Week 5 Quiz

The bicycle shop (illustrative) prepares its Month 1 financial statements from its adjusted trial balance. In which order must it prepare the three statements?

Select one.

• Income statement, then statement of retained earnings, then balance sheet
• Balance sheet, then income statement, then statement of retained earnings
• Statement of retained earnings, then income statement, then balance sheet
• Income statement, then balance sheet, then statement of retained earnings

For Month 1, the bicycle shop (illustrative) has Service Revenue of $5,850 and total expenses of $4,450. Its Cash account shows $17,100. What is the shop's net income for Month 1?

Select one.

• $17,100
• $1,400
• $900
• $10,300

True or false: the bicycle shop's (illustrative) $500 dividend for Month 1 is listed as an expense on its income statement.

True or false.

• True
• False

The bicycle shop (illustrative) begins Month 1 with no retained earnings, earns net income of $1,400, and pays a $500 dividend. What ending balance does its statement of retained earnings report?

Select one.

• $1,400
• $1,900
• $900
• $500

At the end of Month 1, the bicycle shop (illustrative) still owes the cycling club $900 of tune-ups, recorded in Unearned Revenue. Where does that $900 belong in its financial statements?

Select one.

• Among the revenues on the income statement
• Among the current assets on the balance sheet
• Among the long-term liabilities on the balance sheet
• Among the current liabilities on the balance sheet

The bicycle shop's (illustrative) end-of-Month-1 balances include Cash $17,100, Accounts Receivable $1,050, Supplies $350, Prepaid Insurance $2,200, and Equipment $12,000 with Accumulated Depreciation of $200. What total current assets does its classified balance sheet report?

Select one.

• $20,700
• $32,500
• $32,700
• $18,150

Which of these bicycle shop (illustrative) accounts are temporary accounts that the closing entries reset to zero? Select all that apply.

Select every option that applies.

• Service Revenue
• Retained Earnings
• Dividends
• Accumulated Depreciation
• Wages Expense
• Unearned Revenue

After closing its revenue, its expenses, and Income Summary, the bicycle shop (illustrative) makes one more closing entry for its $500 Dividends balance. Which entry is that?

Select one.

• Debit Income Summary 500; credit Dividends 500
• Debit Retained Earnings 500; credit Dividends 500
• Debit Dividends 500; credit Retained Earnings 500
• Debit Dividends 500; credit Income Summary 500

After the bicycle shop (illustrative) posts its four closing entries, it lists every remaining ledger balance and checks that total debits equal total credits. What total does each side of that post-closing trial balance show?

Select one.

• $32,500
• $37,650
• $32,700
• $30,900

From which record does the bicycle shop (illustrative) take every figure on its Month 1 financial statements?

Select one.

• The unadjusted trial balance, $36,800 on each side
• The post-closing trial balance, $32,700 on each side
• The journal's twelve Month 1 entries
• The adjusted trial balance, $37,650 on each side