Question :
101. At the beginning of the year, a company’s balance sheet : 1225769
101. At the beginning of the year, a company’s balance sheet reported the following balances: Total Assets = $125,000; Total Liabilities = $75,000; and Owner’s Capital = $50,000. During the year, the company reported revenues of $46,000 and expenses of $30,000. In addition, owner’s withdrawals for the year totaled $20,000. Assuming no other changes to owner’s capital, the balance in the owner’s capital account at the end of the year would be:
A. $66,000.
B. $86,000.
C. $(4,000).
D. $46,000.
E. $54,000.
102. At the beginning of the year, Beta Company’s balance sheet reported Total Assets of $195,000 and Total Liabilities of $75,000. During the year, the company reported total revenues of $226,000 and expenses of $175,000. Also, owner withdrawals during the year totaled $48,000. Assuming no other changes to owner’s capital, the balance in the owner’s capital account at the end of the year would be:
A. $174,000.
B. $78,000.
C. cannot be determined from the information provided.
D. $120,000.
E. $123,000.
103. After preparing and posting the closing entries to close revenues (and gains) and expenses (and losses), the income summary account has a debit balance of $33,000. The entry to close the income summary account will include:
A. a debit of $33,000 to owner withdrawals.
B. a credit of $33,000 to owner withdrawals.
C. a debit of $33,000 to income summary.
D. a debit of $33,000 to owner capital.
E. a credit of $33,000 to owner capital.
104. A trial balance prepared after the closing entries have been journalized and posted is the:
A. Unadjusted trial balance.
B. Post-closing trial balance.
C. General ledger.
D. Adjusted trial balance.
E. Work sheet.
105. An error is indicated if the following account has a balance appearing on the post-closing trial balance:
A. Office Equipment.
B. Accumulated Depreciation-Office Equipment.
C. Depreciation Expense-Office Equipment.
D. Ted Nash, Capital.
E. Salaries Payable.
106. A post-closing trial balance reports:
A. All ledger accounts with balances, none of which can be temporary accounts.
B. All ledger accounts with balances, none of which can be permanent accounts.
C. All ledger accounts with balances, which include some temporary and some permanent accounts.
D. Only revenue and expense accounts.
E. Only asset accounts.
107. Which of the following statements is true?
A. Owner’s capital must be closed each accounting period.
B. A post-closing trial balance should include only permanent accounts.
C. Information on the work sheet can be used in place of preparing financial statements.
D. By using a work sheet to prepare adjusting entries you need not post these entries to the ledger accounts.
E. Closing entries are only necessary if errors have been made.
108. Reversing entries:
A. Are optional.
B. Are mandatory.
C. Correct errors in journal entries.
D. Are required by GAAP.
E. Are prepared on the worksheet.
109. All of the following regarding reversing entries are true except:
A. Reversing entries are optional.
B. Reversing entries are recorded in response to accrued assets and accrued liabilities that were created by adjusting entries at the end of the previous accounting period.
C. Reversing entries are used to simplify a company’s recordkeeping.
D. Reversing entries are dated the first day of the new accounting period.
E. Reversing entries are not the exact opposite of adjusting entries.
110. Reversing entries:
A. are necessary when journal entries have been incorrectly recorded.
B. are a required step in the accounting cycle.
C. will often result in abnormal account balances in some accounts.
D. are required only if the company uses accounting software to record journal entries.
E. must be made before preparing the post-closing trial balance.
