Chapter 4 - Videos ( extra credit)

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: $20,750 $24,750 $30,750 $80,750

$30,750 Correct Explanation: 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.

The owner's capital adjusted balance is entered in: - Balance sheet & Statement of Owner's Equity debit column. - Balance sheet & Statement of Owner's Equity credit column. - Income statement debit column. - Income statement credit column.

- Balance sheet & Statement of Owner's Equity credit column. Explanation: The adjusted owner's capital balance will be transferred to the Balance Sheet & Statement of Owner's Equity Credit column. The total debits and credits in the Balance Sheet & Statement of Owner's Equity will then be equal.

The difference between the Debit and the Credit columns in the Income Statement section of the work sheet equals: - Net income (or net loss). - Beginning owner's capital balance. - Ending owner's capital balance. - Revenue for the period.

- Net income (or net loss). Explanation: The difference between the total of the debits and credits in the Income Statement columns of a work sheet will equal the net income (or net loss) for the period. This number is also transferred to the Credit side of the Balance Sheet & Statement of Owner's Equity column.

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 0.3. 01.30 10.0

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

All of the following accounts are temporary except: Revenues Expenses Assets Income summary

Assets Temporary accounts include all of the income statement accounts, owner's withdrawal and the Income Summary account. They are used to record transactions and events in one period only.

An unclassified balance sheet: Organizes assets into subgroups. Broadly groups assets, liabilities and equity. Includes subheadings such as "Current assets" and "Noncurrent liabilities". Is not permitted according to GAAP.

Broadly groups assets, liabilities and equity. Explanation:An unclassified balance sheet broadly groups accounts into assets, liabilities, and equity. A classified balance sheet organizes assets and liabilities into subgroups, such as "current" and "noncurrent".

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.

Explanation: The first closing entry closes the revenue (and gain) accounts and transfers their credit balances to the Income Summary account. We bring accounts with credit balances, like the Fees Earned account, to zero by debiting them. The $56,000 credit entry to Income Summary equals total revenues for the period.

The purpose of the closing process is to: Reset assets, liabilities, and owner's capital accounts. Reset revenues, expense, and withdrawal accounts. Help summarize a period's revenues and expenses. Help summarize a period's assets and liabilities

Reset revenues, expense, and withdrawal accounts. Help summarize a period's revenues and expenses. The closing process has two primary purposes. One is to reset the revenues, expenses, and withdrawal accounts to a zero balance at the end of each period and it also helps in summarizing a period's revenues and expenses.

What are the 3 step of completing a work sheet in the correct order?

Step 1. List the titles of all accounts, account number, and their balance. Step 2 Enter the adjustments. Step 3 Prepare the adjusted trial balance. by combining the adjustments with the unadjusted balances for each account.

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

The correct order is: 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.

The accounting cycle consists of 10 steps. Identify the order in which the first five steps will be performed:

The correct order of the first five steps in the accounting cycle is: Step 1: Analyze transactions Step 2: Journalize Step 3: Post Step 4: Prepare unadjusted trial balance Step 5: Adjust

The work sheet: - eliminates any need for an audit of the financial statements. - is often made available to external decision makers. - aids in the preparation of financial statements. - cannot be used to determine the net income or net loss for the year.

aids in the preparation of financial statements.

The current ratio is computed as: current liabilities divided by current assets current assets multiplied by current liabilities current assets divided by current liabilities current liabilities multiplied by current assets

current assets divided by current liabilities Explanation:The current ratio helps assess a company's ability to pay its debts in the near future and is computed by dividing current assets by current liabilities.