Chapter 3

have occurred but that have not yet been recorded

A primary purpose of adjusting entries is to record events that

When should supplies be recorded as an expense?

In the period the supplies are used, regardless of when they were purchased

Which of the following financial statements typically is prepared last?

Cash Flow

is an allocation of the cost of buildings, vehicles, and equipment to expense over time as they are used.

Depreciation

The information reported in the statement of cash flows is organized by these activities:

Investing Operating Financing

Which of the following statements regarding the statement of cash flows are correct?

Reports cash disbursements Reports cash receipts The financial statement that is typically prepared last

Which of the following statements regarding the statement of cash flows are correct?

Reports cash disbursements The financial statement that is typically prepared last Reports cash receipts

Depreciation

The process of allocating the cost of an asset to expense over the useful life of the asset is called

net income ending balance retained earnings dividends for the period

The statement of stockholders' equity includes these amounts:

The entries that transfer the balances of all temporary accounts to retained earnings are referred to as

closing entries

The process of allocating the cost of an asset to expense over the useful life of the asset is called

depreciation

The statement of stockholders' equity includes these amounts:

dividends for the period ending balance retained earnings net income

A classified balance sheet ______

groups asset and liabilities into current and long-term categories

Permanent accounts are found in:

only the balance sheet

Closing entries move the balances from the ______ accounts into the Retained Earnings account.

permanenet

Which of the following are characteristics of all balance sheet accounts?

Balances are carried forward from period to period Accounts are referred to as permanent

The post-closing trial balance helps to verify that:

the accounts are ready for next period's transactions we prepared and posted closing entries correctly

After the adjusting entries have been completed, the adjusted balance in the Supplies Expense account represents the cost of supplies:

used during the accounting period

At the beginning of the accounting period, the balances of temporary accounts

zero