Solution Manual For College Accounting A Contemporary Approach 5th Edition M David Haddock John Price Michael Farina

Solution Manual for College Accounting A
Contemporary Approach, 5th Edition, M. David

Haddock, John Price, Michael Farina
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orary-approach-5th-edition-m-david-haddock-john-price-michael-farina/
Solution Manual for College Accounting A Contemporary Approach, 5th Edition, M. David Haddoc
Chapter 6: Haddock, College Accounting: A Contemporary

Approach, 5e
Questions and Answers to Section Reviews
Chapter 6: Section 1 Review
1. What is the journal entry to close the drawing account?
a. debit the capital account and credit the drawing account.
b. debit the drawing account and credit the capital account.
c. debit the revenue account and credit the drawing account.
d. debit drawing expense and credit the drawing account.
Answer: A
Difficulty: 1 Easy
Learning Objective: 06-01
Topic: Closing Entries
Blooms: Remember
AACSB: Analytical Thinking
AICPA: BB Industry
AICPA: FN Measurement
2. The Income Summary account is a temporary:

a. liability account.
b. expense account.
c. drawing account.
d. owner's equity account.
Answer: D
Difficulty: 1 Easy
Blooms: Remember
AICPA: BB Industry
AICPA: FN Reporting
3. The fourth step in the closing process is to:

a. interpret the financial information.
b. prepare a worksheet.
1
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c. analyze transactions.
d. journalize the transactions.
Answer: B
Difficulty: 1 Easy
Blooms: Remember
AICPA: BB Industry
4. After the closing entries are posted, which account normally has a balance other than
zero?
a. Capital.
b. Rent Expense.
c. Income Summary.
d. Fees Income.
Answer: A
Difficulty: 1 Easy
Blooms: Remember
AICPA: BB Industry
AICPA: FN Reporting
5. After closing, which accounts have zero balances?

a. liability and capital accounts.
b. asset and capital accounts.
c. revenue, drawing, and expense accounts.
d. liability, drawing, and expense accounts.
Answer: C
Difficulty: 1 Easy
Blooms: Remember
2

AICPA: BB Industry
AICPA: FN Reporting
6. The business owner removes supplies that are worth $1,200 from the company
stockroom. She intends to take them home for personal use. What effect will this have on
the company’s net income?
a. net income will decrease by $1,200.
b. net income will increase by $1,200.
c. no effect on net income.
d. net income will decrease by $2,400.
Answer: C
Difficulty: 2 Medium
Blooms: Understand
AICPA: BB Industry
AICPA: FN Reporting
Chapter 6: Section 2 Review
1. What are the last three steps (7th, 8th, and 9th) in the accounting cycle?
a. post the journal entries, journalize transactions, analyze transactions.
b. prepare financial statements, prepare a worksheet, prepare post-closing trial balance.
c. journalize and post the closing entries, prepare a post-closing trial balance, interpret
the financial statements.
d. interpret the financial information, analyze transactions, journalize transactions.
Answer: C
Difficulty: 1 Easy
Topic: Using Accounting Information
Blooms: Remember
3

AICPA: BB Industry
AICPA: FN Reporting
2. Why is a postclosing trial balance prepared?

a. to ensure the general journal is in balance after the adjusting and closing entries
are journalized.
b. to ensure the general ledger is in balance after the adjusting and closing entries are
posted.
c. to ensure that all transactions have been journalized.
d. to ensure that all transactions have been posted.
Answer: B
Difficulty: 1 Easy
Blooms: Remember
AICPA: BB Industry
AICPA: FN Reporting
3. What accounts appear on the postclosing trial balance?

a. asset, liability, and the owner's capital accounts
b. asset, liability, and the owner's drawing accounts
c. asset, liability, and revenue and expense accounts
d. asset, liability, revenue and expense, and the owner's drawing account
Answer: A
Difficulty: 1 Easy
Blooms: Remember
AICPA: BB Industry
AICPA: FN Reporting
4. Which of the following accounts will not appear on the postclosing trial balance?
4

a. B. J Hall, Capital
b. B. J. Hall, Drawing
c. Accounts Payable
d. Cash
Answer: B
Blooms: Understand
AICPA: BB Industry
AICPA: FN Reporting
5. After the revenue and expense accounts are closed, Income Summary has a
credit balance of $80,000. What does this figure represent?
a. net loss of $80,000.
b. net profit of $80,000.
c. owner's withdrawal of $80,000.
d. net Increase in Owner's Equity of $80,000.
Answer: B
Difficulty: 1 Easy
Blooms: Remember
AICPA: BB Industry
AICPA: FN Reporting
6. Which financial statement would indicate how much customers owe to the business?
a. income statement.
b. balance sheet.
c. statement of owner's equity.
d. statement of cash flows.
Answer: B
5

Solution Manual for College Accounting A Contemporary Approach, 5th Edition, M. David Haddoc
Blooms: Understand
AICPA: BB Industry
AICPA: FN Reporting
7. Which financial statement would indicate total revenues, total expenses, and whether the
business had a net income or net loss?
a. balance sheet.
b. statement of owner's equity.
c. statement of cash flows.
d. income statement.
Answer: D
Blooms: Understand
AICPA: BB Industry
AICPA: FN Reporting
8. Which financial statement would indicate whether there is enough cash to purchase new
equipment and how much money is owed to suppliers?
a. income statement.
b. balance sheet.
c. statement of owner's equity.
d. statement of cash flows.
Answer: B
Blooms: Understand
AICPA: BB Industry
AICPA: FN Reporting
6
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Solution Manual for College Accounting A

Contemporary Approach, 5th Edition, M. David

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Chapter 6: Haddock, College Accounting: A Contemporary

2. The Income Summary account is a temporary:

3. The fourth step in the closing process is to:

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5. After closing, which accounts have zero balances?

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Chapter 6: Section 2 Review

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2. Why is a postclosing trial balance prepared?

3. What accounts appear on the postclosing trial balance?

No reproduction or distribution without the prior written consent of McGraw Hill.

No reproduction or distribution without the prior written consent of McGraw Hill.

No reproduction or distribution without the prior written consent of McGraw Hill.

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