objective 4 2 1 the capital balance found in the balance sheet credit column of a wo 4309075

Objective 4-2

1) The capital balance found in the balance sheet credit column of a worksheet is the balance reported on the formal balance sheet.

2) The adjusting entries can be recorded in the journal as they are entered on the worksheet.

3) The owner's capital account has a January 1, 2014, balance of $59,000. The owner's withdrawals account has a balance of $25,600 for the year ending December 31, 2014. The income summary account contains a debit for $20,500 and a credit for $56,900. The balance in the owner's capital account on December 31, 2014, is:

A) $69,800.

B) $3,000.

C) $33,400.

D) $84,600.

Table 4-1

Postclosing Trial Balance

Red Brown, Capital$154,900

Cash35,200

Accounts receivable10,900

Accounts payable3,500

Unearned service revenue6,850

Supplies1,200

Equipment110,600

Land15,400

Accumulated amortization? ? ?

4) Using the data in Table 4-1, if the owner's beginning capital balance was $141,600 and the owner withdrew $15,850 during the current period, what was the current period's net income?

A) $9,300

B) $35,050

C) $25,750

D) $29,150

5) Using the data in Table 4-1, if the owner's beginning capital balance was $161,600 and the owner withdrew $5,850 during the current period, what was the current period's net loss?

A) $850

B) $6,700

C) $12,550

D) nil

6) The owner withdrawals account:

A) is not closed at the end of the accounting period.

B) is used to record salary paid to the owner.

C) is closed to the income summary account.

D) is closed to the capital account.

7) The income summary account:

A) is a type of temporary account.

B) is a type of revenue account.

C) is a current asset.

D) is a current liability.

8) Temporary accounts are:

A) current assets but not current liabilities.

B) all of the owner equity accounts.

C) current asset and current liability accounts.

D) also called nominal accounts.

9) Temporary accounts are:

A) a special type of nominal account.

B) closed at the end of the accounting period.

C) all of the owner equity accounts.

D) revenue and expense accounts but not the income summary account.

10) Adjusting entries are:

A) a key element of accrual accounting.

B) required in both accrual and cash-basis accounting.

C) recorded only on the worksheet.

D) recorded in the general journal but not on the worksheet.