Question : 123.Kline Company accrued wages of $7,350 that were earned by : 1236870

123.Kline Company accrued wages of $7,350 that were earned by employees unpaid at the end of 2014. Assuming Kline uses reversing entries, which of the following entries is appropriate for reversing the accrued wages at the beginning of 2015?   

A.Debit Wages Expense $7,350; credit Cash $7,350.

B.Debit Wages Expense $7,350; credit Wages Payable $7,350.

C.Debit Wages Payable $7,350; credit Cash $7,350.

D.Debit Cash $7,350; credit Wages Expense $7,350.

E.Debit Wages Payable $7,350; credit Wages Expense $7,350.

124.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 should not be the exact opposite of previous period adjusting entries.

125.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 temporarily 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.

126.The purpose of reversing entries is to:   

A.Simplify a company’s recording of certain journal entries in the future.

B.Correct errors made in previous journal entries.

C.Ensure that closing entries have been properly posted to the ledger accounts.

D.Make certain that only permanent accounts are carried forward into the next accounting period.

E.Complete a required step in the accounting cycle.

127.All of the following statements regarding a work sheet are true except:   

A.A worksheet aids in the preparation of financial statements.

B.A worksheet reduces possible errors when working with many accounts and adjustments.

C.A worksheet is not useful in planning and organizing an audit of financial statements.

D.A worksheet helps in preparing interim financial statements.

E.A worksheet shows the effects of proposed or “what-if” transactions.

128.All of the following statements regarding the Income Statement columns on the worksheet are true except:   

A.The balances in the Income Statement credit column are revenues.

B.The balances in the Income Statement credit column are unearned revenues.

C.The balances in the Income Statement debit column are expenses.

D.The difference between the totals of the Income Statement columns is net income or net loss.

E.The net income or net loss from the Income Statement columns is entered in the Balance Sheet & Statement of Owner’s Equity columns.

129.Temporary accounts include all of the following except:   

A.Consulting revenue.

B.Withdrawals.

C.Rent expense.

D.Prepaid rent.

E.Income Summary.

130.Permanent accounts include all of the following except:   

A.Accumulated Depreciation—Equipment.

B.Prepaid Insurance.

C.Unearned Revenue.

D.Accounts Receivable.

E.Depreciation Expense—Equipment.

131.Which of the following statements about a company’s operating cycle is not true:   

A.Non-current items are those expected to come due within one year or the company’s operating cycle.

B.The operating cycle is the time span from when cash is used to acquire goods and services until cash is received from the sale of goods and services.

C.The length of a company’s operating cycle depends on its activities.

D.For a merchandiser selling products, the operating cycle is the time span between paying suppliers for merchandise and receiving cash from customers.

E.Most operating cycles are less than one year.

132.Which of the following types of businesses might have an operating cycle longer than one year?   

A.Ski resort.

B.Clothing retailer.

C.Florist.

D.Wheat farmer.

E.Commercial airplane manufacturer.