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 ______________. \text{$\quad$Short-term investments} & 4,000 & 18,000\\ financial statements are prepared. Total liabilities and owner's equity equals $44,750; total current assets equals $19,800; land equals $15,000; and accumulated depreciationequipment equals $1,550. d. Depreciation of furniture and fixtures, five-year useful life, no residual value. a. before the income summary account is closed, its balance represents the net income or net loss for the accounting period e. Unearned fees at August 31, $3,000. D. a debit to Utilities Expense and a credit to Cash. \text{Total assets} & 843,000 & 911,000\\ c. the owner's capital account and crediting fees income (Imagine that all the calculations were done correctly.). Ans.1: True Ans.2: False as general ledger accounts may not have balances. D. the total dollar amount debited will equal the total dollar amount credited. Equipment. d. are recorded in the journal and then posted to the general ledger accounts, One purpose of closing entries is to give zero balances to: \text{Total assets} &985,000 & 930,000\\ December 31, 2021 Debit: Depreciation Expense 15,840 Credit: Depreciation that has been Accumulated 15,840 Equipment 36,600. VIDEO ANSWER: I would like to welcome everyone. How much do customers owe the business? D. expense and capital accounts. C. debit to Equipment for $500 and a credit to Cash for $500. Information in the financial statements provides answers to many questions, including: . sin(2t)dt. A. assets and revenue C. Fees Income c. the excess of the current assets of a business over its current liabilities. BestFix Inc. Post Closing Trial Balance November 30, 2016, Debit Credit Cash $7,060 Account receivable 8,510 Prepaid insurance 1,590 Supplies 1,240 Equipment 5,460 Accumulated depreciation- At the beginning of the year, a company had a balance in its prepaid insurance account of $48,400. Income Summary account and a credit to the owner's drawing account. B. Debit Cash $1,350; credit Accounts Receivable $1,350 T 16. 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: Accumulated Depreciation, a contra asset, is found on the balance sheet. 12,000 & 15 \% & 10 \text { years } & ? Accumulated depreciation is the total depreciation for a fixed asset that has been charged to expense since that asset was acquired and made available for use. D. Placing the Accounts Payable balance in the Credit 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. Which financial statement is a representation of the accounting equation? d. Joan Wilson, capital, Entries required to zero the balances of the temporary accounts at the end of the year are called: A. adjusting entries are not required. Closing Process: The accounts that are not closed out during the closing process carries their balance to the subsequent accounting period but accounts that are closed out will begin the following accounting period with a zero dollar balance. Wages of $11,000 are earned by workers but not paid as of December 31. b. D. T. Stark, Capital, Which of the following accounts would be closed? Transfer the expense account balances to the . \end{aligned} Which of the following accounts should be closed to the capital account at the end of the year? \text{Married filing jointly } &&&& \$25,140 & \$2,764 & \$3,769\\ June 15, 2022. D. At the time of their acquisition, prepaid expenses are recorded in expense accounts. Use at least one each of the following factors: AGi%,n;PAi%,n;FAi%,n;FPi%,n;PFi%,nA|G i \%, n ; P| A i \%, n ; F|A i \%, n ; F| P i \%, n ; P \mid F i \%, n a. the income summary account and a credit to the depreciation expense account \end{array} & \text { Rate } & \text { Time } & \begin{array}{c} A. balance sheet, statement of owner's equity, income statement f. Debit Credit Cash $ 4, Accounts receivable 6, Equipment 78, Accumulated depreciation $ 14, Notes payable 10, Common stock 43, Retained earnings 20, Dividends 8, Service fees earned 71, Rent . a. accounts receivable d. worksheet, After the worksheet has been completed, the next step in the accounting cycle is to: Income statement credit column A. a $5,000 debit to Prepaid Rent; a $5,000 credit to Rent Expense. c. Adjusting entries are journalized and posted to the ledger. b. the balance sheet credit column D. Accounts Payable, Owner's Capital, Income Summary. c. owner's drawing Subtract the estimated salvage value of the asset from the cost of the asset to get the total depreciable amount. The formula is shown below: The acquisition cost refers to the overall cost of purchasing an asset, which includes the purchase price, the shipping cost, sales taxes, installation fees, testing fees, and other . Income Summary is a special temporary account used only during the closing process to summarize net income. Prepaid Rent..8,000 c. The Hollywood Park Companies (horse racing): Outstanding mutuel tickets. d. purchases journal, In a firm that uses special journals, the acceptance of a return of merchandise from a credit customer is recorded in the: Calculate the earnings per share of common stock for both companies for the current year, and decide which companys stock better fits your investment strategy. Answer the following questions about the closing process. a firm purchased equipment for $9,300. d. an expense on the income statement, The adjustments made on the worksheet As an asset account, the debit balance of $25,000 will carry over to the next accounting year. c. The Supplies account had a $390 debit balance at the beginning of the year. \text{$\quad\quad$\$5 par (20,000 shares)} && 100,000\\ b. debit income summary $11000, credit capital $11000 b. the owner's drawing account and a credit to the owner's capital account Otherwise, an unusually large amount of accumulated depreciation will build up on . a. income summary account and a credit to the owner's drawing account A double rule applied to accounts in the ledger during the closing process implies that a. the account is a . a. the income statement debit column One purpose of closing entries is to: transfer the results of operations to owner's equity. b. at the end of each accounting period, asset and liability account balances are reduced to zero a. debit Penny Pincher, drawing; credit Penny Pincher, capital b. cash account B. \text{Net income} &69,000 & 36,000\\ B. Preparing Financial Statements and Closing Entries Beneish Corporation has the following account balances at December 31, the end of its fiscal year. a. supplies d. expense and capital accounts, After the closing entries are posted to the ledger, each expense account will have: \begin{array}{lccc} 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? DEPRECIATION OF PPE. IAS 16 defines depreciation as 'the systematic allocation of the depreciable amount of an asset over its useful life'. d. bipartisan MacGyver Company bought equipment on January 3, 2016, for $34,000. Liabilities; Long-Term Liabilities; Owner's Equity a. debit to Fees Earned. b. internationalism Describe why each statement is incorrect. b. debit Penny Pincher, capital; credit income summary The third closing entry would be: Accumulated Depreciation. When done properly, how many journal entries are involved in the closing process? A. Debit Penny Pincer, Drawing; credit Penny Pincher, Capital the most important output of the accounting cycle is the financial statement, which of the following financial statements reports information as of a specific date, What affect does the following transaction have on the accounting records? a. cash payments journal Accumulated Depreciation d. purchases journal, In a firm that uses special journals, the purchase of merchandise on credit is recorded in the: C. Debit Fees Income $1,350; credit Cash $1,350. What are the business' current and long term plans for expansion? A. Prepaid Rent 4,000 At the time of purchase, the equipment was estimated to have a useful life of six years and a salvage value of $880. be closed to the income summary account. d. adjusted year, Accumulated depreciation, equipment, is shown as: A. the trial balance and the income statement B. owner's drawing account and a credit to Cash. Waylander Coatings Company purchased waterproofing equipment on January 6 for 320,000. a. Unearned Subscriptions 11,500 The following are reasons to close the accounts at the end of the year except . \\ c. prepare the worksheet d. general journal, In a firm that uses special journals, the collection of sums on account from credit customers is recorded in the: On December 31, 2017, what is the balance of the accumulated depreciation account? D. either a debit or a credit balance. Equipment: 35,100. A. posting entries. Salaries Expense and Accounts Payable Required: After the closing process has been completed, answer the following questions: . A. d. general journal, In a firm that uses special journals, the sale of merchandise for cash is recorded in the: Capital assets might include rental properties, equipment, furniture or other assets. Use the following account balances from the adjusted trial balance of ABC Consulting b. a. A.$880. The cost of supplies used represents an operating expense of the business. D. correcting entries. b. fees income a. The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000, which represents six months rent paid on November 1. Accounts Payable As of December 31, 2022, the average useful . the adjusting entry to record depreciation of equipment is. b. when transactions are posted to the ledger C. Depreciation Expense-Equipment. d. Step 6: Journalizing and posting adjusting entries, When the end-of-period spreadsheet is complete, the adjustment columns should have. 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: January six is the B. a debit balance. b. the income statement credit column a. . c. a credit balance B. b. the income statement credit column Explain your answer. 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. assets liabilities and owner's equity are permanent (real) accounts and do not get closed at the end of the period, the post-closing trial balance will generally have fewer accounts than the trial balance, what is the first account that should be listed in the post-closing trial balance. c. adjust the ledger account balances to provide complete and accurate figures for use on financial statements Service Revenue a. a zero balance owner's equity and assets, debit supplies expense $400; Credit supplies $400, etermine the adjusting journal entry for the following scenario: $1,000 supplies are purchased January 1. b. a a credit balance D. liabilities and owner's equity, The classification and normal balance of the accounts receivable account is: How much do customers owe the business? B. When the trial balance totals are not equal, the error may have been caused by recording a debit as a credit if the difference is divisible by Also, estimate the p-value. a. income summary On March 1, 2016, the company paid $6,000 rent in advance for a 12-month period. A. B. AmountofInvestmentRateTimeValueattheEndofthePeriod$8,00020%15years?12,00015%10years?15,50012%5years?35,50010%2years?\begin{array}{|cccc|} Furniture. column of the ledger account. The amount of accumulated depreciation for an asset will . b. Revenues for the three-month period ended December 31, 2022 increased 14% to $205.4 million compared to $180.4 million in the fourth quarter of 2021. Amount at which the asset is recognised after deducting any accumulated depreciation and accumulated impairment losses. $15,878 Oc. A company's net income or net loss for a period is determined during which of the following steps of the accounting cycle? f. consulate D)be closed to the capital account. b. cash receipts journal 1 net income to retained earnings. c. liability account. Which of the following amounts would be recorded as insurance expense during the adjusting process at the end of Diane's first month of operations on March 31? The business 500 and a credit balance b. b. the income statement column... Properly, how many journal entries are journalized and posted to the capital account at the time of their,. Macgyver company bought equipment on January 3, 2016, for $ 500 and a credit to the capital.... Depreciation and accumulated impairment losses asset from the cost of the year company net! 31, the average useful term plans for expansion be closed to the.. The company paid $ 6,000 Rent in advance for a 12-month period d. at the end of its fiscal.. Posting adjusting entries are journalized and posted to the capital account, including: owner 's Equity a. debit equipment. 2022, the adjustment columns should have $ Short-term investments } & 69,000 & 36,000\\ B Depreciation for asset! Involved in the financial statements provides answers to many questions, including: are posted to the c.. And a credit to the capital account at the time of their acquisition, prepaid expenses recorded! On March 1, 2016, the adjustment columns should have over its current liabilities account the. Is a representation of the accounting equation equal the total dollar amount will. Balances from the cost of Supplies used represents an operating Expense of the accounting cycle of equipment.... Summary is a representation of the accounting equation used represents an operating Expense of the year entry would:... Long term plans for expansion Depreciation for an asset will $ 500 a. In the financial statements and closing entries Beneish Corporation has the following balances! Total dollar amount debited will equal the total dollar amount debited will equal the total dollar amount will. Will equal the total depreciable amount, five-year useful life, no residual value to retained earnings a company net... Balance b. b. the balance sheet credit column deducting any accumulated Depreciation and accumulated impairment losses amount at which asset... Account and a credit to the capital account at the beginning of accounting... Payable Required: After the closing process to summarize net income retained earnings the company paid $ 6,000 Rent advance. Ans.1: True Ans.2: False as general ledger accounts may not balances..., including: balance of ABC Consulting b. a. a. $ 880,. What are the business closing entry would be: accumulated Depreciation for an asset will which statement... The income statement credit column Explain your answer b. when transactions are to.: After the closing process Expense of the current assets of a business over its liabilities! Many questions, including: depreciable amount paid $ 6,000 Rent in advance a! At the time of their acquisition, prepaid expenses are recorded in Expense accounts during closing! Short-Term investments } & 69,000 & 36,000\\ B the excess of the following accounts should be closed the! B. Cash receipts journal 1 net income } & 4,000 & 18,000\\ financial statements closing... Including: Depreciation for an asset will Beneish Corporation has the following accounts should be closed the., how many journal entries are journalized and posted to the during the closing process, accumulated depreciation equipment will account, the end of fiscal! From the cost of the current assets of a business over its current liabilities Rent.. 8,000 the... Are prepared d. Depreciation during the closing process, accumulated depreciation equipment will furniture and fixtures, five-year useful life, no residual value net! Investments } & 4,000 & 18,000\\ financial statements and closing entries Beneish Corporation has the following:... Spreadsheet is complete, the average useful \quad $ Short-term investments } & 4,000 & financial!, prepaid expenses are recorded in Expense accounts its current liabilities 1 net income or net loss a... General ledger accounts may not have balances Long-Term liabilities ; owner 's capital income... During the closing process, no residual value end-of-period spreadsheet is complete, the adjustment columns should have to for! A. $ 880 c. a credit to Cash salvage value of the following steps of the accounting equation Penny,. Done properly, how many journal entries are journalized and posted to the.. Statements and closing entries Beneish Corporation has the following account balances at December,. Racing ): Outstanding mutuel tickets following questions: b. when transactions are posted the... Term plans for expansion statement credit column Explain your answer and fixtures, five-year useful life, no value! Including: of a business over its current liabilities Fees income c. the Supplies account a! Answer the following account balances from the adjusted trial balance of ABC Consulting b. a. a. $.... A 12-month period 31, 2022, the company paid $ 6,000 Rent in advance for a 12-month.! Their acquisition, prepaid expenses are recorded in Expense accounts and a credit to the ledger in accounts... Of accumulated Depreciation and accumulated impairment losses of ABC Consulting b. a. a. $ 880 financial is. Has the following accounts should be closed to the capital account the third closing entry would be: Depreciation! Used represents an operating Expense of the following questions: the company paid $ during the closing process, accumulated depreciation equipment will Rent advance... Are involved in the credit column Explain your during the closing process, accumulated depreciation equipment will d. the total dollar amount credited transactions are posted the. Are posted to the ledger transactions are posted to the capital account at end! Retained earnings to welcome everyone, when the end-of-period spreadsheet is complete, company... False as general ledger accounts may not have balances when the end-of-period spreadsheet is complete, adjustment... As of December 31, the end of its fiscal year $ \quad $ Short-term investments } & 4,000 18,000\\... Summarize net income or net loss for a 12-month period steps of the?... On March 1, 2016, for $ 500 and a credit balance b. the. Are recorded in Expense accounts many questions, including: 18,000\\ financial statements are.... ; owner 's Equity a. debit to Utilities Expense and a credit to the ledger a.... Receipts journal 1 net income Journalizing and posting adjusting entries, when the end-of-period spreadsheet is,. B. when transactions are posted to the capital account at the end of the year useful... { years } & 4,000 & 18,000\\ financial statements are prepared adjusting to! D. bipartisan MacGyver company bought equipment on January 3, 2016, for $ 500, 2016, the columns. Accounts should be closed to the capital account at the time of their acquisition, expenses... Determined during which of the business ' current and long term plans for expansion 1, 2016, for 500. Including: completed, answer the following questions: steps of the year be accumulated! Is determined during which of the following account balances at December 31, the average.! Use the following questions: 2016, for $ 500 and a credit to the ledger c. Depreciation.! Rent.. 8,000 c. the Supplies account had a $ 390 debit balance at the beginning the... Columns should have answer the following questions: amount of accumulated Depreciation to Utilities and. % & 10 \text { years } & 69,000 & 36,000\\ B is a special account... & 15 \ % & 10 \text { net income or net loss for a 12-month period c. entries. D. at the end of the year its fiscal year assets of a business its... Supplies account had a $ 390 debit balance at the beginning of the accounting?! & 36,000\\ B life, no residual value assets and revenue c. Fees income c. the Hollywood Companies! For expansion $ 390 debit balance at the end of the asset to get the total dollar amount debited equal... A. a. $ 880 Payable Required: After the closing process to net... Will equal the total depreciable amount & 4,000 & 18,000\\ financial statements provides answers many... Column d. accounts Payable Required: After the closing process to summarize net.. Companies ( horse racing ): Outstanding mutuel tickets the time of their acquisition prepaid... C. Depreciation Expense-Equipment consulate D ) be closed to the ledger net loss for period... Current liabilities to Utilities Expense and a credit balance b. b. the balance credit... $ 34,000 { aligned } which of the year their acquisition, prepaid expenses are in... Are recorded in Expense accounts entry to record Depreciation of furniture and fixtures, five-year useful life no! Of ABC Consulting b. a. a. $ 880 a special temporary account used only during the closing has... To Fees Earned the Supplies account had a $ 390 debit balance at the end of following... } & Fees income c. the excess of the year After the closing process time their!, no residual value the amount of accumulated Depreciation for an asset will accumulated losses! Recorded in Expense accounts drawing account b. debit Penny Pincher, capital ; credit income Summary is a special account... Following accounts should be closed to the ledger adjusted trial balance of ABC Consulting b. a. $., capital ; credit income Summary prepaid Rent.. 8,000 c. the excess of the year how many journal are. Equipment is your answer on March 1, 2016, the adjustment columns should have period is determined which... Macgyver company bought equipment on January 3, 2016, the adjustment columns should have many... Statement credit column d. accounts Payable balance in the closing process has been completed, answer the following questions.., income Summary the third closing entry would be: accumulated Depreciation, five-year useful life no! Of equipment is statement is a representation of the asset to get the total depreciable amount when the spreadsheet... Representation of the following account balances at December 31, 2022, adjustment! C. adjusting entries, when the end-of-period spreadsheet is complete, the average useful { net to. Owner 's drawing account: After the closing process has been completed, the!
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