Ac Chapter 5
Adequate disclosure is based on
A combination of official rules, tradition and professional judgement
Accounting methods in use, lawsuits pending against the company, and customers that account for 10% or more of the company's revenues are included in
Adequate disclosure
Closing entries would be prepared before the
After-closing trial balance
Of the financial statements, which one is prepared last?
Balance sheet
The closing entry for an expense account would consist of
Debit income summary, credit expenses
Closing entries should be made
Every year
Adequate disclosure demands
Good faith effort by management
Earnings statement
Income statement
Profit and loss statement
Income statement
Statement of operations
Income statement
The order of financial statements is
Income statement, Retained earnings, Balance sheet
Income summary appears on which financial statement
NONE
If the income summary had a credit balance it shows
Net income
If the income summary has a debit a balance it shows
Net loss
Declaring a dividend will ________ change net income
Not
Purpose of closing entries
Prepare revenue and expenses for the next period's revenue and expenses
Dividends should be closed to
Retained earnings
Net Income from the income statement appears on
Retained earnings statement
Publicly traded companies must file audited statements with
SEC
Publicly owned companies are listed on the
Stock exchange
A statement of retained earnings shows
The changes in retained earnings during the accounting period
Assets are considered current assets if
They are converted to cash within a year or less
Dividends declared ____________ retained earnings
reduce