86) Determine the beginning owner’s equity of a business having an ending owner’s equity of $6,200, withdrawals of $2,250, and after closing the revenues and expenses, the Income Summary account has a debit balance of $3,500.
87) Why will the Income Summary account never appear on a financial statement?
88) Determine the beginning assets of a business having ending liabilities of $4,000, the liabilities decreased by $1,500 during the year, an ending owner’s equity of $10,700, additional investments of $2,000, withdrawals of $15,600, and after closing the revenues and expenses the Income Summary account has a credit balance of $6,800.
5.3 Learning Objective 5-3
1) The final step in the accounting cycle is:
A) preparing the post-closing trial balance.
B) preparing the financial statements.
C) journalizing the closing entries.
D) journalizing the adjusting entries.
2) Which of the following sequence of actions describes the proper order in the accounting cycle?
A) Journalize, post, close, prepare financial statements, adjust, and analyze transactions
B) Prepare financial statements, journalize, post, adjust, analyze transactions, close
C) Analyze transactions, journalize, post, adjust, prepare financial statements, close
D) Post, close, prepare financial statements, adjust, analyze transactions, and journalize
3) In the normal accounting cycle the:
A) financial statements are prepared after the adjusting entries are posted.
B) financial statements are prepared before the adjusting entries are posted.
C) adjusting and closing entries are journalized before the financial statements are prepared.
D) post-closing trial balance is prepared before the closing entries are posted.
4) Of the following accounts, which might appear in the adjusted trial balance, but not in the post-closing trial balance?
A) Income Summary
B) Owner’s Capital
C) Accounts Payable
D) Depreciation Expense
5) Which of the following accounts would appear on the post-closing trial balance?
A) Fees Earned
B) Rent Expense
C) Owner’s Capital
D) Income Summary
6) After closing the revenue and expense accounts, Income Summary showed a debit balance of $2,000. Which of the following statements is true?
A) The company had a net loss of $2,000.
B) The company had a net income of $2,000.
C) The company’s cash increased $2,000.
D) None of these answers are correct.
7) The trial balance prepared after all of the temporary accounts have been closed is called a post-closing trial balance.
8) The Income Summary account can be found on the worksheet.
9) The post-closing trial balance contains the true ending figure for Capital.
10) The post-closing trial balance is used to determine if the ledger is in balance after closing.