Question : 121. Financial statements typically prepared in the following order: A. Balance sheet, statement : 1256795

 

 

121. Financial statements are typically prepared in the following order: 

A. Balance sheet, statement of retained earnings, income statement.

B. Statement of retained earnings, balance sheet, income statement.

C. Income statement, balance sheet, statement of retained earnings.

D. Income statement, statement of retained earnings, balance sheet.

E. Balance sheet, income statement, statement of retained earnings.

 

 

122. Which of the following statements regarding financial statement preparation is false? 

A. Financial statements can be prepared from information in the adjusted trial balance.

B. The Sarbanes-Oxley Act requires that financial statements filed with the Securities and Exchange Commission include declarations by the CEO and CFO of the company.

C. It makes sense to prepare the balance sheet first because it contains information needed on the income statement.

D. When preparing financial statements an adjusted trial balance is easier to work with than the entire ledger.

E. The income statement is prepared first.

 

 

123. The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the retained earnings account is the: 

A. Income Summary account

B. Closing account

C. Balance column account

D. Contra account

E. Nominal account

 

 

124. Awn Services paid a dividend of $8,700 during the current year. The entry to close the dividend account at the end of the year is: 

 

A.

Dividends

8,700

 

Cash

 

8,700

 

B.

Retained earnings

8,700

 

Dividends

 

8,700

 

C.

Dividends

8,700

 

Retained earnings

 

8,700

 

D.

Common Stock

8,700

 

Dividends

 

8,700

 

E.

Income Summary

8,700

 

Retained earnings

 

8,700

 

 

 

125. A company had revenues of $75,000 and expenses of $62,000 and paid $1,000 dividends duringthe accounting period. Which of the following entries could not be a closing entry for this company? 

A.

Income Summary

13,000

 

Retained earnings

 

13,000

 

B.

Income Summary

75,000

 

Revenues

 

75,000

 

C.

Revenues

75,000

 

Income Summary

 

75,000

 

D.

Income Summary

62,000

 

Expenses

 

62,000

 

E.

Retained Earnings

1,000

 

Dividends

 

1,000

 

 

 

126. The following information is available for the Travis Travel Agency. After the closing entries have been journalized and posted, what will be the balance in the Retained Earnings account?

 

Total revenues

$125,000

Total expenses

60,000

Retained earnings

80,000

Dividends

15,000

 

A. $65,000

B. $80,000

C. $130,000

D. $145,000

E. $280,000

 

 

127. The Retained Earnings account has a credit balance of $17,000 before closing entries are made. If total revenues for the period are $55,200, total expenses are $39,800 and dividends are $9,000, what is the ending balance in the Retained Earnings account after all closing entries are made? 

A. $8,000

B. $15,400

C. $23,400

D. $17,000

E. $32,400

 

 

128. The Income Summary account is used: 

A. To adjust and update asset and liability accounts.

B. To close the revenue and expense accounts.

C. To determine the appropriate dividend amount.

D. In some situations to replace the income statement.

E. To replace the retained earnings account in some businesses.

 

 

 

129. A company’s ledger accounts and their end-of-period balances before closing entries are posted are shown below. What amount will be posted to Retained Earnings in the process of closing the Income Summary account? (Assume all accounts have normal balances.)

 

Retained earnings

$ 7,000

Dividends

9,600

Service Revenue

29,000

Rent expense

3,600

Salaries expense

7,200

Insurance expense

920

Depr. Expense – equipment

500

Accumdepr. – equipment

1,500

 

A. $16,780 debit

B. $7,180 credit

C. $16,780 credit

D. $18,280 credit

E. $23,780 credit

 

 

 

130. 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