ch 4 acc rev

current assets

Cash and other assets that are expected to be converted to cash or sold or used up, usually within one year or less, through the normal operations of the business.

Step 9.

Closing entries are journalized and posted to the ledger.

The posting of depreciation expense will be done during which step of the accounting cycle?

Step 6: Journalizing and posting adjusting entries

accounting cycle

The accounting process that begins with analyzing and journalizing transactions and ends with the post-closing trial balance.

closing entries

The journal entries that transfer the balances of temporary accounts to permanent accounts at the end of the accounting period.

What is the major difference between the post-closing trial balance and the other two trial balances?

The post-closing trial balance is the only one to include only real accounts

Which of the following is not true regarding the flow of information from the adjusted trial balance on the end-of-period spreadsheet?

The retained earnings balance flows into the income statement.

Which of the following is true regarding the flow of information from the adjusted trial balance on the end-of-period spreadsheet? a. The revenue and expense account balances flow into the statement of stockholders' equity. The revenue and expense account balances flow into the income statement. c. The retained earnings and dividends account balances flow into the balance sheet. d. The asset and liability account balances flow into the statement of stockholders' equity'.

The revenue and expense account balances flow into the income statement.

The balance of the dividends account on the adjusted trial balance of the end-of-period spreadsheet flows into which of the following financial statements? a. The income statement b. The statement of stockholders' equity' c. The balance sheet d. All of these financial statements are correct.

The statement of stockholders' equity

Step 1

Transactions are analyzed and recorded in the journal.

Step 2.

Transactions are posted to the ledger.

A company's net income or net loss for a period is determined during which of the following steps of the accounting cycle?

When financial statements are prepared

The journal entry to record $6,000 cash received for $7,000 services performed would include

a credit to Fees Earned for $7,000

On the end-of-period spreadsheet, Accumulated Depreciation has a balance of $600 in the Unadjusted Trial Balance column and an adjustment of $200 in the Adjustments Credit column. What amount should appear for Accumulated Depreciation in the Adjusted Trial Balance column?

a. A credit of $800

On the end-of-period spreadsheet, Prepaid Insurance has a balance of $2,400 in the Unadjusted Trial Balance Debit column and an adjustment of $200 in the Adjustments Credit column. What amount should appear for Prepaid Insurance in the Adjusted Trial Balance column and ultimately in the balance sheet?

a. A debit of $2,200

retained earnings

net income left over for a business after it has paid out dividends to its shareholders

what are the fixed assets

property, land, and equip

All of the following statements are true regarding retained earnings except a. the amount of dividends is added to net loss to arrive at the retained earnings ending balance. b. the first item normally presented on the statement of stockholders' equity is the balance of retained earnings at the end of the period. c. the amount of dividends is deducted from net income to arrive at the retained earnings ending balance. d. the retained earnings beginning balance is usually the retained earnings ending balance from the previous period.

the first item normally presented on the statement of stockholders' equity is the balance of retained earnings at the end of the period.

during the closing process what happens to the temporary acc?

transferred to retained earnings

The spreadsheet is

used to determine amounts recorded in the unadjusted trial balance

Notes receivable

A customer's written promise to pay an amount and possibly interest at an agreed-upon rate.

Step 10.

A post-closing trial balance is prepared

Step 6.

Adjusting entries are journalized and posted to the ledger.

Step 4.

Adjustment data are assembled and analyzed.

Which of the following is true regarding the end-of-period spreadsheet? The Adjustments columns need not be totaled. b. Amounts are read across a row and added or subtracted to determine the amounts to insert in the Adjusted Trial Balance columns. c. The difference in the totals of the Adjustments columns indicates the net income or loss for the period. d. Closing entries are entered in the Adjustments columns.

Amounts are read across a row and added or subtracted to determine the amounts to insert in the Adjusted Trial Balance columns.

Step 7.

An adjusted trial balance is prepared.

Of the following, which step is not a requirement during the accounting cycle? a. A post-closing trial balance is prepared. b. An end-of-period spreadsheet is prepared. c. Transactions are posted to the ledger. d. An unadjusted trial balance is prepared.

An end-of-period spreadsheet is prepared.

Step 5.

An optional end-of-period spreadsheet is prepared.

Step 3.

An unadjusted trial balance is prepared.

Which of the following is not correct about cross-referencing adjustments in the spreadsheet? a. Cross-referencing adjustments uses account numbers for each debit and credit. b. The cross-referencing process is sometimes referred to as keying the adjustments. c. Cross-referencing the debit and credit of each adjustment is useful in reviewing the spreadsheet. d. Cross-referencing is helpful for identifying the adjusting entries that need to be recorded in the journal.

Cross-referencing adjustments uses account numbers for each debit and credit.

Which of the following accounts will be closed with a credit? a. Accumulated depreciation b. Fees earned c. Depreciation expense d. Notes payable

Depreciation expense

Which of the following is the last step of the posting process? Enter the journal page number in the Post. Ref. column of the ledger account. b. Enter the ledger account number in the Post. Ref. column of the journal. c. Enter the date of the transaction in the ledger account. d. Determine the new balance of the ledger account

Enter the ledger account number in the Post. Ref. column of the journal

Step 8.

Financial statements are prepared.

current liabilities

Liabilities that will be due within a short time (usually one year or less) and that are to be paid out of current assets.

long-term liabilities

Liabilities that will not be due for a long time (usually more than one year).

Which of the following will increase retained earnings on the statement of stockholders' equity? . Dividends, net income b. Dividends, net loss c. Net income only d. Net loss only

Net income only

Which of the following accounts will be closed with a debit? a. Cash b. Rent Revenue c. Miscellaneous Expense d. Notes Receivable

Rent Revenue

Which statement is false about reversing entries? a. A reversing entry is the opposite of the adjusting entry to which it relates. b. Reversing entries are recorded on the first day of the subsequent accounting period. c. Recording reversing entries simplifies the recording of next period's transactions. d. Reversing entries are required as part of the closing process.

Reversing entries are required as part of the closing process

Using an end-of-period spreadsheet, the flow of accounting information moves from the

adjusted trial balance to the financial statements

Which of the following will be reported in the subsection of the balance sheet called current assets? a. Land, accumulated depreciation, cash b. Cash, accounts receivable, supplies c. Accounts receivable, accounts payable, unearned revenue d. Prepaid insurance, supplies, office equipment

b. Cash, accounts receivable, supplies

The listing of expenses on the income statement is ordered

by size, beginning with the largest item and putting miscellaneous expense as the last item

Accumulated Depreciation has a ------ balance.

credit

the journal entry to record $4,500 cash received from clients on account would include a

credit to Accounts Receivable for $4,500

The journal entry to record $4,500 cash received from clients on account would include a

credit to Accounts Receivable for $4,500.