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Principles of Accounting, Volume 1: Financial Accounting

Problem Set A

Principles of Accounting, Volume 1: Financial AccountingProblem Set A

Problem Set A

PA 1.

LO 5.1Identify whether each of the following accounts would be considered a permanent account (yes/no) and which financial statement it would be reported on (Balance Sheet, Income Statement, or Retained Earnings Statement).

  1. Accumulated Depreciation
  2. Buildings
  3. Depreciation Expense
  4. Equipment
  5. Fees Earned Revenue
  6. Insurance Expense
  7. Prepaid Insurance
  8. Supplies Expense
  9. Dividends
PA 2.

LO 5.1The following selected accounts and normal balances existed at year-end. Make the four journal entries required to close the books:

PA 3.

LO 5.1The following selected accounts and normal balances existed at year-end. Notice that expenses exceed revenue in this period. Make the four journal entries required to close the books:

PA 4.

LO 5.1Use the following Adjusted Trial Balance to prepare the four journal entries required to close the books:

PA 5.

LO 5.1Use the following Adjusted Trial Balance to prepare the four journal entries required to close the books:

PA 6.

LO 5.1Use the following T-accounts to prepare the four journal entries required to close the books:

PA 7.

LO 5.1Assume that the first two closing entries have been made and posted. Use the T-accounts provided as follows to:

  1. complete the closing entries
  2. determine the ending balance in the Retained Earnings account
PA 8.

LO 5.1Correct any obvious errors in the following closing entries by providing the four corrected closing entries. Assume all accounts held normal account balances in the Adjusted Trial Balance.


  1.



PA 9.

LO 5.2Assuming the following Adjusted Trial Balance, create the Post-Closing Trial Balance that would result, after all closing journal entries were made and posted:

PA 10.

LO 5.2The following Post-Closing Trial Balance contains errors. Prepare a corrected Post-Closing Trial Balance:

PA 11.

LO 5.2Assuming the following Adjusted Trial Balance, recreate the Post-Closing Trial Balance that would result after all closing journal entries were made and posted:

PA 12.

LO 5.3Use the following Adjusted Trial Balance to prepare a classified Balance Sheet:

PA 13.

LO 5.3Using the following Balance Sheet summary information, for the two years presented calculate:

  1. working capital
  2. current ratio
PA 14.

LO 5.3Using the following Balance Sheet summary information, calculate for the two companies presented:

  1. working capital
  2. current ratio
PA 15.

LO 5.3Using the following account balances, calculate for the two years presented:

  1. working capital
  2. current ratio
PA 16.

LO 5.4From the following Company R adjusted trial balance, prepare the following:

  1. Income Statement
  2. Retained Earnings Statement
  3. Balance Sheet (simple—unclassified)
  4. Closing journal entries
  5. Post-Closing Trial Balance
PA 17.

LO 5.4From the following Company T adjusted trial balance, prepare the following:

  1. Income Statement
  2. Retained Earnings Statement
  3. Balance Sheet (simple—unclassified)
  4. Closing journal entries
  5. Post-Closing Trial Balance
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