The income statement for the year 2017 of Poole Co.

contains the following information:

Revenues $150,000
Expenses:
Salaries and Wages Expense $90,000
Rent Expense 32,000
Advertising Expense 12,000
Supplies Expense 12,000
Utilities Expense 5,000
Insurance Expense 4,000
Total expenses 145,000
Net income (loss) $(5,000)

The entry to close the expense accounts includes

debit to Income Summary for $145,000.

debit to Income Summary for $5,000.
debit to Salaries and Wages Expense for $90,000.
credit to Income Summary for $5,000.

The following data (in thousands) is available for Chang Company.

Debit Credit
Mortgage payable ¥ 2,829
Prepaid expenses ¥ 2,640
Equipment 34,500
Patents 792
Short-term investments 11,070
Notes payable in 2017 1,443
Cash 8,004
Accumulated depreciation 16,965
Accounts payable 4,332
Notes payable after 2017 7,104
Share capital-ordinary 30,000
Retained earnings 9,189
Accounts receivable 5,088
Inventories 3,768
Total ¥ ¥ 65,862
65,862

The subtotal of the last asset classification on the 2017 Statement of Financial Position is

¥34,500.
 ¥17,535.
¥30,570.
¥27,930.

On March 8, Fernetti Company bought office supplies on account from the Flint Company for $550. Fernetti
Company incorrectly debited Equipment for $500 and credited Accounts Payable for $500. The entries have been
posted to the ledger. the correcting entry should be:

Supplies 550
Accounts Payable 500
Equipment 50
Supplies 550
Equipment 550
Supplies 550
Equipment 500
Accounts Payable 50
Supplies 550
Accounts Payable 550

The following items (in thousands) are taken from the financial statements of Huang Company for the year ending
December 31, 2017:

Accounts payable ¥ 72,000

Accounts receivable 44,000
Accumulated depreciation–equipment 112,000
Advertising expense 84,000
Cash 60,000
Share capital-ordinary 168,000
Dividends 56,000
Depreciation expense 48,000
Equipment 840,000
Insurance expense 12,000
Note payable, due 6/30/18 280,000
Prepaid insurance (12-month policy) 24,000
Rent expense 68,000
Retained earnings (1/1/17) 240,000
Salaries and wages expense 128,000
Service revenue 532,000
Supplies 16,000
Supplies expense 24,000

The sub-classifications for assets on the company's classified statement of financial position would include all of the
following except:
 Current Assets.
Long-term Assets.
Property, Plant, and Equipment.
Intangible Assets.

Which account listed below would be double ruled in the ledger as part of the closing process?

Accumulated Depreciation
Cash
Retained Earnings
Dividends

The income statement and statement of financial position columns of Reed Company's worksheet reflect the
following totals:

Income Statement Statement of financial

position
Dr. Cr. Dr. Cr.
Totals $58,000 $45,000 $34,000 $47,000

To enter the net income (or loss) for the period into the above worksheet requires an entry to the

income statement debit column and the income statement credit column.
statement of financial position debit column and the statement of financial position credit column.
income statement debit column and the statement of financial position credit column.
income statement credit column and the statement of financial position debit column

When using a worksheet, adjusting entries are journalized

before the adjusted trial balance is extended to the proper financial statement columns.
after the worksheet is completed and after financial statements are prepared.
before the adjustments are entered on to the worksheet.
after the worksheet is completed and before financial statements are prepared.

Which of the following is a true statement about closing the books of a corporation?

Revenues and expenses are closed to the Income Summary account.

 Expenses are closed to the Expense Summary account.
Only revenues are closed to the Income Summary account.
Revenues, expenses, and the dividends account are closed to the Income Summary account.

In order to close the Dividends account, the

retained earnings account should be credited.

retained earnings account should be debited.
income summary account should be debited.
income summary account should be credited.

An intangible asset

is worthless because it has no physical substance.

is converted into a tangible asset during the operating cycle.
cannot be classified on the statement of financial position because it lacks physical substance.
does not have physical substance, yet often is very valuable.

The information for preparing a trial balance on a worksheet is obtained from

financial statements.
general journal entries.
business documents.
general ledger accounts.

The income statement for the year 2017 of Poole Co. contains the following information:

Revenues $150,000
Expenses:
Salaries and Wages Expense $90,000
Rent Expense 32,000
Advertising Expense 12,000
Supplies Expense 12,000
Utilities Expense 5,000
Insurance Expense 4,000
Total expenses 145,000
Net income (loss) $(5,000)
The entry to close the expense accounts includes a

debit to Income Summary for $5,000.

credit to Income Summary for $5,000.
debit to Income Summary for $145,000.
debit to Salaries and Wages Expense for $90,000.

Assuming that there is a net loss for the period, debits equal credits in all but which section of the worksheet?

Adjusted trial balance columns

Income statement columns
Adjustments columns
Trial balance columns

The income statement for the year 2017 of Poole Co. contains the following information:

Revenues $150,000
Expenses:
Salaries and Wages Expense $90,000
Rent Expense 32,000
Advertising Expense 12,000
Supplies Expense 12,000
Utilities Expense 5,000
Insurance Expense 4,000
Total expenses 145,000
Net income (loss) $(5,000)

The entry to close the revenue account includes a

credit to Income Summary for $5,000.

debit to Revenues for $150,000.
debit to Income Summary for $5,000.
credit to Revenues for $150,000

On September 23, Riley Company received a $350 check from Jack Colaw for services to be performed in the
future. The bookkeeper for Riley Company incorrectly debited Cash for $350 and credited Accounts Receivable for
$350. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should

debit Cash $350 and credit Unearned Service Revenue $350.

debit Accounts Receivable $350 and credit Cash $350.
debit Accounts Receivable $350 and credit Unearned Service Revenue $350.
 debit Accounts Receivable $350 and credit Service Revenue $350.

If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then
the company has

suffered a net loss for the period.

to make an adjusting entry.
earned net income for the period.
an error because debits do not equal credits.

The following information (in thousands) is for Zháng Office Supplies:

Zháng Office Supplies

Statement of Financial Position
December 31, 2017
Trademark ¥280,000 Share Capital ¥480,000
Land ¥360,000 Retained Earnings
1,000,000
Buildings ¥400,000 ¥1,480,000
Less:Accum.
Depreciation 80,000 320,000 680,000
Land Held for Accounts Payable
Investment 300,000 240,000
Salaries Wages
Payable
Prepaid Insurance 120,000 40,000
Mortgage Payable
Inventory 280,000 360,000
Accounts
Receivable 200,000
Cash 260,000 640,000
Total Equity and
Total Assets ¥2,120,000 Liabilities ¥ 2,120,000

The total amount of liabilities to be classified as current liabilities is

¥240,000.
¥640,000.
¥280,000.
¥600,000.

Equipment is classified in the statement of financial position as

a current asset.
 a long-term investment.
property, plant, and equipment.
an intangible asset.

Closing entries

summarize the activity in every account.

reduce the number of permanent accounts.
are prepared before the financial statements.
cause the revenue and expense accounts to have zero balances.

Which of the following steps in the accounting cycle would not generally be performed daily?

Analyze business transactions

Prepare adjusting entries
Journalize transactions
Post to ledger accounts

Which account will appear last under the current assets classification on the Statement of Financial Position?

Prepaid Expenses.
cash.
Accounts Receivable.
Short-term investments.

What amount will be reflected for Retained Earnings in the Statement of Financial Position columns of the
worksheet?

Debit Credit
Cash €5,712
Accounts Receivable 3,904
Supplies 480
Accounts Payable €2,792
Unearned Service Revenue 160
Share Capital-ordinary 5,000
Retained Earnings 1,760
Dividends 300
Service Revenue 4,064
Salaries and Wages 1,344
Expense
Miscellaneous Expense 256
Supplies Expense 2,228
Salaries and Wages Payable 448
Total €14,224 €14,224
 €2,060
€1,760
€1,996
€1,696

The income statement for the year 2017 of Poole Co. contains the following information:

Revenues $150,000
Expenses:
Salaries and Wages Expense $90,000
Rent Expense 32,000
Advertising Expense 12,000
Supplies Expense 12,000
Utilities Expense 5,000
Insurance Expense 4,000
Total expenses 145,000
Net income (loss) $(5,000)

After the revenue and expense accounts have been closed, the balance in Income Summary will be

a credit balance of $5,000.

a credit balance of $150,000.
$0.
a debit balance of $5,000.

The income statement for the month of June, 2017 of Taylor Enterprises contains the following information:

Revenues £16,000
Expenses:
Salaries and Wages Expense £4,000
Rent Expense 3,000
Supplies Expense 600
Advertising Expense 400
Insurance Expense 200
Total expenses 8,200
Net income £7,800

The entry to close the expense accounts includes a

credit to Rent Expense for ₤3,000.

debit to Income Summary for ₤7,800.
credit to Income Summary for ₤8,200.
debit to Salaries and Wages Expense for ₤2,000.
A worksheet is a multiple column form that facilitates the

measurement process.
preparation of financial statements.
analysis process.
identification of events.

The information for preparing a trial balance on a worksheet is obtained from

business documents.
general ledger accounts.
financial statements.
general journal entries

The temporary account balances ultimately wind up in what account?

Share Capital-ordinary.
Comprehensive Income.
Income Summary.
Retained Earnings.

The income statement for the year 2017 of Poole Co. contains the following information:

Revenues $150,000
Expenses:
Salaries and Wages Expense $90,000
Rent Expense 32,000
Advertising Expense 12,000
Supplies Expense 12,000
Utilities Expense 5,000
Insurance Expense 4,000
Total expenses 155,000
Net income (loss) $(5,000)

The entry to close Income Summary to Retained Earnings includes

a debit to Revenue for $150,000.

a credit to Income Summary for $5,000.
a credit to Retained Earnings for $5,000.
credits to Expenses totalling $145,000.

The income statement for the year 2017 of Poole Co. contains the following information:
Revenues $150,000
Expenses:
Salaries and Wages Expense $90,000
Rent Expense 32,000
Advertising Expense 12,000
Supplies Expense 12,000
Utilities Expense 5,000
Insurance Expense 4,000
Total expenses 155,000
Net income (loss) $(5,000)

At January 1, 2017, Poole reported Retained Earnings of $50,000. Dividends for the year totalled $10,000. At
December 31, 2014, the company will report Retained Earnings of

$80,000.
$35,000.
$75,000.
$85,000.

Which of the following permanent account is changed during the closing process?

Share Capital-ordinary.
Retained Earnings.
Unearned Service Revenue.
None of these answer choices are correct.

Which one of the following statements concerning the accounting cycle is incorrect?

The steps in the accounting cycle are performed in sequence.

The accounting cycle includes only one optional step.
The steps in the accounting cycle are repeated in each accounting period.
The accounting cycle includes journalizing transactions and posting to ledger accounts.

The adjustments entered in the adjustments columns of a worksheet are

not journalized.
posted to the ledger but not journalized.
not journalized until after the financial statements are prepared.
journalized before the worksheet is completed.

A worksheet can be thought of as a(n)

 part of the general ledger.
part of the journal.
permanent accounting record.
optional device used by accountants.

The following data (in thousands) is available for Chang Company.

Debit Credit
Mortgage payable ¥ 2,829
Prepaid expenses ¥ 2,640
Equipment 34,500
Patents 792
Short-term investments 11,070
Notes payable in 2017 1,443
Cash 8,004
Accumulated depreciation 16,965
Accounts payable 4,332
Notes payable after 2017 7,104
Share capital-ordinary 30,000
Retained earnings 9,189
Accounts receivable 5,088
Inventories 3,768
Total ¥ ¥ 65,862
65,862

The subtotal of the last asset classification on the 2017 Statement of Financial Position is:

¥34,500.
¥17,535.
¥27,930.
¥30,570.

The following information (in thousands) is for Zháng Office Supplies:

Zháng Office Supplies

Statement of Financial Position
December 31, 2017
Trademark ¥280,000 Share Capital ¥480,000
Land ¥360,000 Retained Earnings
1,000,000
Buildings ¥400,000 ¥1,480,000
Less:Accum.
Depreciation 80,000 320,000 680,000
Land Held for Accounts Payable
Investment 300,000 240,000
Salaries Wages
Payable
Prepaid Insurance 120,000 40,000
Mortgage Payable
Inventory 280,000 360,000
Accounts
Receivable 200,000
Cash 260,000 640,000
Total Equity and
Total Assets ¥2,120,000 Liabilities ¥ 2,120,000

The total amount of assets to be classified as investments is

¥600,000.
¥0.
¥720,000.
¥300,000.

The following items (in thousands) are taken from the financial statements of Huang Company for the year ending
December 31, 2017:

Accounts payable ¥ 72,000

Accounts receivable 44,000
Accumulated depreciation–equipment 112,000
Advertising expense 84,000
Cash 60,000
Share capital-ordinary 168,000
Dividends 56,000
Depreciation expense 48,000
Equipment 840,000
Insurance expense 12,000
Note payable, due 6/30/18 280,000
Prepaid insurance (12-month policy) 24,000
Rent expense 68,000
Retained earnings (1/1/17) 240,000
Salaries and wages expense 128,000
Service revenue 532,000
Supplies 16,000
Supplies expense 24,000

The sub-classifications for assets on the company's classified statement of financial position would include all of the
following except:

Long-term Assets.
Current Assets.
 Intangible Assets.
Property, Plant, and Equipment.

The income statement for the year 2017 of Poole Co. contains the following information:

Revenues $150,000
Expenses:
Salaries and Wages Expense $90,000
Rent Expense 32,000
Advertising Expense 12,000
Supplies Expense 12,000
Utilities Expense 5,000
Insurance Expense 4,000
Total expenses 155,000
Net income (loss) $(5,000)

The entry to close Income Summary to Retained Earnings includes

credits to Expenses totalling $145,000.

a credit to Income Summary for $5,000.
a debit to Revenue for $150,000.
a credit to Retained Earnings for $5,000.

When constructing a worksheet, accounts are often needed that are not listed in the trial balance already entered
on the worksheet from the ledger. Where should these additional accounts be shown on the worksheet?

They should be inserted in chart of account order into the trial balance already given.
They should be inserted on the lines immediately below the trial balance totals.
They should be inserted in alphabetical order into the trial balance accounts already given.
They should not be inserted on the trial balance until the next accounting period.

On May 25, Carlin Company received a $550 check from Andy Jeter for services to be performed in the future. The
bookkeeper for Carlin Company incorrectly debited Cash for $550 and credited Accounts Receivable for $550. The
amounts have been posted to the ledger. To correct this entry, the bookkeeper should:

debit Accounts Receivable $550 and credit Unearned Service Revenue $550.
debit Accounts Receivable $550 and credit Service Revenue $550.
debit Cash $550 and credit Unearned Service Revenue $550.
debit Accounts Receivable $550 and credit Cash $550.

The following items (in thousands) are taken from the financial statements of Huang Company for the year ending
December 31, 2017:
Accounts payable ¥ 72,000
Accounts receivable 44,000
Accumulated depreciation–equipment 112,000
Advertising expense 84,000
Cash 60,000
Share capital-ordinary 168,000
Dividends 56,000
Depreciation expense 48,000
Equipment 840,000
Insurance expense 12,000
Note payable, due 6/30/18 280,000
Prepaid insurance (12-month policy) 24,000
Rent expense 68,000
Retained earnings (1/1/17) 240,000
Salaries and wages expense 128,000
Service revenue 532,000
Supplies 16,000
Supplies expense 24,000

What is the book value of the equipment at December 31, 2017?

¥680,000
¥840,000
¥728,000
¥952,000

The use of reversing entries

changes the amounts reported in the financial statements.

simplifies the recording of subsequent transactions.
is required for all adjusting entries.
is a required step in the accounting cycle.

Assuming that there is a net loss for the period, debits equal credits in all but which section of the worksheet?

Adjustments columns
Adjusted trial balance columns
Trial balance columns
Income statement columns
The following information (in thousands) is for Zháng Office Supplies:

Zháng Office Supplies

Statement of Financial Position
December 31, 2017
Trademark ¥280,000 Share Capital ¥480,000
Land ¥360,000 Retained Earnings
1,000,000
Buildings ¥400,000 ¥1,480,000
Less:Accum.
Depreciation 80,000 320,000 680,000
Land Held for Accounts Payable
Investment 300,000 240,000
Salaries Wages
Payable
Prepaid Insurance 120,000 40,000
Mortgage Payable
Inventory 280,000 360,000
Accounts
Receivable 200,000
Cash 260,000 640,000
Total Equity and
Total Assets ¥2,120,000 Liabilities ¥ 2,120,000

The total amount of assets to be classified as property, plant, and equipment is

¥680,000.
¥980,000.
¥760,000.
¥1,280,000.

The steps in the preparation of a worksheet do not include

analyzing documentary evidence.

preparing a trial balance on the worksheet.
entering the adjustments in the adjustment columns.
entering adjusted balances in the adjusted trial balance columns.

Which classification of assets will appear last in the Statement of Financial Position?
Current Assets.
Intangible Assets.
Long-term investments.
 Property, Plant and Equipment.

The following data (in thousands) is available for Chang Company.

Debit Credit
Mortgage payable ¥ 2,829
Prepaid expenses ¥ 2,640
Equipment 34,500
Patents 792
Short-term investments 11,070
Notes payable in 2017 1,443
Cash 8,004
Accumulated depreciation 16,965
Accounts payable 4,332
Notes payable after 2017 7,104
Share capital-ordinary 30,000
Retained earnings 9,189
Accounts receivable 5,088
Inventories 3,768
Total ¥ ¥ 65,862
65,862

Total assets on the Statement of Financial Position for 2017 are:

¥46,257.
¥82,827.
¥65,862.
¥48,897.

The income statement and statement of financial position columns of Reed Company's worksheet reflect the
following totals:

Income Statement Statement of financial

position
Dr. Cr. Dr. Cr.
Totals $58,000 $45,000 $34,000 $47,000

The net income (or loss) for the period is

$13,000 income.
 $13,000 loss.
not determinable.
$45,000 income.

The following information (in thousands) is for Zháng Office Supplies:

Zháng Office Supplies

Statement of Financial Position
December 31, 2017
Trademark ¥280,000 Share Capital ¥480,000
Land ¥360,000 Retained Earnings
1,000,000
Buildings ¥400,000 ¥1,480,000
Less:Accum.
Depreciation 80,000 320,000 680,000
Land Held for Accounts Payable
Investment 300,000 240,000
Salaries Wages
Payable
Prepaid Insurance 120,000 40,000
Mortgage Payable
Inventory 280,000 360,000
Accounts
Receivable 200,000
Cash 260,000 640,000
Total Equity and
Total Assets ¥2,120,000 Liabilities ¥ 2,120,000

The total amount of assets to be classified as investments is

¥720,000.
¥0.
¥600,000.
¥300,000.

Computing net income on the worksheet occurs in step

three.
five.
two.
four.