Questions and Answers of Glencoe Accounting First Year Course

The chart of accounts for Outback Guide Service follows. Instructions1. In your working papers, open an account in the general ledger for each account in the chart of accounts.2. Record the
An auditor reviewed the accounting records of Showbiz Video. The auditor wrote a list of transactions, outlined below, describing the errors discovered in the March records. The general journal for
a. Preparing the work sheet is which step of the accounting cycle?b. What is the purpose of the work sheet?
Predict what would happen if a revenue account balance were not extended to the Income Statement section of the work sheet.
A net loss will appeara. In the debit column of the Income Statement on the work sheet.b. In the credit column of the Income Statement on the work sheet.c. In the debit column of the Trial Balance.d.
The general ledger for Hot Suds Car Wash shows the following account balances on May 31, the end of the period.InstructionsPrepare a work sheet for Hot Suds Car Wash in your working papers.
Why is the net income amount entered in the Credit column of the Balance Sheet section? Why is net loss entered in the Debit column?
The amount of net income for the period is added to the Balance Sheet credit total because it increases the balance in the ________ account.a. Accounts receivableb. Accounts payablec. Assetd. Capital
a. Explain how to record net income or net loss on the work sheet.b. How does net income affect owner’s equity? How does net loss affect owner’s equity?
The ending balances in the general ledger accounts of Wilderness Rentals for the period ended May 31 follow. InstructionsPrepare a work sheet for the period ended May 31.1. Write the heading on
The following accounts have balances and appear in the Account Name section of the work sheet for Lee’s Bike Shop.InstructionsUse a form similar to the one below in your working papers or on a
What items do you need to complete the six-column work sheet? Include office supplies and forms as well as any information that will be needed.
Revenue and expense accounts are listed in the Trial Balance section of the work sheet and in the ________ of the work sheet.a. Retained Earnings statementb. Balance Sheet sectionc. Income Statement
a. Which section of the work sheet should you complete first?b. Why are all accounts, including those with zero balances, listed on the work sheet?
Based on the invoice presented here, answer the following questions in your working papers. 1. Which company shipped the supplies?2. Which company ordered the supplies?3. On what date were the
How would an organizational chart that depicts who reports to whom help with the transition?
Explain why the Trial Balance section is completed first.
The asset, liability, and owner’s equity accounts are extended to the ________ of the work sheet.a. Balance Sheet sectionb. Income Statement sectionc. Retained Earnings statementd. Trial Balance
a. Name and briefly describe the five sections of a six-column worksheet.b. List the items that are included in the work sheet heading.
You just finished the work sheet for the third quarter and it looks like your company will make a considerable profit. In the second quarter, the company had a net loss. On a separate sheet of paper,
A(n) ________ results when revenue is larger than expenses.a. Debitb. Net incomec. Net lossd. Credit
Name the types of accounts whose balances are extended to the Income Statement section of the work sheet.
You work for Creative Advertising as an assistant to the company’s accountant. You are preparing a work sheet for the month of July. The trial balance totals are $127,750, and you have extended the
The following accounts appear on the work sheet for Lee’s Bike Shop.Use a form similar to the one below in your working papers. Classify each account and use an “X” to indicate whether the
Imagine that you are employed as an auditor for a public accounting firm like PricewaterhouseCoopers. You and a co-worker, Mark, have been sent to Chicago to perform an audit. You have an allowance
The account balances in the general ledger of Kits & Pups Grooming at the end of May are: InstructionsPrepare a work sheet for the month ended May 31 for Kits & Pups Grooming in your
What is the value of the matching principle?
a. List the sections of the income statement.b. How is net income or net loss calculated?
a. What is the purpose of the income statement?b. What is the source of information used to prepare the income statement?
As a game store owner, you want to develop an information sheet for the store manager. Explain the importance of financial statement preparation using these key terms. balance sheet current
The balance sheet shows how a business is doinga. For a period of 12 months.b. On a specific date during the year.c. Regarding its profit or loss.d. All of the above
Name the one piece of information that is included on both the income statement and the statement of changes in owner’s equity.
Taki Yamamoto owns a video arcade business called Arcadia. Taki has hired your accounting firm to record Arcadia’s financial information. Taki hands you a folder containing these documents:•
Based on the receipt shown here, answer the following questions in your working papers.1. What is the name of the business that received the money?2. How much money was received?3. Who paid the
Financial statements are prepared in the following order:a. Income statement, balance sheet, owners’ equity.b. Income statement, statement of owners’ equity, balance sheet.c. Statement of
Use the balance sheet and income statement shown to prepare a statement of changes in owner’s equity. (The owner made an additional investment of $4,000 and withdrew $1,500 during the
Your favorite uncle, who owns a restaurant, has asked you to help with his bookkeeping. He desperately needs a bank loan and wants you to prepare the financial statements. After going over his
The work sheet for Wilderness Rentals for the month ended September 30, 20-- is in your working papers. Using the work sheet, prepare an income statement for Wilderness Rentals.
The balance sheet reports the balances in the permanent accounts at the end of the period. It states the financial position of a business on a specific date. Information comes from the Balance Sheet
a. What is the purpose of the balance sheet?b. How does the date in a balance sheet heading differ from the other financial statements?
During the month of February, Tom had the following transactions involving revenue and expenses:Paid $75 phone billProvided services to clients for $1,200 cashPaid salaries of $650 to employeesPaid
What items are needed to complete the first three financial statements? List office supplies, forms, and any information needed.
a. What is the purpose of the statement of cash flows?b. Why does management need the information in the statement of cash flows?
The statement of cash flows reports how much cash the business took in and paid out during the period and why the Cash in Bank account increased or decreased.
a. What sources of information are used to prepare the balance sheet?b. How are balance sheet account names shown using the report form?
Assess the value of using the income statement, the statement of changes in owner’s equity, and the balance sheet for making business decisions.
Explain why the date line on the balance sheet is different from the one on the other statements.
The financial transactions affecting the capital accounts of several different businesses are summarized below. Beginning Capital 1. $60,000 2.
The statement of changes in owner’s equity summarizes the impact that the period’s business transactions had on the capital account.
a. What is the purpose of the statement of changes in owner’s equity?b. What sources of information are used to prepare the statement of changes in owner’s equity?
The purpose of the Income Statement is to reporta. All assets, liabilities, and owner’s equity at a specified time. b. all the accounts used in journalizing a business’s transactions.c. Balances
The net income computed on the income statement is different from the amount computed on the work sheet. How do you resolve this problem?
The Gawle Company is a family-owned and operated appliance rental and repair business. The income statement for the month ended August 31 includes the following: Calculate the return on sales
a. In a statement of changes in owner’s equity, what items are totaled in the “Add” section?b. What items are subtracted from the subtotal?
At the end of a fiscal period when a balance sheet is prepared, from which document may we find the ending owner’s capital balance?a. Worksheetb. Trial Balancec. Income Statementd. Statement of
Explain why the Withdrawals account is reported on the statement of changes in owner’s equity but is not reported on the income statement.
Computer viruses “reproduce” themselves in computer programs, slowing the system or destroying data. A friend gives you a computer game with a harmless virus. To add some fun at work, you load
The trial balance for the Hot Suds Car Wash is listed below and in your working papers. 1. Complete the work sheet in your working papers.2. Prepare an income statement for the quarter ended
The general ledger accounts and balances for Kits & Pups Grooming follow. 1. Prepare a work sheet for the month ended September 30, 20--.2. Prepare an income statement for the period.3.
a. What is the purpose of computing ratios from amounts on financial statements?b. Who might be interested in the profitability ratio of a business?
Prepare closing entries for the following in your working papers.1. A closing entry must be made for the account Ticket Revenue, which has a balance of $6,000.2. A business has three expense
The eighth step in the accounting cycle is to journalize and post the closing entries:• Closing is the process of transferring the balances in the temporary accounts to the owner’s capital
On a separate sheet of paper, write a brief definition for each of the following terms. closing entries compound entry Income Summary account post-closing trial balance
a. Which accounts are considered temporary accounts?b. Why are temporary accounts closed at the end of the fiscal year?
Which of the following accounts needs no closing entries?a. Capitalb. Supplies Expensec. Fees Owedd. All of the above
Why are the temporary accounts closed to the owner’s capital account at the end of the accounting period?
At the end of December, the general ledger for Job Connect showed the following account balances:Using the preceding account names and balances:1. Prepare the six-column work sheet. The period
The general ledger for Show biz Video shows the following at December 31:Using the preceding account names and balances:1. Prepare the six-column work sheet. The period covered is one month.2.
What items do you need to journalize the closing entries? Include office supplies and forms as well as any information that will be needed.
Which of the following will not appear on a post-closing trial balance?a. Accounts Payableb. Salesc. Owner’s Capitald. Cash
Prepare four closing entries:a. Close the revenue account(s) to Income Summary.b. Close the expense accounts to Income Summary. c. Close Income Summary to the owner’s capital account. d.
a. What is the source of information for the closing entries? b. List the steps for journalizing the closing entries.
A portion of the work sheet for Wilderness Rentals for the period ended December 31 follows. Using the information from the work sheet, prepare the journal entries to close the temporary
Make the closing entries for (a) a $5,000 net income for the year ending December 31 and (b) a $4,000 net loss for the quarter ending June 30.
Using the source document:1. Journalize the transaction in a general journal in your working papers.2. Post the entry to the appropriate T accounts.3. Assume it is the end of the accounting period.
The Income Summary account has two purposes:• To accumulate the revenue and expenses for an accounting period, and• To summarize the revenue and expenses for an accounting period.
a. What is the purpose of the Income Summary account?b. How does the Income Summary account differ from the other temporary accounts?
After adjusting and closing entries have been posted,a. Balance sheet is prepared.b. Trial balance is prepared.c. Post-closing balance sheet is prepared.d. Post-closing trial balance is prepared.
The following list contains some of the accounts used by Living Well Health Spa.Using the form in your working papers:1. In the first column, indicate the financial statement where each account
Income Summary is a temporary owner’s equity account used to record net income or net loss:• A credit balance (net income) in Income Summary increases capital.• A debit balance (net loss)
a. Explain the relationship between the Income Summary account and the capital account.b. Why doesn’t the Income Summary account have a normal balance?
The Capital account balance minus the net loss minus the Drawing account balance equalsa. Net loss.b. Total liabilities.c. The capital amount shown on a balance sheet.d. The capital amount shown on
Compare and contrast the closing entry for an expense account and the closing entry for the withdrawals account.
Use the accounts shown on the next two pages to prepare a Dec. 31 post-closing trial balance for Hot Suds Car Wash. Cash in Bank Credit Accounts Receivable- Valley Auto Debit Credit + Balance
After the closing entries have been journalized, follow this procedure:• Post them to the general ledger.• For each posted entry, enter the words Closing Entry in the Description column of the
a. Classify the Income Summary account (asset, liability, owner’s equity, revenue, or expense).b. How is the posting procedure for closing entries different from the posting procedure for other
At the end of the fiscal period, the income summary account shows a credit balance of $3,500. This income summary account balance will be closed out to which account?a. A debit to owner’s capitalb.
What is the value of preparing a post-closing trial balance?
The ninth step in the accounting cycle is to prepare a post-closing trial balance. Only the permanent accounts are listed on the post-closing trial balance. Roadrunner Delivery Service Post-Closing
Period ending December 31 closing entries for Outback Guide Service are: Using your working papers, post the closing entries to the appropriate general ledger accounts and prepare a post-closing
a. What is the purpose of the post-closing trial balance?b. Why does the post-closing trial balance have balances of only permanent accounts?
A business in which two or more persons combine their assets is called a(an) a. Corporation.b. Sole proprietorship.c. Partnership.d. Merchandising business.e. None of these answers.
The characteristics or traits needed to set up an owner-operated business and to run it successfully are listed below. Rank yourself, indicating whether this trait is most like you or least like you.
The three types of business operations follow:• Service businesses provide needed services, such as medical, legal, hair styling, and lawn mowing, for a fee.• Merchandising businesses buy
a. Name and describe the three types of business operations.b. What is the major difference between a merchandising business and a manufacturing business?
An example of an accounting assumption is a(n) a. Accounting system.b. Accounting statement.c. Going concern.d. Computerized accounting.
What is the difference between a sole proprietorship and a partnership?
Interview two or three local entrepreneurs. If you need help finding entre preneurs, contact your local chamber of commerce or other business organizations.Conduct the interviews, and then write a
Imagine that you work for a local day-care center. You attend a company meeting to discuss new services that would help the center stand out from its competition. You think you can use the services
Mr. Tirado has read the memo and wants to talk with you. Pair up with another student and role-play the conversation, one of you as the accounting clerk, the other as Mr. Tirado. Discuss how you will

Showing 800 - 900 of 968