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