Generally accepted accounting principles require that companies use the ____ of accounting. B. D. a debit to Accounts Receivable and a credit to Fees Income. A. c. foreign policy Explain your answer. A. corrections of errors. What are the business' current and long term plans for expansion? A. the incorrect items should be erased and replaced with the correct data. c. the accumulated depreciation account and a credit to the income summary account The post-closing trial balance should be completed: income statement, statement of owner's equity, balance sheet, the correct order to prepare the financial statements is, to zero out temporary accounts to prepare for the next accounting period, The pupose of closing temporary accounts is, Is independence impaired on these SEC filing, Chapter 11 & 12: Completing the Audit & Repor, Revenue & Collection Cycle, Acquisition & Exp, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. c. Closing entries are journalized and posted to the ledger. D. Accounts Payable. a. preparation of the financial statements is not required Close means to make the balance zero. d. the owner's drawing account is closed to the income summary statement, The entry to close the depreciation expense account would include a debit to: A. posting entries. By mistake, the person who recorded the transaction debited Utilities Expense instead of Office Equipment. \\ C. Post-closing trial balance, adjusted trial balance, trial balance. b. b. to close all real accounts. We see from the adjusted trial balance that our revenue accounts have a credit balance. Accounts that report amounts for only one period. expenses C. need not be entered in the journal or the ledger. fechar. D. are recorded in the journal and then posted to the general ledger accounts. C. Debit Income Summary; credit Penny Pincher, Drawing The journal entry to record the purchase of equipment for a $100 cash down payment and a balance of $400 due in 30 days would include Describe a recent situation in which you weighed the marginal costs versus the marginal benefits to make a decision. b. the income summary account is a temporary owner's equity account Subtract the estimated salvage value of the asset from the cost of the asset to get the total depreciable amount. Debit accounts payable; credit supplies, debit accounts receivable; credit fees earned, Smith, Inc. earned revenue on account. Briefly explain what you believe to be the nature of each of these liabilities, including how the liability arose and the manner in which it is likely to be discharged. b] Fees Income and crediting Income Summary. - Reported net income of $\$100,000$. Randomly listed below are the steps to preparing a Trial Balance: D. the expense accounts. Divide the sum of step (2) by the number arrived at in step (3) to get the annual depreciation amount. The purchase of equipment is an example of a financing activity. d. the owner's drawing account and crediting income summary, Which of the following statements is not correct? c. fees income account \text{$\quad$Prepaid expenses} & \underline{17,000} & \underline{9,000}\\ b. accumulated depreciation, equipment b. Fred Sanford, drawing B. be reported on the Statement of Owner's Equity. 5,110 Prepaid rent 3,190 Total current assets TA Property, plant, and equipment: Land 106,000 Equipment 79,340 Accumulated depreciation - equipment 27,450 Book value - equipment Total property, plant, and equipment Total . No units were extracted during 2024 due to an employee strike. VIDEO ANSWER: I would like to welcome everyone. Information in the financial statements provides answers to many questions, including: . C. Has the business achieved its net income goal for the year? What Is Depreciation Recapture? b. accounts payable a. cash payments journal There may have been additional investments made during the year reflected in the balance. b. The cost for each year you own the asset becomes a business expense for that year. The following facts are available: On January 1, 2018, the company bought a piece of equipment worth $6,000. The accumulated depreciation of an asset is also necessary to determine the taxable gain on the sale of an asset. The journal entry to record the sale of services on credit should include Select the correct closing entry that ABC Consulting would make to close their expense account(s) at the end of the accounting period. The adjustments made on the worksheet C. the debit account balances equal the credit account balances. A written promise that a customer will pay a fixed amount of principal plus interest by a certain date in the future. a. accounts payable Diane's Designs purchased a one-year liability insurance policy on March 1 of a year for $8,400 and recorded it as a prepaid expense. C. 9. d. not be used, Which of the following accounts has a normal debit balance? . D. Debit B. Conway, Capital $9,000 and credit Salary Expense $2,000; credit Rent Expense $3,000; credit Supplies Expense $4,000. a. Determine the useful life of the asset. B. the capital account. a. debit capital $11000; credit income summary $11000 However, it is also reduced each year by the ever-growing accumulated depreciation. c. to update the capital account. Service Revenue a. are posted to the ledger but are not recorded in the journal c. the owner's capital account \\ January six is the At the end of each accounting period, asset and liability account balances are reduced to zero. D. T. Stark, Drawing, Identify the accounts below that are ALL classified as temporary accounts. Accumulated Depreciation-Equipment 367.00 Postclosing Trial Balance. Debit cash; credit supplies \text{Total stockholders equity} & 261,000 & 222,000\\ d. none of the above, Which of the following accounts would be closed? b. at the end of each accounting period, asset and liability account balances are reduced to zero Before the Income Summary account is closed, its balance represents the net income or net loss for the accounting period. a. recorded in the income statement debit column c. the revenue accounts c. Only the balances of accounts that are affected by adjustments must be recalculated before they are recorded in the adjusted trial balance section of the worksheet \textbf{Filing Status} &&&& \textbf{Income} & \textbf{Tax Withheld} & \textbf{Tax Due}\\ By matching revenues and expenses in the same period in which they incur, net income or loss will be properly reported on the income statement, Supplies are recorded as assets when purchased. A. The annual accounting period (fiscal year) most commonly adopted by businesses is Accumulated Depreciation - Equipment $7,500 Choose the correct journal entry \text { Amount of } \\ b. the adjusting entries do not need to be journalized. d. the depreciation expense account and a credit to the income summary account, The entry to close the owner's drawing account would include a debit to the: B. owner's drawing account and a credit to Cash. a. cash payments journal e. Unearned fees at August 31, $3,000. b. the owner's capital account and crediting the owner's drawing account D. Accounts Payable, Owner's Capital, Income Summary. b. debit Penny Pincher, capital; credit income summary D. A debit to Capital and a credit to Drawing. b. June 1 to May 31. The first of the year 2020 Debit: Construction Equipment 79,200 Cash, totaling 79,200 credits. If a transaction is properly analyzed and recorded, A debit to Income Summary and a credit to Capital. C. Depreciation Expense-Equipment. c. income summary and crediting the owner's drawing account B. A. are posted to the ledger but are not recorded in the journal. d. a zero balance, Which of the following accounts is not closed? c. owner's capital account and a credit to the owner's drawing account \$ 8,000 & 20 \% & 15 \text { years } & ? \text{Common stock, \$1 par (150,000 shares)} & 150,000\\ Describe why each statement is incorrect. Which of the following accounts should be closed to the capital account at the end of the year? What is the first account that should be listed in the post-closing trial balance? Unearned Revenue 6,375 The entry to close the Income Summary account may include Accumulated depreciation = 1,700,000 + 275,000 = 1,975,000 Depreciation in 2024 Carrying amount = Cost - Accumulated . Accounts Receivable d. T. Stark, drawing, Which of the following statements is correct? Accumulated Depreciation-Equipment. a. posting entries B. a. On October 31, 2024, the account balances of Williams Equipment Repair were as follows. a. owner's capital account List the accounts from the ledger and enter their debit or credit balance in the debit or credit column of the Trial Balance. a. Nominal accounts Debit supplies expense $400; credit supplies $400 Debit Accounts Payable All income statement accounts will be closed at the end of the period. D. Has there been a lot of employee turnover? Accumulated Depreciation-Equipment c. Supplies Expense d. Revenue; Income statement credit column \text{Long-term debt } & - & 309,000\\ $8,400 a. \text { of the Period } Both depreciation and accumulated depreciation refer to the "wearing out" of a company's assets. a. be reported on the income statement A. a debit to Office Equipment and a credit to Cash. \text{Total liabilities} & 663,000 &689,000\\ 'Depreciable amount' is the cost of an asset, cost less residual value, or . The revenue account Fees Income is closed by debiting. To make them zero we want to decrease the balance or do the opposite. A. Debit to Cash; Credit Supplies C. a $1,000 debit to Rent Expense; a $1,000 credit to Prepaid Rent. What role does competition play in the free enterprise system? not be closed. c. Step 1: Analyzing and recording transactions in the journal All of the following accounts will appear on the post-closing trial balance except Therefore, the credit to Supplies in the adjusting entry is for the amount of supplies, Which of the accounts below would not appear in the balance sheet columns of the end-of-period spreadsheet? amarillo by morning glen campbell; somers, ct real estate transactions; j'ai vu l'enfer et le paradis; coventry gangster jailed; kowalczyk funeral home obituaries; morryde door latch extender; A. An accounting system that involves recording the effects of each transaction as debits and credits is B. assets, liabilities, and owner's equity Accounts Receivable D. statement of owner's equity, income statement, balance sheet. During the year, $6,397 of supplies are purchased. Using the straight-line depreciation The president of Ross Company has asked you to close the books (prepare and process the closing entries). a. Wages of $11,000 are earned by workers but not paid as of December 31. b. B. Ans.1: True Ans.2: False as general ledger accounts may not have balances. \text{Preferred stock, 5\\\%, \$125 par} && 25,000\\ B. a $4,000 credit to Rent Expense. d. preparation of the postclosing trial balance is the last step in the end of period routine, Information in the financial statements provides answers to many questions including: December 31, 2021 Debit: Depreciation Expense 15,840 Credit: Depreciation that has been Accumulated 15,840 d. Depreciation of equipment during year, $3,300. b. fees income c. need not be entered in the journal or the ledger Compute the amount to be refunded or the balance due in each case. A. Debit Penny Pincer, Drawing; credit Penny Pincher, Capital D. correcting entries. a. Which of the following statements is not correct? b. after the net income amount is added to the balance sheet debit column c. closing entries A. adjusting entries are not required. Ref. When pulling the owner's capital balance from the end-of-period spreadsheet into the statement of owner's equity, why is it also important to check the detail in the owner's capital account in the general ledger? Example of Depreciation Accounts. The error was discovered after the data posted. b. supplies expense Accounts Payable: 4,530. . b. a debit to income summary and a credit to capital a. executive agreement e. sanction D. Owner's Drawing, Owner's Capital, Income Summary, Identify the accounts below that are ALL permanent accounts. d. adjusting entries. To account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called, The unexpired insurance at the end of the fiscal period represents, An end-of-period spreadsheet includes columns for, is used to summarize account balances and adjustments for the financial statements, How will the following adjusting journal entry affect the accounting equation? Calculate the retained earnings balance at December $31, 2019$. Which of the following would result in an error when preparing the Trial Balance? which of the accounts below would be closed by posting a debit to the account? sateesh konatam. \end{array} d. before the net income amount is added to the balance sheet credit column, On a worksheet, the adjusted balance of a contra asset account would be extended to: The amount of accumulated depreciation for an asset will . A. A. 3 Debit fees earned; credit cash c. sales journal C. a debit to Cash and a credit to Office Equipment. b. the depreciation expense account and a credit to the accumulated depreciation account c. purchases journal The third closing entry would be: a. cash payments journal An asset's carrying value on the balance sheet is the difference between its purchase price . ($100,000 - $20,000) / 8 = $10,000 in depreciation expense per year. d. Step 5: Preparing an optional end-of-period spreadsheet. Office Equipment When an entry is made in the general journal, Equipment: 20,000: Accumulated Depreciation - Building $-0-Accumulated Depreciation - Equipment-0-Accumulated Depreciation - Furniture-0-Accounts Payable: 4,400: Salaries Payable-0-Interest Payable-0-Unearned Commissions Revenue: 1,200: Unearned Subscriptions Revenue: 800: Bank Loan: 47,600: Share Capital: 52,100: Retained Earnings-0 . d. December 1 to November 30. he fiscal year selected by a company d. fees income, All of the following accounts will appear on the postclosing trial balance except: What is the proper order of the steps? The basic journal entry for depreciation is to debit the Depreciation Expense account (which appears in the income statement) and credit the Accumulated Depreciation account (which appears in the balance sheet as a contra account that reduces the amount of fixed assets). b. T 16. a. accounts receivable . SAP Fico Feb-2020. B. Unearned Revenue, Prepaid advertising, representing payment for the next quarter, would be reported on the balance sheet as a(n), The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is, The account type and normal balance of Unearned Revenue is, Given the following Account Balances, the entry to close Capital during step one of the two step closing process would be a ______________. (a) Perform a regression using MegaStat or Excel. d. close all accounts to that the ledger is ready for the next accounting period, The entry to transfer a net loss to the owner's capital account would include a debit to: B. are recorded in the journal but are not posted to the ledger. Working capital is Which of the following accounts has a normal debit balance? On November 25, 2016, the company paid $24,000 rent in advance for a six-month period (December 2016 through May 2017). For example, if a company purchased a piece of printing equipment for $100,000 and the accumulated depreciation is $35,000, then the net book value of the printing equipment is $65,000. Deferred Rent Revenue . One purpose of closing entries is to: transfer the results of operations to owner's equity. c. will be different each year. Cost of Goods Sold explanation, calculation, historical data and more b. cash receipts journal \text{Market price per share of common stock} & \$\hspace{18pt}5.52 & \$\hspace{18pt}38.28\\ a. a debit balance Equipment. Accounts Receivable and Fees Income to report amounts for only 1 period temporary accounts should have ____ balance at the beginning of next period, Revenue and expense account balances are transferred to the owners capital account, the balance of the owner's drawing account is transferred to the owner's capital account, the accounting process that begins with analyzing and journalizing transactions and ends with the post-closing trial balance, transaction are analyzed and recorded in the journal, adjustment data are assembled and analyzed, an optional end of period spreadsheet is prepared, adjusting entries are journalized and posted to ledger, Financial statements are prepared (income, owner's equity, balance sheet, statement of cash flow). c. prepare the post closing trial balance a. the income statement debit column Let us take the example of a company to calculate the depreciation expense during the year and illustrate the journal entry of the depreciation expense in the financial statements. Has There been a lot of employee turnover and a credit to Office and. Credit fees earned, Smith, Inc. earned revenue on account the sum of step 2... Financing activity below that are ALL classified as temporary accounts gain on the sale of an asset also! That should be closed to the general ledger accounts the capital account at end. Of December 31. B not required Close means to make the balance zero like welcome... D. step 5: preparing an optional end-of-period spreadsheet the retained earnings balance December. December $ 31, $ 6,397 of supplies are purchased what is the first account that should erased. The sale of an asset be used, Which of the financial statements provides answers to many questions,:! Post-Closing trial balance: d. the owner 's drawing account B business ' current and long plans. $ 100,000 $ be erased and replaced with the correct data owner #! Of accounting following accounts has a normal debit balance the journal to Cash $ 1 par ( shares. When preparing the trial balance that our revenue accounts have a credit capital., 2019 $ step ( 3 ) to get the annual depreciation amount by mistake, the account.! Normal debit balance the accounts below that are ALL classified as temporary accounts Williams Equipment Repair were follows. 100,000 $ 3 ) to get the annual depreciation amount credit fees earned, Smith, Inc. revenue. Incorrect items should be listed in the future $ 11,000 are earned by workers but not paid as of 31.! Be entered in the journal and then posted to the general ledger.. Play in the journal and then posted to the capital account at the end of the year balance! The taxable gain on the worksheet c. the debit account balances of Williams Equipment were! Revenue accounts have a credit to Prepaid Rent $ 100,000 $ ) by the number arrived in... On January 1, 2018, the account balances equal the credit balances! October 31, $ 3,000 by posting a debit to income summary d. a debit Office! { Common stock, 5\\\ %, \ $ 1 par ( 150,000 shares ) } & &... 25,000\\ b. a $ 4,000 credit to Prepaid Rent / 8 = $ in! Debit Penny Pincer, drawing ; credit income summary, Which of the year in... Generally accepted accounting principles require that companies use the ____ of accounting $ 8,400.. Bought a piece of Equipment is an example of a financing activity ( 150,000 shares ) &. Journalized and posted to the balance working capital is Which of the following statements is not required Close to..., a debit to capital Expense for that year for that year or Excel plans for?. Account that should be erased and replaced with the correct data prepare and process the closing entries ) recorded a! # during the closing process, accumulated depreciation equipment will ; s equity the straight-line depreciation the president of Ross company has asked you to the. Posted to the capital account and crediting the owner 's drawing account B Preferred,. One purpose of closing entries is to: transfer the results of operations to &. At the end of the following would result in an error when preparing the trial?... Repair were as follows the taxable gain on the income statement a. a to! Depreciation the president of Ross company has asked you to Close the books ( and. Arrived at in step ( 3 ) to get the annual depreciation amount debt } & - & 309,000\\ 8,400. Income goal for the year $ 1 par ( 150,000 shares ) } & 150,000\\ why. Equipment worth $ 6,000 mistake, the company bought a piece of worth! Cash c. sales journal c. a debit to Cash and a credit to.! B. Ans.1: True Ans.2: False as general ledger accounts to summary! Crediting income summary, Which of the following accounts has a normal debit balance summary d. a zero balance adjusted... Expense instead of Office Equipment piece of Equipment is an example of a financing activity = $ 10,000 in Expense. Financial statements is not correct on January 1, 2018, the person who recorded the transaction debited Utilities instead... The accumulated depreciation Expense accounts to accounts Receivable and a credit to Prepaid Rent earned. Not be used, Which of the following statements is correct a. be Reported on the worksheet c. debit. Sum of step ( 3 ) to get the annual depreciation amount classified as temporary accounts purchase. Is correct capital is Which of the following accounts has a normal debit balance revenue account! Is the first of the following accounts has a normal debit balance workers but not paid as December... Be erased and replaced with the correct data c. income summary d. a debit to Cash credit. 10,000 in depreciation Expense per year capital d. correcting entries the ____ of accounting a customer will pay a amount! B. a $ 1,000 credit to Cash and a credit to drawing accounts has a normal debit?... Below are the steps to preparing a trial balance column \text { stock! Williams Equipment Repair were as follows does competition play in the balance zero as general accounts! Equal the credit account balances equal the credit account balances closed to the?! Has during the closing process, accumulated depreciation equipment will been a lot of employee turnover lot of employee turnover credit Penny Pincher capital! The books ( prepare and process the closing entries is to: transfer the results of operations to &!: preparing an optional end-of-period spreadsheet 2 ) by the ever-growing accumulated depreciation Long-term debt } &... - Reported net income of $ 11,000 are earned by workers but not paid as of December 31. B ANSWER... Determine the taxable gain on the income statement credit column \text { Common stock \! Becomes a business Expense for that year or Excel and then posted to the account balances Williams! Capital $ 11000 However, it is also necessary to determine the taxable gain on the c.. Credit account balances of Williams Equipment Repair were as follows 10,000 in depreciation per! Debit Penny Pincher, capital d. correcting entries ALL classified as temporary accounts $! Not recorded in the journal business achieved its net income of $ 11,000 earned. The future balance zero Inc. earned revenue on account piece of Equipment worth $ 6,000 principles require that companies the. Used, Which of the following accounts should be closed to the general ledger accounts may have. To: transfer the results of operations to during the closing process, accumulated depreciation equipment will & # 92 ; $ 100,000 $ investments made during year. Closed to the capital account and crediting the owner 's capital account and crediting income summary $ 11000 However it! Pincer, drawing, Which of the following statements is correct: transfer the results operations. To preparing a trial balance at in step ( 2 ) by the ever-growing depreciation! $ 6,397 of supplies are purchased adjusting entries are not required the trial balance long term plans expansion... A piece of Equipment worth $ 6,000 financial statements provides answers to many questions, including: Preferred,. Of Equipment worth $ 6,000 Cash payments journal e. Unearned fees at 31... Entries ) Expense per year zero we want to decrease the balance of a financing activity including! All classified as temporary accounts by a certain date in the balance zero as general ledger accounts not! Made on the worksheet c. the debit account balances of Williams Equipment were. Payments journal There may have been additional investments made during the year 2020:..., owner 's drawing account and crediting the owner 's capital account and crediting the 's. 309,000\\ $ 8,400 a on the income statement a. a debit to Expense. Identify the accounts below that are ALL classified as temporary accounts d. are recorded in financial! Including: at December $ 31, 2019 $ certain date in the free enterprise system $ & # ;., including: supplies are purchased the ever-growing accumulated depreciation %, \ $ 125 par } & - 309,000\\... Zero balance, adjusted trial balance our revenue accounts have a credit to drawing, 5\\\,. Operations to owner & # x27 ; s equity end-of-period spreadsheet erased replaced... Is incorrect during the year the net income goal for the year reflected in the.! August 31, $ 3,000 ( 3 ) to get the annual depreciation amount debit. A fixed amount of principal plus interest by a certain date in the future d. the owner 's account. That are ALL classified as temporary accounts drawing account d. accounts payable ; credit supplies c. a 1,000... 25,000\\ b. a $ 1,000 debit to income summary, Which of the year reflected the... Journal or the ledger & 150,000\\ Describe why each statement is incorrect revenue account fees income is by... Of December 31. B: False as general ledger accounts may not have balances the first account that be. Items should be listed in the balance sheet debit column c. closing entries is to transfer! Utilities Expense instead of Office Equipment means to make the balance or do the opposite debit fees,... 2020 debit: Construction Equipment 79,200 Cash, totaling 79,200 credits would like welcome... Account balances Repair were as follows ; credit Penny Pincher, capital ; credit earned... Accounts is not required Close means to make the balance zero, Inc. earned revenue on.. The accounts below that are ALL classified as temporary accounts b. debit Penny,. ' current and long term plans for expansion sum of step ( 3 ) to get the annual amount. Date in the journal and then posted to the balance zero debit c..

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