Classified Balance Sheet
A balance sheet that contains standard classifications or sections.
What is a Classified Balance Sheet?
Entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent shareholders' equity account, retained earnings.
What are closing entries?
Entries to correct errors made in recording transactions.
What is correcting entries?
The ability of a company to pay obligations expected to be due within the next year.
What is liquidity?
The difference between a adjusting entry and a closing entry.
What is adjusting entries are recorded at the end of each month, while closing entries are recorded at the end of the fiscal year?
Assets that a company expects to convert to cash or use up within one year or its operating cycle, whichever is longer.
What is current assets?
A temporary account used in closing revenue and expense accounts.
What is Income Summary?
What is whenever they are discovered?
The average time that it takes to purchase inventory, sell it on account, and then collect cash from customers.
What is operating cycle?
A company has purchased a tract of land. It expects to build a production plant on the land in approximately 5 years. During the 5 years before construction, the land will be idle. The land would be recorded as this.
What is long-term investment?
Obligations that a company expects to pay within the coming year or its operating cycle, whichever is longer.
What is current liabilities?
An entry, made at the beginning of the next accounting period that is the exact opposite of the adjusting entry made in the previous period.
What is a reversing entry?
The correcting entry for :
A payment of Salaries and Wages Expense of $600 was debited to Supplies and credited to Cash, both for $600
What is a debit to Salaries and Wages Expense for $600 and a credit to supplies of $600?
A list of permanent accounts and their balances after a company has journalized and posted closing entries.
What is a post-closing trial balance?
The proper order of the following steps in the accounting cycle.
What is (1) journalize transactions, (2) post to ledger accounts, (3) prepare unadjusted trial balance, and (4) journalize and post adjusting entries
What is intangible assets?
Accounts that relate only to a given accounting period. Consist of all income statement accounts, the dividends account, and the Income Summary account. Closed at the end of the accounting period.
What is a temporary accounts?
The two ways to correct a error.
What is reverse the incorrect entry and use a second entry to record the transaction correctly or make a single journal entry?
The ownership claim of shareholders on total assets. It is to a corporation what owner's equity is to a proprietorship.
What is Stockholders' equity?
A net loss has this impact on Income Summary.
What is a debit to Income Summary?
Generally, (1) investments in stocks and bonds of other companies that are normally held for many years; (2) long-term assets, such as land and buildings, not currently being used in operating activities; and (3) long-term notes receivable.
What is long-term investments?
The (4) steps in the closing process.
(1)Debit each revenue account for its balance, and credit Income Summary for total revenues. (2)Debit Income Summary for total expenses, and credit each expense account for its balance. (3)Debit Income Summary and credit Retained Earnings for the amount of net income. (4) Debit Retained Earnings for the balance in the Dividends account, and credit Dividends for the same amount.
This approach in correcting entries result in more entries and posting.
What is reversing the incorrect entry and preparing the correct entry?
A multi-column form that may be used in making adjustments and in preparing financial statements.
What is a worksheet?
Goodwill, patents, copyrights, and trademarks are this type of balance sheet account.
What is an intangible asset?