Question

Which of the following correctly lists the trial balance worksheet sequence?

a.)1. Trial balance is prepared.
   2. Adjusting entries are made.
   3. Income statement is prepared on the worksheet.
   4. Balance sheet is prepared on the worksheet.
   5. Closing entries are made to close out temporary accounts and determine net income       or net loss for the period.
   6. Adjusted trial balance is prepared.

b.)1. Trial balance is prepared.
   2. Adjusting entries are made.
   3. Adjusted trial balance is prepared.
   4. Income statement is prepared on the worksheet.
   5. Balance sheet is prepared on the worksheet.
   6. Closing entries are made to close out temporary accounts and determine net income       or net loss for the period.

c.)1. Adjusting entries are made.
   2. Adjusted trial balance is prepared.
   3. Trial balance is prepared.
   4. Income statement is prepared on the worksheet.
   5. Balance sheet is prepared on the worksheet.
   6. Closing entries are made to close out temporary accounts and determine net income       or net loss for the period.

d.)1. Adjusting entries are made.
   2. Adjusted trial balance is prepared.
   3. Income statement is prepared on the worksheet.
   4. Balance sheet is prepared on the worksheet.
   5. Trial balance is prepared.
   6. Closing entries are made to close out temporary accounts and determine net income       or net loss for the period.

2. As Bob and Robert reviewed the balance sheet accounts for their car wash business, Robert reminded Bob of the money that had not yet been paid to their mechanic. The mechanic fixed a coin-collecting machine, but Robert did not pay him because he had run out of checks. Based on this information, Bob made an adjustment to the trial balance worksheet. He recorded the money that Robert would pay the mechanic next week.

The type of adjustment Bob recorded is called __________.

a.)error correction

b.)accrued expenses

c.)prepaid expenses

d.)unearned revenues

3.Bob would make an adjustment entry to the __________ account to record the $250 he spent on ink cartridges and printer paper.

Suppose that before making this adjustment, the balance in this account totaled $3,095. Bob’s ending balance for this account would now total __________.

a.)error correction; $3,345

b.)prepaid expense; $2,845

c.)supplies; $2,845

d.)accrued expense; $3,345

4.Earlier in the month, Harrison was informed that one of the firm's partners withdrew $1,300 from the firm, so he recorded a transaction to the owner's drawing account.

To close out the $1,300 balance, Harrison must record a debit to the __________ account, and a credit to the __________ account for $1,300.

a.)owner's equity; owner's draw

b.)accounts payable; expense account

c.)owner's draw; accounts payable

d.)expense account; owner's equity

Answer 1

1. b.)1. Trial balance is prepared.
   2. Adjusting entries are made.
   3. Adjusted trial balance is prepared.
   4. Income statement is prepared on the worksheet.
   5. Balance sheet is prepared on the worksheet.
   6. Closing entries are made to close out temporary accounts and determine net income or net loss for the period.

This is the actual order of closing the books. all other orders are wrong

2. b.)accrued expenses: Since the expense is incurred and is not paid yet, accrued expense has to be adjusted with

3. d.)accrued expense; $3,345

The balance after the entry will be (3,095 + 250) = 3,345

4. a.)owner's equity; owner's draw

at the time of payment the owner's draw account would have been debited. so the concerned balance has to be transferred to owner's equity