chapter 3 accounting
Klein corporation retained earnings account showed a balance of $200 at 1/1/18. during the year, the company earned revenues of $5,000 and incurred expenses of $3,000. dividends declared were $500. The amount of retained earnings reported on the 12/31/18 balance sheet will be
$1,700
closing entries move the balances from ____ accounts to the retained earnings account
temporary
Norbert Inc delivered goods and services during December. Payment is expected during the first week of January. The related adjusting and tree should consist of a debit to a ____ account and a credit to a ____ account
asset; revenue
The post closing trial balance helps to verify that
The accounts are ready for the next period's transactions, we prepared and posted closing entries correctly
in an adjusting entry for expenses incurred but not yet paid
a liability is increasing since cash will be paid in the future due to the expense incurred
to complete the measurement process, companies need to update balances of assets, liabilities, revenues, and expenses for changes created by ____ entries
adjusting
which of the following statements describes the effect that adjusting and trees may have on liabilities?
adjusting entries increase liabilities for the amount of any occurred and unpaid expenses at the end of the period
revenue is an income statement for the year ended December 31st 2018 equals the
amount earned by selling goods or services to customers during 2018
in recording and accural adjusting entry to account for revenues earned but not yet collected, ____
an asset is increased since cash will be collected at a later date
at the beginning of the accounting., the balances of temporary accounts
are zero
prepaid insurance is a
asset in the balance sheet
prepaid insurance is a
asset the balance sheet
supplies should be ___ and supplies expense should be___ for the cost of supplies used up during the period
decreased increased
wald corporations adjusting trial balance shows the following temporary accounts: service revenue: $20,000; salaries expense $8,000; insurance expense: $2,000; utilities expense: $3,000; interest expense $200; and depreciation expense: $1,400. as part of the closing process, walled should debit retained earnings for
$14,600
wald corporations adjusting trial balance shows the following temporary accounts: service revenue: $20,000; salaries expense $8,000; insurance expense: $2,000; utilities expense: $3,000; interest expense $200; and depreciation expense: $1,400. as part of the closing process, walled should credit retained earnings for
$20,000
identify the entries needed for the closing process
-Debit each revenue, credit each expense, and record the difference in Retained Earnings. -Credit Dividends and debit Retained Earnings.
a classified balance sheet shows subtotals for current _____ and current ____.
assets, liabilities
prepaid rent appears in the
balance sheet because it is an asset
The entries that transfer the balances of all temporary accounts to retained earnings are referred to as
closing entries
during the year, smite company declared and paid dividends in the amount of $50,000. as part of the closing process smite should
debit retained earnings and credit dividends
The closing entry for expense accounts involves the following journal entry
debit retained earnings, credit expenses
as part of the closing process, dividends are closed to retained earnings. In the closing entry, correctly match the accounts with the appropriate debit/credit
debit retained earnings; credit dividends
process of allocating the cost of an asset to expense over the useful life of an asset is called
depreciation
in the closing process,____ are zeroed out by crediting each account and_____are zeroed out by debiting each account
expenses and dividends; revenues
The primary components of net income are
expenses and revenues
which of the following would be included in calculation of retained earnings?
expenses, revenues, dividends declared, beginning balance retained earnings
a classified balance sheet ____
groups assets and liabilities into current and long-term categories
The expense that relates to a formal note payable and accumulates or occurs throughout the accounting period is referred to as ____ expense
interest
____ is defined as the " cost of borrowing money."
interest
a long-term liability:
is not due within the next year
deferred revenue is a
liability
an asset that can quickly be turned to cash has the characteristic of
liquidity
with respect to current assets,_____ first how quickly an asset can be converted to cash
liquidity
which of these is a long-term liability?
mortgage payable due in 20 years
revenues, expenses, and dividends are referred to as____ accounts
nominal
at year end, companies that utilize a curl based accounting systems complete the measurement process through
recording of adjusting entries
____ Is the price earned from selling goods or services to customers
revenue
temporary accounts include____, ____, and ____
revenues, expenses, dividends
which of the following line items appear in an income statement
sales revenue, salaries expense
wald corporations adjusted trial balance shows the following temporary accounts: service revenue: $20,000; salaries expense $8,000; insurance expense: $2,000; utilities expense: $3,000; interest expense $200; and depreciation expense: $1,400. as part of the closing process, wald should debit
service revenue
on April 1st, Katie Inc collected $2,400 from a customer for a 12-month memberships starting on that date. on December 31st Katie Inc should credit:
service revenue for $1,800