ACCT

Place the steps in the accounting process in order:

1. Analyze the transaction 2. Record the transaction 3. Post from the journal to the general ledger 4. Prepare the unadjusted trial balance

Place the steps at the end of the accounting period in the correct order.

1. Prepare an unadjusted trial balance 2. Record adjusting entries. 3. Prepare an adjusted trial balance 4. Prepare financial statements 5. Close the temporary accounts.

On October 1, Hill Corporation signed a 6-month note with principal of $10,000 and interest of $600 due in 6 months. The stated rate of interest is

12%

Which accounts most likely use a subsidiary ledger?

Accounts receivable and payable

1.Many assets are measured at their historical costsrather than their fair values 2.Many aspects of a company may represent valuable resources, but these items are not recorded as assets in the balance sheet

Balance sheet limitations

-Involve cash inflows and outflows from transactions with creditors and owners

Financing activities.

A___ is a collection of storage areas, called accounts, used to keep track of increases and decreases in financial position elements.

General ledger

-Involve the acquisition and sale of (1) long-term assets used in the business and (2) nonoperatinginvestment assets

Investing activities

Interest Expense; Depreciation Expense

Non operating; operating expense on income statements

-Inflows and outflows of cash related to transactions entering intothe determination of net income

Operating Activities.

For a manufacturing firm, the period of time necessary to convert cash to raw materials to a finished product to receivables and then back to cash is known as which cycle?

Operating cycle

Represent assets, liabilities, and shareholders' equity at a point in time.

Permanent accounts

Which of the following is an example of an accrued receivable?

Recording interest revenue before it is received.

are associated with management's plans to materially change the scope of business operations or the manner in whichthey are conducted

Restructuring costs.

•Record credit sales. •Collect accounts receivable. •Record sales returns and allowances. •Write-off uncollectible accounts receivable. •Record COGS with perpetual inventory system.

Revenue cycle journal entries

•Obtain customer order. •Check customer credit. •Enter sales order. •Ship goods to customer. •Bill customer. •Sales returns and/or allowances if necessary. •Collect cash from customer. •Write-off accounts receivable if determined uncollectible.

Revenue cycle steps

Which accounts should be closed at the end of the period:

Salary expense, dividends, sales

cycles identify specific sets of economic events that normally follow each other in a cyclical way.

Transaction Cycles

The process of reviewing the source documents to determine the dual effect on the accounting equation and the specific elements involved is called

Transaction analysis.

-List of the general ledger accounts along with their balances -Purpose: §To check for completeness and prove that accounting equation is in balance Total debit balances = Total credit balances -May contain offsetting errors -Facilitates the preparation of adjusting entries

Unadjusted Trial balance

Deferred revenue is

a liability on the balance sheet

Expenses incurred in one accounting period and paid for in a future accounting period are ___ liabilities.

accrued

The effect of salaries and wages incurred but not yet paid would be reflected in the account balances shown on the

adjusted trial balance.

required to implement the accrual accounting model. More specifically, these entries help ensure that all revenues earnedand expenses incurred are recognized during their respective period, regardless of when the cash is received or paid. -Prepayments §Prepaid Expenses §Deferred Revenues -Accruals §Accrued Liabilities §Accrued Receivables Estimates

adjusting entries

The income statement summarizes the:

assets and liabilities of a company for a period of time.

The process in which temporary accounts are reduced to zero balances and transferred to retained earnings is the___process

closing.

The normal balance of the contra asset accumulated depreciation account is a___.

credit.

To close the divide account the journal entry would require a____entry to retained earnings

debit

Neumann Corporation prefers to present a separate income statement. Neumann can satisfy the requirements for reporting comprehensive income by presenting comprehensive income

immediately following the income statement.

The balance in the ___ ___ account after all the temporary accounts have been closed equals net income or net loss .

income summary

A chronologic record of all economic events affecting a firm are recorded in a ___

journal

A____ liability is a liability that will be satisfied in more than one year or operating cycle whichever is longer, in the future/

non-current

The components of the income statement are usually classified as

non-operating and operating items.

The statement of shareholders' equity discloses the changes in the shareholder equity accounts during the period from:

other comprehensive income, investments by owners, net income, and distributions to owners.

-Inventory and cost of goods sold are updated at the end of the reporting period

periodic inventory system

A temporary purchases account is used when the ___ inventory system is used.

periodic.

-Inventory and cost of goods sold accounts are continuously updated for purchase, sale, and return of merchandise

perpetual inventory system.

To adjust for rent used up during the year that was recored to the prepaid rent account when paid for,

rent expense is debited, prepaid rent is credited.

Special journals record:

repetitive transactions

Which of the following are temporary account?

salary expense, revenue

Represent changes in the retained earnings component of shareholders' equity for a corporation caused by revenue, expense, gain, and loss transactions.

temporary accounts

The left side of the accounting equation represents____, while the right side represents___.

the total economic resources of the company; the total claims against the company.

Source documents:

usually identify the date and nature of each transaction, the participating parties, and the monetary terms. Examples: Sales invoices, bills from suppliers, and cash register tapes

The statement of comprehensive income reports the changes in shareholders' equity during the period that

were not a result of transactions with owners.

A____ is a an informal tool used to organize the accounting information and to prepare adjusting and closing entries at the end of the period

worksheet