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Horngren’s Accounting, Vol. 1, Cdn. Ed., 11e (Miller-Nobles) Chapter 4 Completing the Accounting Cycle Objective 4-1 1) The worksheet is used only for accounts that are adjusted. Answer: FALSE Type: TF CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Understand 2) The unadjusted trial balance columns of a worksheet contain the account balances that appear on the financial statements. Answer: FALSE Type: TF CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Procedural Cognitive Taxon.: Understand 3) On the worksheet, the difference between the balance sheet debit column and the balance sheet credit column represents the net income or net loss. Answer: TRUE Type: TF CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Analyze 4) On a worksheet, the sum of the income statement debit column exceeds the sum of the income statement credit column. This indicates the company generated a net income during the current period. Answer: FALSE Type: TF CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Factual Cognitive Taxon.: Analyze

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5) On a worksheet, the sum of the income statement debit column exceeds the sum of the income statement credit column. This indicates the company generated a net loss during the current period. Answer: TRUE Type: TF CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Factual Cognitive Taxon.: Analyze 6) The worksheet is the financial statement that must be prepared before all of the others. Answer: FALSE Type: TF CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Remember 7) A worksheet is a: A) formal document shown with a company's annual report. B) formal document required by the Canada Revenue Agency. C) formal document required by creditors. D) multicolumn document used by accountants to aid in the preparation of the financial statements. Answer: D Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Remember 8) All of the following statements regarding a worksheet are true except: A) it provides an orderly way to summarize the data for the financial statements. B) it is a multicolumn document, which helps move data from the trial balance to the financial statements. C) it replaces the adjusting entries in the general journal. D) it aids the closing process by listing the adjusted balance of all accounts. Answer: C Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Understand

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9) All of the following are listed on a worksheet except: A) a debit and credit column for a statement of owner's equity. B) a debit and credit column for an income statement. C) a debit and credit column for a balance sheet. D) a debit and credit column for adjustments. Answer: A Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Understand 10) The income statement debit column exceeds the income statement credit column on a worksheet. This indicates: A) a net income for the company. B) a net loss for the company. C) that mistakes were made in the preparation of the worksheet. D) the owner's capital account increased during the period. Answer: B Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Evaluate 11) Net income appears on the worksheet: A) only in the balance sheet credit column. B) only in the income statement credit column. C) in the income statement debit column and balance sheet debit column. D) in the income statement debit column and balance sheet credit column. Answer: D Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Evaluate

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12) Net loss appears on the worksheet: A) in the income statement credit column and balance sheet debit column. B) only in the income statement credit column. C) in the income statement debit column and balance sheet credit column. D) only in the balance sheet debit column. Answer: A Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Evaluate 13) The prepaid rent account has a balance that is $400 less in the worksheet's balance sheet debit column than in the worksheet's trial balance debit column. This would be the result of a: A) $400 entry to prepaid rent in the worksheet's adjustments debit column. B) $400 entry to prepaid rent in the worksheet's adjustments credit column. C) $400 entry to rent expense in the worksheet's adjustments credit column. D) mistake in cross-adding the worksheet. Answer: B Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Evaluate 14) Salary expense has a balance of $65,400 in the trial balance debit column of a worksheet. The adjustments credit column contains a $500 credit to salary payable. The adjusted trial balance column will show: A) salary expense with a debit balance of $64,900. B) salary expense with a debit balance of $65,400. C) salary expense with a debit balance of $65,900. D) salary payable with a credit balance of $65,900. Answer: C Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Evaluate

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15) Interest expense on a worksheet's trial balance debit column has a $3,400 balance and a $4,000 balance on the worksheet's income statement debit column. The difference is due to: A) an entry in the adjustments credit column for $600 to interest expense. B) an entry in the adjustments debit column for $4,000 to interest expense. C) an entry in the adjustments credit column for $4,000 to interest expense. D) an entry in the adjustments credit column for $600 to interest payable. Answer: D Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Evaluate 16) On a worksheet, the income statement debit column equals $190,800 and the income statement credit column equals $195,600. From this data, it can be determined that: A) the company had a net loss of $4,800 added to the income statement credit column. B) the company had a net income of $4,800 added to the income statement debit column. C) the company had a net loss of $4,800 added to the income statement debit column. D) the company had a net income of $4,800 added to the income statement credit column. Answer: B Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Procedural Cognitive Taxon.: Evaluate 17) Which of the following appears in the balance sheet debit column of a worksheet? A) service revenue B) income summary C) owner withdrawals D) accounts payable Answer: C Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Understand

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18) Which of the following appears in the income statement credit column of a worksheet? A) service revenue B) income summary C) owner withdrawals D) accounts receivable Answer: A Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Understand 19) If the unearned service revenue account had an unadjusted normal balance of $4,800, and an adjustment was made debiting the account for $1,500, the account would appear on the adjusted trial balance of the worksheet as a: A) $4,800 debit. B) $6,300 credit. C) $3,300 credit. D) $3,300 debit. Answer: C Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Procedural Cognitive Taxon.: Apply 20) After all the account balances have been extended to the balance sheet columns of the worksheet, the totals of the debit and credit columns are $35,350 and $38,750, respectively. It can be concluded the company has a: A) net income of $3,400. B) net loss of $3,400. C) $74,100 net loss. D) $74,100 net income. Answer: B Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Evaluate

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21) After all the account balances have been extended to all columns of the worksheet, the totals of the debit and credit columns for the income statement columns are $35,350 and $38,750, respectively. It can be concluded the company has a: A) net income of $3,400. B) net loss of $3,400. C) $74,100 net loss. D) $74,100 net income. Answer: A Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Procedural Cognitive Taxon.: Analyze 22) If the prepaid rent account had an unadjusted normal balance of $13,400, and an adjustment was made crediting the account for $1,800, then the account would appear on the worksheet as a(n): A) $11,600 debit balance in the balance sheet columns. B) $1,800 credit balance in the income statement columns. C) $11,600 credit balance in the adjusted trial balance columns. D) $1,800 credit balance in the balance sheet columns. Answer: A Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Procedural Cognitive Taxon.: Analyze 23) Unearned service revenue has a balance that is $2,800 less in the worksheet's balance sheet credit column than in the worksheet's trial balance credit column. From this data, it can be determined that: A) unearned service revenue was credited for $2,800 in the adjustments columns. B) service revenue was debited for $2,800 in the adjustments columns. C) service revenue was credited for $2,800 in the adjustments columns. D) unearned service revenue was credited for $2,800 in the adjusted trial balance columns. Answer: C Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Procedural Cognitive Taxon.: Analyze

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24) After all of the account balances have been extended to the income statement columns of the worksheet, the totals of the debit and credit columns are $172,300 and $176,900, respectively. It can be concluded the company has a: A) net loss of $4,600. B) net income of $4,600. C) net income of $176,900. D) net loss of $176,900. Answer: B Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Evaluate 25) The net income or loss for the period is placed on the worksheet to balance which sets of columns? A) the adjusted trial balance and the income statement columns B) the income statement and the balance sheet columns C) the balance sheet and the adjusted trial balance columns D) the unadjusted trial balance and the adjusted trial balance columns Answer: B Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Procedural Cognitive Taxon.: Understand 26) Given the following totals for the financial statement columns on the worksheet, determine the net income or loss for the period:

A) $11,500 net income B) $2,700 net income C) $9,400 net loss D) $2,700 net loss Answer: B Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Procedural Cognitive Taxon.: Apply

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27) Given the following totals of the financial statements columns of the worksheet, determine the net income or loss for the period:

A) $5,300 net loss B) $1,750 net income C) $7,750 net income D) $1,750 net loss Answer: D Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Procedural Cognitive Taxon.: Apply 28) Accumulated amortization is found on the: A) trial balance credit column and income statement debit column of a worksheet. B) trial balance credit column, adjustments credit column, adjusted trial balance credit column, and balance sheet debit column of a worksheet. C) trial balance credit column, adjustments credit column, adjusted trial balance credit column, and balance sheet credit column of a worksheet. D) trial balance debit column, adjustments debit column, adjusted trial balance credit column, and income statement credit column of a worksheet. Answer: C Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Understand 29) An error has been made on the worksheet if: A) the trial balance columns and the adjusted trial balance columns are not equal. B) the income statement columns do not equal the balance sheet columns. C) the adjusted trial balance debit column and credit column do not equal. D) the unadjusted trial balance column is in balance. Answer: C Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Remember

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30) Accumulated amortization appears on the: A) balance sheet debit column of a worksheet. B) income statement credit column of a worksheet. C) income statement debit column and balance sheet credit column of a worksheet. D) adjusted trial balance credit column and balance sheet credit column of a worksheet. Answer: D Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Remember 31) "Unearned fees" appears on the: A) adjusted trial balance debit column and income statement credit column of a worksheet. B) adjusted trial balance debit column and balance sheet credit column of a worksheet. C) balance sheet credit column and adjusted trial balance credit column of a worksheet. D) "Unearned fees" does not appear on a worksheet. Answer: C Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Remember 32) Net income is entered onto which column(s) of a worksheet? A) adjusted trial balance debit column B) income statement debit and balance sheet credit C) income statement debit and balance sheet debit D) adjusted trial balance credit and income statement credit Answer: B Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Understand 33) Net loss is entered onto which columns of a worksheet? A) income statement credit and balance sheet debit B) income statement credit and balance sheet credit C) adjusted trial balance credit and income statement credit D) income statement debit and balance sheet credit Answer: A Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Understand 10 © 2020 Pearson Canada Inc.

Table 4-1 Post Closing Trial Balance Red Brown, Capital $154,900 Cash 35,200 Accounts receivable 10,900 Accounts payable 3,500 Unearned service revenue 6,850 Supplies 1,200 Equipment 110,600 Land 15,400 Accumulated amortization ??? 34) Referring to Table 4-1, calculate the total amount in the credit column of the post-closing trial balance. A) $120,900 B) $165,250 C) $173,300 D) nil Answer: C Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Procedural Cognitive Taxon.: Evaluate 35) Using the data in Table 4-1, the balance in accumulated amortization must be: A) $8,050. B) $10,200. C) $65,250. D) nil Answer: A Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Procedural Cognitive Taxon.: Analyze

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36) The worksheet is a: A) document that helps summarize data for the financial statements. B) required financial statement according to IFRS. C) document that is part of the general ledger. D) document that lists only the balance sheet accounts. Answer: A Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Factual Cognitive Taxon.: Understand 37) The worksheet includes debit and credit columns for: A) post-closing trial balance, adjustments, income statement, balance sheet, trial balance. B) trial balance, income statement, adjustments, balance sheet, adjusted trial balance. C) adjustments, trial balance, post-closing trial balance, adjusted trial balance, income statement, balance sheet. D) general ledger, trial balance, adjustments, income statement, balance sheet. Answer: B Type: MC CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Factual Cognitive Taxon.: Remember

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38) The following accounts appear in the adjusted trial balance columns of a worksheet. State the column that each account balance is extended to, choosing from the following columns: 1) income statement debit 2) balance sheet debit 3) income statement credit 4) balance sheet credit a) ________ service revenue b) ________ unearned service revenue c) ________ land d) ________ rent expense e) ________ supplies expense f) ________ supplies g) ________ accumulated amortization h) ________ equipment i) ________ owner's capital j) ________ owner's withdrawals Answer: a) 3 b) 4 c) 2 d) 1 e) 1 f) 2 g) 4 h) 2 i) 4 j) 2 Type: SA CPA Competency: 1.3.1 Prepares financial statements Objective: 4-1 Prepare an accounting work sheet Knowledge Taxon.: Conceptual Cognitive Taxon.: Evaluate

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39) Given the following worksheet with the trial balance already entered, and the adjustment information, complete the worksheet. Beatty Services Work Sheet For the Year Ended December 31, 2019

Account Cash A/R Supplies Equipment Accum. Amort. - Equipment A/P Salary Payable Unearned Service Revenue Brad Beatty, Capital Brad Beatty, Withdrawals Service Revenue Salary Expense Rent Expense Advertising Expense Supplies Expense Amort. Expense - Equipment

Unadjusted Trial Adjustments Adj. Trial Inc. Balance Balance Bal. Statement Sheet Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. 25 15 8 35 0 8 0

31 30 5 41 10 8 4 0 0 110 110

Additional information: a) Supplies used, $4. b) Amortization on equipment, $6. c) Unearned service revenue earned during period, $12. d) Accrued salaries, $3. e) Accrued service revenue, $4. 14 © 2020 Pearson Canada Inc.

Answer:

Beatty Services Work Sheet For the Year Ended December 31, 2019

Unadjusted Trial Adjustments Adj. Trial Inc. Balance Account Balance Bal. Statement Sheet Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash 25 25 25 A/R 15 4 19 19 Supplies 8 4 4 4 Equipment 35 35 35 Accum. Amort. - Equipment 0 ...