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Inigo Company prepared the following adjusting entries at year end on December 31, 2018: Inigo Company prepared the following adjusting entries at year end on December 31, 2018: In an effort to minimize errors in recording transactions, Inigo Company utilizes reversing entries. Prepare reversing entries on January 1, 2019. In an effort to minimize errors in recording transactions, Inigo Company utilizes reversing entries. Prepare reversing entries on January 1, 2019.

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A post-closing trial balance will show


A) only permanent account balances.
B) only temporary account balances.
C) zero balances for all accounts.
D) the amount of net income (or loss) for the period.

E) A) and C)
F) A) and D)

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


A) financial statements.
B) general ledger accounts.
C) general journal entries.
D) business documents.

E) B) and C)
F) B) and D)

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A post-closing trial balance should be prepared


A) before closing entries are posted to the ledger accounts.
B) after closing entries are posted to the ledger accounts.
C) before adjusting entries are posted to the ledger accounts.
D) only if an error in the accounts is detected.

E) A) and B)
F) A) and C)

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The following information is for Sunny Day Real Estate: The following information is for Sunny Day Real Estate: The total dollar amount of liabilities to be classified as current liabilities is A) $15,000. B) $60,000. C) $75,000. D) $160,000. The total dollar amount of liabilities to be classified as current liabilities is


A) $15,000.
B) $60,000.
C) $75,000.
D) $160,000.

E) A) and D)
F) All of the above

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What is the order in which assets are generally listed on a classified balance sheet?


A) Current and long-term
B) Current; property, plant, and equipment; long-term investments; intangible assets
C) Current; property, plant, and equipment; intangible assets; long-term investments
D) Current; long-term investments; property, plant, and equipment; intangible assets

E) B) and C)
F) A) and B)

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The use of reversing entries


A) is a required step in the accounting cycle.
B) changes the amounts reported in the financial statements.
C) simplifies the recording of subsequent transactions.
D) is required for all adjusting entries.

E) A) and B)
F) B) and C)

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The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2018:  Accounts payable 18,000 Accounts receivable 11,000 Accumulated depreciation - equipment 28,000 Advertising expense 21,000 Cash 15,000 Common stock 42,000 Dividends 14,000 Depreciation expense 12,000 Insurance expense 3,000 Note pavable, due 6/30/1970,000\begin{array}{lr}\text { Accounts payable } & 18,000 \\\text { Accounts receivable } & 11,000 \\\text { Accumulated depreciation - equipment } & 28,000 \\\text { Advertising expense } & 21,000 \\\text { Cash } & 15,000 \\\text { Common stock } & 42,000 \\\text { Dividends } & 14,000 \\\text { Depreciation expense } & 12,000 \\\text { Insurance expense } & 3,000 \\\text { Note pavable, due } 6 / 30 / 19 & 70,000\end{array}  Prepaid insurance (12-month policy)  6,000 Rent expense 17,000 Retained earnings (1/1/18)  60,000 Salaries and wages expense 32,000 Service revenue 133,000 Supplies 4,000 Supplies expense 6,000 Equipment 210,000\begin{array}{lr}\text { Prepaid insurance (12-month policy) } & 6,000 \\\text { Rent expense } & 17,000 \\\text { Retained earnings (1/1/18) } & 60,000 \\\text { Salaries and wages expense } & 32,000 \\\text { Service revenue } & 133,000 \\\text { Supplies } & 4,000 \\\text { Supplies expense } & 6,000 \\\text { Equipment } & 210,000\end{array} What is the company's net income for the year ending December 31, 2018?


A) $12,000
B) $28,000
C) $42,000
D) $133,000

E) A) and B)
F) A) and C)

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Identify which of the following accounts would have balances on a post-closing trial balance. (1) Service Revenue (2) Income Summary (3) Notes Payable (4) Interest Expense (5) Cash

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(3) Notes ...

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The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2018:  Accounts payable 18,000 Accounts receivable 11,000 Accumulated depreciation - equipment 28,000 Advertising expense 21,000 Cash 15,000 Common stock 42,000 Dividends 14,000 Depreciation expense 12,000 Insurance expense 3,000 Note payable, due 6/30/1970,000 Prepaid insurance (12-month policy)  6,000 Rent expense 17,000 Retained earnings (1/1/18)  60,000 Salaries and wages expense 32,000 Service revenue 13,000 Supplies 4,000 Supplies expense 6,000 Equipment 210,000\begin{array}{lr}\text { Accounts payable } & 18,000 \\\text { Accounts receivable } & 11,000 \\\text { Accumulated depreciation - equipment } & 28,000 \\\text { Advertising expense } & 21,000 \\\text { Cash } & 15,000 \\\text { Common stock } & 42,000 \\\text { Dividends } & 14,000 \\\text { Depreciation expense } & 12,000 \\\text { Insurance expense } & 3,000 \\\text { Note payable, due } 6 / 30 / 19 & 70,000\\\text { Prepaid insurance (12-month policy) } & 6,000 \\\text { Rent expense } & 17,000 \\\text { Retained earnings (1/1/18) } & 60,000 \\\text { Salaries and wages expense } & 32,000 \\\text { Service revenue } & 13,000 \\\text { Supplies } & 4,000 \\\text { Supplies expense } & 6,000 \\\text { Equipment } & 210,000\end{array} The current assets should be listed on Postal Service's balance sheet in the following order:


A) cash, accounts receivable, prepaid insurance, equipment.
B) cash, prepaid insurance, supplies, accounts receivable.
C) cash, accounts receivable, prepaid insurance, supplies.
D) equipment, supplies, prepaid insurance, accounts receivable, cash.

E) B) and D)
F) A) and B)

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The first item listed under current liabilities is usually


A) accounts payable.
B) notes payable.
C) salaries and wages payable.
D) taxes payable.

E) A) and B)
F) None of the above

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Closing entries are made


A) in order to terminate the business as an operating entity.
B) so that all assets, liabilities, and stockholders' equity accounts will have zero balances when the next accounting period starts.
C) in order to transfer net income (or loss) and dividends to the retained earnings account.
D) so that financial statements can be prepared.

E) None of the above
F) B) and C)

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The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.

A) True
B) False

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All of the following are property, plant, and equipment except


A) supplies.
B) machinery.
C) land.
D) buildings.

E) B) and C)
F) A) and B)

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Under IFRS


A) comparative prior-period information must be presented, but financial statements need not be provided annually.
B) comparative prior-period informaton must be presented, and financial statements must be provided annually.
C) comparative prior-period information is not required, and financial statements need not be provided annually.
D) comparative prior-period information is not required, but financial statements must be provided annually.
IFRS.

E) A) and B)
F) B) and C)

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The following information is available for Elwes Company for the year ended December 31, 2018: The following information is available for Elwes Company for the year ended December 31, 2018: Instructions Use the above information to prepare a classified balance sheet for the year ended December 31, 2018. Instructions Use the above information to prepare a classified balance sheet for the year ended December 31, 2018.

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At April 1, 2018, Spiderland Company reported a balance of $20,000 in the Retained Earnings account. Spiderland Company earned revenues of $50,000 and incurred expenses of $32,000 during April 2018. The company paid dividends of $10,000 during the month. (a) Prepare the entries to close Income Summary and the Dividends acccount at April 30, 2018. (b) What is the balance in Retained Earnings on the April 30, 2018 post-closing trial balance?

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blured image (b) $2000...

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


A) Expenses are closed to the Expense Summary account.
B) Only revenues are closed to the Income Summary account.
C) Revenues and expenses are closed to the Income Summary account.
D) Revenues, expenses, and the dividends account are closed to the Income Summary account.

E) A) and B)
F) All of the above

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The income statement for the month of June, 2018 of Camera Obscura Enterprises contains the following information:  Revenues $7,000 Expenses:  Salaries and Wages Expense $3,000 Rent Expense 1,500 Advertising Expense 800 Supplies Expense 300 Insurance Expense 100 Total expenses 5,700 Net income $1,300\begin{array}{lr}\text { Revenues }&&\$7,000\\\text { Expenses: }\\\text { Salaries and Wages Expense } & \$ 3,000 \\\text { Rent Expense } & 1,500 \\\text { Advertising Expense } & 800 \\\text { Supplies Expense } & 300 \\\text { Insurance Expense } & 100\\\text { Total expenses }&&5,700\\\text { Net income }&&\$1,300\end{array} The entry to close the revenue account includes a


A) debit to Income Summary for $1,300.
B) credit to Income Summary for $1,300.
C) debit to Income Summary for $7,000.
D) credit to Income Summary for $7,000.

E) A) and D)
F) None of the above

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The ______________ of a company is the average time that it takes to purchase inventory, sell it on account, and then collect cash from customers.

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