Chapters 6, TEST 6A



Chapter 6, TEST 6A

Name _________________________

Date _________________________

SCORING RECORD

| |Total Possible | |Student |

|Section | |Deductions |Score |

|A |30 | | |

|B |30 | | |

|C |10 | | |

|D |30 | | |

|Total |100 | | |

Section A

DIRECTIONS: Each of the following statements is true or false. Indicate your choice by writing in the Answers column T for a true answer or F for a false answer. (2 points for each correct answer)

For

Answers Scoring

1. If there are no additional investments, the Balance

Sheet supplies all the necessary information to

prepare the financial statements. _____ _____

2. An Income Statement summarizes revenue, expenses

and owners withdrawals. _____ _____

3. The Balance Sheet columns of the work sheet

provide all of the information needed to prepare

a Statement of Owner's Equity unless there are

additional investments. _____ _____

4. Current assets include cash and assets that

will be converted into cash within one year. _____ _____

5. Long-term liabilities are liabilities that

require the use of current assets. _____ _____

6. The amounts in the financial statements must

agree with the ledger account balances. _____ _____

7. A classified balance sheet groups similar items

together. _____ _____

8. Revenues, expenses, and drawing accounts are

permanent accounts. _____ _____

9. Temporary accounts accumulate information

across accounting periods. _____ _____

10. Closing entries are made in the journal and

posted to the ledger accounts. _____ _____

11. To close a revenue account with a credit

balance, debit the account for its balance and

credit the income summary account. _____ _____

12. The income summary account appears on the income

statement at the end of the accounting period. _____ _____

13. Adjusting entries must be recorded and posted

before closing entries. _____ _____

14. The steps involved in accounting for business

activities during an accounting period is

referred to as the accounting cycle. _____ _____

15. After posting the closing entries, a post-

closing trial balance should be prepared. _____ _____

Section B

Directions: Complete each of the following statements by writing in the Answers column the letter of the word or words that correctly completes each statement. (3 points each)

For

Answers Scoring

1. The body of the balance sheet consists of an

itemized list of: (A) assets and liabilities;

(B) assets and owner's equity; (C) cash and

revenues; (D) revenues and expenses;

(E) assets, liabilities, and owner's equity. _____ _____

2. The owner's equity in a business amounted to

$10,000 at the beginning of the year; $15,000

at the end of the year; and the owner had

withdrawn $25,000 and made no additional

investments during the year. The net income

for the year amounted to: (A) $10,000;

(B) $15,000; (C) $25,000; (D) $30,000;

(E) $40,000. _____ _____

3. The revenue for the month amounted to $30,000,

total expenses amounted to $17,500, and

withdrawals totaled $4,500. The net income

for the month is: (A) $4,500; (B) $8,000

(C) $12,500; (D) $17,500; E) $30,000. _____ _____

4. The statement of owner's equity includes

information based on: (A) the capital and

drawing accounts; (B) the liabilities of the

business; (C) the amount of net income or net

loss; (D) A and C; (E) B and C. _____ _____

5. After the accounts are closed and the journal

entries have been posted, the following account

would have a balance: (A) Payroll Tax Expense;

(B) Accumulated Depreciation; (C) Professional Fees;

(D) Drawing; (E) Sales. _____ _____

6. The account to which the Income Summary account is

closed is called: (A) Revenue; (B) Drawing;

(C) Capital; (D) Cash; (E) Cost. _____ _____

7. The journal entry to close the drawing account

includes: (A) debiting the Income Summary and

crediting the Drawing account; (B) debiting the

Capital and crediting the Drawing account;

(C) crediting the Capital account and debiting

the Drawing account; (D) debiting the Drawing

account and crediting the Income Summary;

(E) debiting Cash and crediting the Drawing

account. _____ _____

8. What is the correct sequence for closing the

temporary accounts? (A) revenue accounts,

expense accounts, Income Summary, Drawing;

(B) expense accounts, revenue accounts, Income

Summary, Drawing; (C) revenue accounts, expense

accounts, Drawing, Income Summary; (D) Drawing,

revenue accounts, expense accounts, Income

Summary; (E) Net Income, Drawing, Income Summary. _____ _____

9. To prove the equality of the debit and credit

balances in the general ledger accounts after

the closing entries have been journalized and

posted the following is prepared: (A) Trial

Balance; (B) Balance Sheet; (C) Closing

Statement; (D) Post-closing trial balance;

E. (E) Work Sheet. _____ _____

10. What is the purpose of the post-closing trial

balance? (A) to prove no errors were made

while recording entries in the journal; (B)

to prove the closing entries were recorded

correctly in the journal; (C) to prove the

equality of the debit and credit balances in

the general ledger accounts; (D) to prove the

balances in the general ledger accounts are

correct; (E) none of these. _____ _____

Section C

DIRECTIONS: Indicate which of the following ledger accounts are temporary, using T, or permanent using P. (2 points each)

For

Answers Scoring

A. Accounts Payable _____ _____

B. S. Jones, Drawing _____ _____

C. Income Summary _____ _____

D. Sales _____ _____

E. Insurance Expense _____ _____

Section D

DIRECTIONS: Using the following T accounts, prepare closing entries in general journal form dated July 31, 20__. Then post the closing entries to the T accounts.

Accum. Depreciation Wages Utilities

Computer Equipment 181.1 Expense 511 Expense 533 Bal. 480 Bal. 8,700 Bal. 398

Wages Advertising Insurance

Payable 219 Expense 512 Expense 535

Bal. 3,100 Bal. 141 Bal. 460

Clyde Gray, Rent Gas and Oil

Capital 311 Expense 521 Expense 538

Bal. 25,000 Bal.4,100 Bal. 367

Clyde Gray, Supplies Deprec. Exp.-

Drawing 312 Expense 523 Computer Equip. 541

Bal. 3,000 Bal. 950 Bal. 480

Income Telephone Miscellaneous

Summary 313 Expense 525 Expense 549

Bal. 544 Bal. 400

Service

Fees 401

Bal.15,820

GENERAL JOURNAL

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