial balance.____f.Prepare a trial balance.____g.Prepare financial statements.____h.Post to ledger accounts. Ex. 204 Prepare the necessary correcting entry for.
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Ex. 201 Identify which of the following accounts would appear in a post-closing trial balance. Accumulated Depreciation—EquipmentOwner’s Drawings Depreciation ExpenseService Revenue Interest PayableEquipment Ex. 202 The trial balances of Orton Company follow with the accounts arranged in alphabetic order. Analyze the data and prepare (a) the adjusting entries and (b) the closing entries made by Orton.
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48.When using a worksheet, adjusting entries are journalized a.after the worksheet is completed and before financial statements are prepared. b.before the adjustments are entered on to the worksheet. c.after the worksheet is completed and after financial statements have been prepared. d.before the adjusted trial balance is extended to the proper financial statement columns. 49.Assuming that.
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Ex. 241 The trial balances before and after adjustments for National Parks Calendars at the end of its fiscal year are presented below. National Parks Calendars Trial Balance September 31, 2016 ——————————————————————————————————————————— Before AdjustmentAfter Adjustment      Dr.                 Cr.         Dr.                   Cr.    Cash              $ 15,080                            $ 15,080 Accounts Receivable              14,960                            16,470 Supplies              2,760                            975 Prepaid Insurance              5,800                            1,270 Equipment              13,300             .
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Ex. 228 Mother Hips Garment Company purchased equipment on June 1 for $90,000, paying $20,000 cash and signing a 9%, 2-month note for the remaining balance. The equipment is expected to depreciate $18,000 each year. Mother Hips Garment Company prepares monthly financial statements. Instructions (a)Prepare the general journal entry to record the acquisition.
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108.If errors occur in the recording process, they a.should be corrected as adjustments at the end of the period. b.should be corrected as soon as they are discovered. c.should be corrected when preparing closing entries. d.cannot be corrected until the next accounting period. 109.A correcting entry a.must involve one balance sheet account and one income.
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78.The income statement for the month of June, 2016 of Snap Shot, Inc. contains the following information: a.a debit to Revenues for $7,300. b.credits to Expenses totalling $5,300. c.a credit to Income Summary for $2,000 d.a credit to Owner’s Capital for $2,000. 79.The income statement for the month of June, 2016 of Snap Shot, Inc..
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S-A E 261 The long-term liability section of Eduardo Company’s Balance Sheet includes the following accounts: Notes Payable $100,000 Mortgage Payable   250,000 Salaries and Wages Payable    75,000 Accumulated Depreciation  125,000 Total Long-Term Liabilities$550,000 Eduardo Company is an established company and does not experience any financial difficulties or have any cash flow problems. Discuss at least two.
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Ex. 197 At March 31, account balances after adjustments for Wide Screen are as follows: Account Balances Accounts(After Adjustment) Cash$  11,000 Supplies4,000 Equipment50,000 Accumulated Depreciation—Equipment12,000 Accounts Payable5,000 Owner’s, Capital20,000 Owner’s, Drawings8,000 Ticket Revenue59,000 Service Revenue55,000 Advertising Expense18,800 Supplies Expense17,000 Depreciation Expense4,000 Rent Expense26,000 Salaries and Wages Expense24,000 Utilities Expense5,200 Instructions Prepare the closing journal entries for Wide Screen. .
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TRUE-FALSE STATEMENTS 1.A worksheet is a mandatory form that must be prepared along with an income statement and balance sheet. 2.If a worksheet is used, financial statements can be prepared before adjusting entries are journalized. 3.If total credits in the income statement columns of a worksheet exceed total debits, the enterprise has net.
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11.Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure. 12.Closing the drawings account to Owner’s Capital is not necessary if net income is greater than owner’s drawings during the period. 13.The owner’s drawings account is a permanent account whose balance is carried forward to the next.
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MATCHING 257.Match the items below by entering the appropriate code letter in the space provided. A.Time period assumptionF.Accrued revenues B.Fiscal yearG.Depreciation C.Revenue recognition principleH.Accumulated depreciation D.Prepaid expensesI.Accrued expenses E.Expense recognition principleJ.Book value _____              1.A twelve month accounting period _____              2.Expenses paid before they are incurred _____              3.Cost less accumulated depreciation _____              4.Divides the economic life of a business into.
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Ex. 192 The adjustments columns of the worksheet for Mandy Company are shown below.      Adjustments               Account Titles           DebitCredit Accounts Receivable800 Prepaid Insurance650 Accumulated Depreciation    770Salaries and Wages Payable1,200Service Revenue   800Salaries and Wages Expense1,200Insurance Expense650Depreciation Expense  770        3,4203,420 Ex. 192(Cont.) Instructions (a)Prepare the adjusting entries. (b)Assuming the adjusted trial balance amount for each account is normal, indicate.
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148.Which statement about long-term investments is not true? a.They will be held for more than one year. b.They are not currently used in the operation of the business. c.They include investments in stock of other companies and land held for future use. d.They can never include cash accounts. 149.What is the order in which assets.
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Ex. 190 The worksheet for Gibler Rental Company appears below. Using the adjustment data below, complete the worksheet. Add any accounts that are necessary. Adjustment data: (a)Prepaid rent expired during August, $3. (b)Depreciation expense on equipment for the month of August, $8. (c)Supplies on hand on August 31 amounted to $6. (d)Salaries and wages expense incurred.
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Ex. 239 Compute the net income for 2016 based on the following amounts presented on the adjusted trial balance of Fley Company. Accumulated Depreciation – Equip.$25,000Depreciation Expense14,000Salaries and Wages Expense25,000Service Revenue48,000Unearned Service Revenue7,000 Ex. 240 New Slang Pest Control has the following balances in selected accounts on December 31, 2016. Accounts Receivable              $ 0 Accumulated Depreciation.
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COMPLETION STATEMENTS               246.The ______________ assumption divides the economic life of a business into artificial time periods.               247.An accounting period that is one year in length is referred to as a ______________ year. 248.The ______________ principle gives accountants guidance as to when revenue is to be recorded.               249.In a service company, revenue.
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88.All of the following statements about the post-closing trial balance are correct except it a.shows that the accounting equation is in balance. b.provides evidence that the journalizing and posting of closing entries have been properly completed. c.contains only permanent accounts. d.proves that all transactions have been recorded. 89.A post-closing trial balance will show a.only permanent account.
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Ex. 238 Presented below is the Trial Balance and Adjusted Trial Balance for Morning Jacket Company on December 31. MORNING JACKET Trial Balance December 31 ——————————————————————————————————————————— Before AdjustmentAfter Adjustment      Dr.                 Cr.         Dr.                   Cr.    Cash$  2,000$  2,000 Accounts Receivable2,8003,800 Prepaid Rent2,1001,400 Supplies1,200650 Equipment18,00018,000 Accumulated depreciation— Equipment$  1,300$  1,550 Accounts Payable2,7002,700 Notes Payable10,00010,000 Interest Payable140 Salaries and Wages Payable1,270 Unearned Service Revenue4,4603,960 Owner’s Capital7,2007,200 Owner’s Drawings3,2003,200 Service Revenue8,0009,500 Salaries and Wages Expense3,8605,130 Rent Expense5001,200 Supplies Expense550 Depreciation.
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21.An incorrect debit to Accounts Receivable instead of the correct account Notes Receivable does not require a correcting entry because total assets will not be misstated. 22.In a corporation, Retained Earnings is a part of owners’ equity. 23.A company’s operating cycle and fiscal year are usually the same length of time. 24.Cash and.
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68.The most efficient way to accomplish closing entries is to a.credit the income summary account for each revenue account balance. b.debit the income summary account for each expense account balance. c.credit the owner’s drawings balance directly to the income summary account. d.credit the income summary account for total revenues and debit the income summary.
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118.The following information is for Central Avenue Real Estate: a.$0. b.$80,000. c.$75,000. d.$175,000. 119.The following information is for Central Avenue Real Estate: a.$25,000. b.$60,000. c.$85,000. d.$170,000. 120.The following information is for Qwik Auto Supplies: a.$125,000. b.$235,000. c.$375,000. d.$560,000. 121.The following information is for Qwik Auto Supplies: a.$400,000. b.$450,000. c.$585,000. d.$635,000. 122.The following information is for Qwik Auto Supplies: a.$0. b.$585,000. c.$185,000. d.$725,000. 123.The following information is for Qwik Auto Supplies: a.$60,000. b.$140,000. c.$200,000. d.$350,000. 124.All of the following are property,.
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Ex. 199 The adjusted account balances of the Wellness Center at July 31 are as follows: AccountsAccount BalancesAccountsAccount Balances Cash$ 16,000Service Revenue$107,000 Accounts Receivable15,000Interest Revenue8,500 Supplies4,000Depreciation Expense25,000 Prepaid Insurance8,000Insurance Expense6,000 Buildings300,000Salaries and Wages Expense40,000 Accumulated Depreciation—Supplies Expense8,000   Buildings120,000Utilities Expense13,000 Accounts Payable19,000 Owner’s Capital195,000 Owner’s Drawings11,000 Instructions Prepare the end of the period closing entries for the Wellness Center. Ex. 200 The income statement of Fezzik’s.
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Ex. 210 Compute the dollar amount of current assets based on the following account balances. Accounts Receivable$22,000Accumulated Depreciation—Equipment27,000Cash8,400Equipment93,000Prepaid Rent7,000Short-term Investments15,000 Ex. 211 The financial statement columns of the worksheet for Maximum Effort at December 31, 2016, are as follows: MAXIMUM EFFORT Worksheet For the Year Ended December 31, 2016   Income Statement        Balance Sheet   Accounts  Debit    Credit .
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Ex. 194 These financial statement items are for Rugen Company at year-end, July 31, 2016. Salaries and wages payable$  2,980Notes payable (long-term)$  3,000 Salaries and wages expense45,700Cash5,200 Utilities expense21,100Accounts receivable9,780 Equipment38,000Accumulated depreciation6,000 Accounts payable4,100Owner’s Drawings4,000 Service revenue57,200Depreciation expense4,000 Rent revenue6,500Owner’s capital (beginning48,000 of the year) Instructions (a)Prepare an income statement and an owner’s equity statement for the year. The owner did.
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Ex. 195 Prepare the necessary closing entries based on the following selected accounts. Accumulated Depreciation $10,000Depreciation Expense6,000Owner’s Capital20,000Owner’s Drawings9,000Salaries and Wages Expense19,000Service Revenue40,000 Ex. 196 All revenue and expense accounts have been closed at the end of the calendar year for Patton Company. The Income Summary account has total debits of $530,000 and total.
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Ex. 208 Wakefield Company discovered the following errors made in January 2016. 1.A payment of salaries expense of $900 was debited to Equipment and credited to Cash, both for $900. 2.A collection of $2,000 from a client on account was debited to Cash $200 and credited to Service Revenue $200. 3.The purchase of equipment.
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Ex. 191 The account balances appearing on the trial balance (below) were taken from the general ledger of Speedy Copy Shop at September 30. Additional information for the month of September which has not yet been recorded in the accounts is as follows: (a)A physical count of supplies indicates $500 on hand at.
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Ex. 242 The White Stripes Animal Encounters operates a drive through tourist attraction. The company adjusts its accounts at the end of each month. The selected accounts appearing below reflect balances after adjusting entries were prepared on April 30. The adjusted trial balance shows the following: Prepaid Rent$16,000 Buildings30,000 Accumulated Depreciation—Buildings6,600 Unearned Ticket Revenue600 Other data: 1.Three.
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SHORT-ANSWER ESSAY QUESTIONS S-A E  258 The income statement is an important financial statement used by individuals who are interested in the operations of a business enterprise. Explain how the time period assumption and the revenue recognition and expense recognition principles provide guidance to accountants in preparing an income statement. S-A E  259 In.
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128.An intangible asset a.does not have physical substance, yet often is very valuable. b.is worthless because it has no physical substance. c.is converted into a tangible asset during the operating cycle. d.cannot be classified on the balance sheet because it lacks physical substance. 129.Liabilities are generally classified on a balance sheet as a.small liabilities and large.
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EXERCISES Ex. 188 The worksheet for Montoya Company has been completed through the adjusted trial balance. You are ready to extend each amount to the appropriate financial statement column. Indicate for each account, the financial statement column to which the account should be extended by placing a check mark (?) in the.
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Ex. 244 Yankee Hotel Foxtrot initiated operations on July 1, 2016. To manage the company officers and managers have requested monthly financial statements starting July 31, 2016. The adjusted trial balance amounts at July 31 are shown below. DebitsCredits Cash$ 7,680Accumulated Depreciation – Equipment              $  840 Accounts Receivable     810Notes Payable              6,000 Prepaid Rent  1,965Accounts Payable             .
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S-A E  263(Communication) A new sales representative, Bill Bailey, has just received his copy of the month-end financial reports. He is puzzled by the term “unearned revenue.” He left the following e-mail message for you on the company’s bulletin board system: What is this??? Creative Accounting, or what??? Line item 12 on.
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98.The step in the accounting cycle that is performed on a periodic basis (i.e., monthly, quarterly) is a.analyzing transactions. b.journalizing and posting adjusting entries. c.preparing a post-closing trial balance. d.posting to ledger accounts. 99.Which one of the following is an optional step in the accounting cycle of a business enterprise? a.Analyze business transactions b.Prepare a worksheet c.Prepare a.
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MULTIPLE CHOICE QUESTIONS 38.Preparing a worksheet involves a.two steps. b.three steps. c.four steps. d.five steps. 39.The adjustments entered in the adjustments columns of a worksheet are a.not journalized. b.posted to the ledger but not journalized. c.not journalized until after the financial statements are prepared. d.journalized before the worksheet is completed. 40.The information for preparing a trial balance on a worksheet is.
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Ex. 236 Gwynn Company has an accounting fiscal year which ends on June 30. The company also has a policy of paying the weekly payroll on Friday. Payroll records indicate the following salary costs were incurred.   Date Amount MondayJune 28$3,000 TuesdayJune 293,800 WednesdayJune 303,300 ThursdayJuly 13,500 FridayJuly 22,400 Instructions (a)Prepare any necessary adjusting journal entries that should be.
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Ex. 206 As Mel Smith was doing his year-end accounting, he noticed that the bookkeeper had made errors in recording several transactions. The erroneous transactions are as follows: (a)A check for $700 was issued for goods previously purchased on account. The bookkeeper debited Accounts Receivable and credited Cash for $700. (b)A check for.
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BRIEF EXERCISES BE 176 Use the following income statement for the year 2016 for Belle Company to prepare entries to close the revenue and expense accounts for the company. Service revenue$85,000 Expenses: Salaries and Wages Expense$40,000 Rent Expense12,500 Advertising Expense    8,700 Total expenses  61,200 Net income (loss)$23,800 BE 177 Coe Company earned net income of $56,000 during 2016. The company had.
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Ex. 235 The following ledger accounts are used by the Miami Ereghound Track: Accounts Receivable Prepaid Advertising Prepaid Rent Unearned Ticket Revenue Advertising Expense Rent Expense Ticket Revenue Sales Revenue Instructions For each of the following transactions below, prepare the journal entry (if one is required) to record the initial transaction and then prepare the adjusting entry, if any, required on.
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aEx. 245 1.On-Time Truckers prepares monthly financial statements. On July 1, the Supplies account had a balance of $3,500. During July, additional supplies were purchased for $4,800 and that amount was debited to Supplies Expense. On July 31, a physical count of supplies revealed that there was $2,200 on hand. Prepare.
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Ex. 243 The adjusted trial balance of Personal Financial Planners appears below. Using the information from the adjusted trial balance, you are to prepare for the month ending December 31, 2016: 1.an income statement. 2.an owner’s equity statement. 3.a balance sheet. Personal Financial Planners Adjusted Trial Balance December 31, 2016 ———————————————————————————————————————————    Debit  Credit Cash.....................................................$  4,900 Accounts Receivable.........................................2,300 Supplies..................................................1,800 Equipment................................................14,000 Accumulated Depreciation—Equipment...........................$  3,000 Accounts Payable...........................................3,300 Unearned.
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Ex. 232 One part of eight adjusting entries is given below. Instructions Indicate the account title for the other part of each entry. 1.Unearned Service Revenue is debited. 2.Prepaid Rent is credited. 3.Accounts Receivable is debited. 4.Depreciation Expense is debited. 5.Salaries and Wages Expense is debited. 6.Interest Payable is credited. 7.Service Revenue is credited (give two possible debit accounts). 8.Supplies Expense.
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58.Closing entries are made a.in order to terminate the business as an operating entity. b.so that all assets, liabilities, and owner’s capital accounts will have zero balances when the next accounting period starts. c.in order to transfer net income (or loss) and owner’s drawings to the owner’s capital account. d.so that financial statements can.
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138.The most important information needed to determine if companies can pay their current obligations is the a.net income for this year. b.projected net income for next year. c.relationship between current assets and current liabilities. d.relationship between short-term and long-term liabilities. 139.The following items are taken from the financial statements of the Freight Service for the.
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Ex. 230 Prepare the required end-of-period adjusting entries for each independent case listed below. Case 1 Sleater-Kinney Company began the year with a $3,000 balance in the Supplies account. During the year, $8,500 worth of additional supplies were purchased. A physical count of supplies on hand at the end of the year revealed.
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