Ch.4/Week 3 (part 1)

A reversing entry is

optional and used to simplify the company's record keeping process.

The company's unclassified balance sheet reported the assets listed in the above table. The total current assets that would be reported on a classified balance sheet prepared for the company are:

$30,750 Cash $12,000 + Merchandise inventory $6,000 + Short-term notes receivable $1,000 + Prepaid insurance $1,500 + Short-term investments $10,000 + Supplies $250 = Current assets of $30,750.

Carlin Company has current assets of $100,000, total assets of $1,000,000, current liabilities of $50,000, total liabilities of $250,000 and total equity of $750,000. What is the current ratio (rounded to the nearest decimal point)?

2.0 Explanation:Current Ratio = Current Assets / Current LiabilitiesCurrent Ratio = $100,000 / $50,000 = 2.0

All of the following accounts are temporary except:

Assets

An unclassified balance sheet:

Broadly groups assets, liabilities and equity

Identify the accounts that would appear on the post-closing trial balance.

Cash- Included Withdrawals- Not included Depreciation Expense- Not included Owner's Capital- Included Income Summary- Not included

The purpose of the closing process is to:

Reset revenues, expense and withdrawal accounts Help summarize a period's revenues and expenses

Which of the following statements is true when comparing the results of using reversing entries with not using reversing entries.

The salaries expense and salaries payable accounts will have the same balances whether or not a reversing entry is made.

The company's adjusted trial balance as follows includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Owner's Capital $59,000; Withdrawals, $2,000; Consulting Revenue, $56,000; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances. Prepare the first closing entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

consulting revenue- 56,000 (debit) income summary- 56,000 (credit)

The current ratio is computed as:

current assets divided by current liabilities

Assume that an adjusting entry was made on November 30 for earned, but unpaid employee salaries of $260 which represented 2 days of salaries earned for November 29-30. On December 5, the employees are paid for five days. Record the journal entry on December 5 assuming that reversing entries ARE used by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

date-12/05 Salaries Expense- 650 (debit) Cash- 650 (credit)

Assume that an adjusting entry was made on November 30, 2021 for earned, but unpaid employee salaries of $260 which represented 2 days of salaries earned for November 29-30. On December 5, the employees are paid for five days. Record the journal entry on December 5 assuming that reversing entries ARE NOT used by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

date-12/05 Salaries Payable- 260 (debit) Salaries Expense- 390 (debit) Cash- 650 (credit)

The accounting cycle consists of 10 steps. Identify the order in which the first five steps will be performed by selecting from the drop down items.

step 1- Analyze transactions step 2- Journalize step 3- Post step 4- Prepare unadjusted trial balance step 5- Adjust

Place the steps in the four-step closing process in the correct order:

step 1- Close the revenue accounts. step 2- Close the expense accounts. step 3- Close the income summary account. step 4- Close the withdrawals account.