ACC ch.4

Common categories of a classified balance sheet include Current Assets, Long-Term Investments, Plant Assets, Intangible Assets, Current Liabilities, and Long-Term Liabilities.

1. Land- Plant assets 2. Notes payable (due in five years)- Long-term liabilities 3. Accounts receivable- Current assets 4. Trademarks- Intangible assets 5. Accounts payable- Current liabilities 6. Equipment Plant assets 7. Wages payable- Current liabilities 8. Cash- Current assets

Which of the statements below is correct regarding the difference between a temporary account and a permanent account?

A temporary account will not appear on a post-closing trial balance.

Describe an unclassified balance sheet.

An unclassified balance sheet is one whose items are broadly grouped into assets, liabilities, and equity.

Choose the statement below that explains what "closing" means.

Closing means to reset an account balance to zero.

Define "current" as it applies to assets and liabilities on a classified balance sheet.

Current items are those expected to come due within one year or the company's operating cycle, whichever is longer.

What are current liabilities?

Current liabilities are usually settled by paying out current assets such as cash. Current liabilities are liabilities due to be paid within one year.

On December 31, AB Consulting recorded two days' wages of $100 in an adjusting entry which included a debit to Salaries Expense and a credit to Salaries Payable. On January 1, the accountant prepared a reversing entry which included which of the following?

Debit Salaries Payable $100; credit Salaries Expense $100.

Identify the accounts that would appear on the post-closing trial balance: Cash Withdrawals Depreciation Expense Owner's Capital Income Summary

Included Not included Not included Included Not included

Select the statement below that describes a post-closing trial balance.

It is a listing of all permanent accounts and their balances after closing.

Which statements below are true regarding permanent and temporary accounts?

Most temporary accounts are reported on the income statement. Permanent accounts are reported on the balance sheet. Owner, Capital is a permanent account, but Owner, Withdrawals is a temporary account. Temporary accounts have a balance for one period only. Permanent accounts will appear on a post-closing trial balance.

True statements about post-closing trial balance

One purpose is to verify that all temporary accounts have zero balances. One purpose is to verify that total debits equal total credit for permanent accounts.

Identify which of the following steps in the accounting cycle is optional.

Reversing journal entries

Accounting Process

Step 1: Analyze transactions Step 2: Journalize Step 3: Post Step 4: Prepare unadjusted trial balance Step 5: Adjust

Name four steps of closing process 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.

Identify the accounts that would be classified as current liabilities on a classified balance sheet.

Taxes payable Unearned rent Accounts payable

Closing means to transfer account balances from -----accounts so that they will start with a-----balance at the beginning of the next period.

Temporary and zero

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

Which of the following lists steps of the accounting cycle in the correct order (note that not all steps are listed)?

Trial balance, Adjusting journal entries, Post-closing trial balance.

For each account, identify whether it is included in a post-closing trial balance.

a. Accounts Receivable Yes, this is a permanent account b. Salaries Expense No, this is a temporary account c. Cash Yes, this is a permanent account d. Land Yes, this is a permanent account e. Income Tax Expense No, this is a temporary account f. Salaries Payable Yes, this is a permanent account

Current assets are:

cash and other resources that are expected to be sold, collected or used within one year

Summarize the closing process by listing the closing entries in the order in which they would occur at the end of the accounting period. Step 1: Close Income Statement---balance accounts. Step 2: Close Income Statement---balance accounts. Step 3: Close---Step 4: Close----

credit debit income summary Withdrawals

The closing process takes place at the---- of an accounting period, after the----- trial balance is prepared and---- the financial statements are prepared.

end, adjusted, after

A classified balance sheet can be described as a balance sheet that

organizes assets and liabilities into important subgroups. lists current assets in the order of how quickly they can be converted to cash.

Current items can be described as those expected to come due within one---and are listed in the order of how---- they could be converted to or paid in cash.

year quickly