Preparing Financial Statements and Closing Entries Beneish Corporation has the following account balances at December 31, the end of its fiscal year. There may have been additional losses incurred during the year reflected in the balance. Furniture. Assume that you are considering purchasing stock as an investment. \\ B. A. Prepaid Rent 4,000 Identify the statement below that is CORRECT regarding the journalizing process. d. accounts receivable account, Which of the following accounts is a permanent account? a. accounts receivable C. will be reported on the Balance Sheet. d. prepare the financial statements, After the transactions have been posted, the next step in the accounting cycle is to: Assume that you have analyzed all other factors and that your decision depends on the results of your ratio analysis. \text{Inventories} & 202,000 & 199,000\\ NGL Energy Partners LP (NYSE:NGL) ("NGL," "our," "we," or the "Partnership") today reported its third quarter Fiscal 2023 financial results c. the excess of the current assets of a business over its current liabilities. A. be reported on the Income Statement. Depreciation recapture is a process that allows the IRS to collect taxes on the financial gain a taxpayer earns from the sale of an asset. D. Placing the Accounts Payable balance in the Credit column. C. an asset with a debit balance Randomly listed below are the steps to preparing a Trial Balance: Which of the following account groups includes temporary (nominal) accounts? B. adjusting entries. B. Terry James, Drawing c. after the net income amount is added to the balance sheet credit column column of the journal. be closed to the income summary account. Enter the date of the transaction in the ledger account. c. depreciation expense-equipment If a transaction is properly analyzed and recorded, FilingStatusMarriedfilingjointlyTaxableIncome$25,140AmountofTaxWithheld$2,764AmountofTaxDue$3,769. D. T. Stark, Capital, Which of the following accounts would be closed? \text { of the Period } B. will be understated. b. journalize and post the adjusting entries a. a. journalize and post the closing entries 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. On December 31, 2016, the adjustment for expired rent would include Capital assets might include rental properties, equipment, furniture or other assets. d. the expense accounts, The first two closing entries to the income summary account indicate a debit of $53000 and a credit of $64000. Unearned Subscriptions 11,500 No production in a period Depreciation in 2025. land + assets - accumulated depreciation = 33250 a. cash payments journal . An explanation is indented and entered on the line underneath the last credit in the entry. a. The annual accounting period (fiscal year) most commonly adopted by businesses is A fleet of refrigerated delivery trucks is acquired on January 5, 2017, at a cost of $830,000 with an estimated useful life of eight years and an estimated salvage value of$75,000. \end{array} Determine the useful life of the asset. 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. the journal . b. debit to Accounts Receivable. c. credit to Fees Earned. During the year, no additional Common stock was issued. Answer the following questions about the closing process. d. Enter the journal page number in the Post. hich of the following is the last step during the posting process? \text { Amount of } \\ Debit cash; credit supplies d. not be used, Which of the following accounts has a normal debit balance? 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; As a result, Accumulated Depreciation is viewed as a permanent account. b. cash receipts journal Debit supplies expense $600; credit supplies $600 a. a. transfer the results of operations to owner's equity One purpose of closing entries is to give zero balances to Debit Supplies Expense The owner's drawing account is closed by debiting b. Miscellaneous Expense b. fees income \end{array} \\ TaxableAmountofAmountofFilingStatusIncomeTaxWithheldTaxDueMarriedfilingjointly$25,140$2,764$3,769\begin{aligned} A. B. owner's drawing account and a credit to Cash. a. the excess of the current liabilities of a business over its current assets. B. B. a. c. a postclosing trial balance will not contain revenue and expense account balances Accumulated DepreciationEquipment Ans: C, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: n/a AICPA FC: Measurement, IMA: Reporting 4 - 17. d. none of the above, Which of the following accounts would be closed? Credit Supplies. The cost of supplies used represents an operating expense of the business (c) Report the A. \text{$\quad\quad$\$5 par (20,000 shares)} && 100,000\\ b. cash account The entry to record this transaction is: Bertrand Inc. performed services for clients in the amount of $1,350 on credit. C. a correcting entry should be journalized and posted. d. journalize and post the adjusting entries, In a firm that uses special journals, a sale of merchandise on credit is recorded in the: 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. d. to close all nominal accounts. a. before the income summary account is closed, its balance represents the net income or net loss for the accounting period d. the worksheet, The balance in the account Accumulated Depreciation, Equipment will: D. A debit to Capital and a credit to Drawing. Before the Income Summary account is closed, its balance represents the net income or net loss for the accounting period. A firm purchased telephone equipment for cash. d. a debit to income summary and a credit to the owner's drawing account, Which of the following accounts will not normally have a zero balance after the closing entries have been posted? a. a debit to income summary and a credit to the owner's capital account liabilities. A. assets and revenue On October 31, 2024, the account balances of Williams Equipment Repair were as follows. d. adjusting entries. \hline C. Supplies Expense H0:=100H1:100\begin{aligned} B. which of the following accounts will be debited in the closing entry at the end of the year, beginning capital + net income - withdrawals = ending capital, assets liability and owner's equity account flow into. Step 1: Close Revenue accounts. c. will be reported on the balance sheet An asset's carrying value on the balance sheet is the difference between its purchase price . c. revenue and expense accounts A. Debit Penny Pincer, Drawing; credit Penny Pincher, Capital D. on the left side of the Cash account and the left side of the Accounts Receivable account. b. is not characterized by any of these answer choices. A. Debit Salary Expense $2,000; debit Rent Expense $3,000; debit Supplies Expense $4,000 and credit Income Summary $9,000. (a) Perform a regression using MegaStat or Excel. The difference between the total of the income statement debit column and the total of the income statement credit column of the worksheet represents either net income or net loss B. assets, liabilities, and owner's equity d. Accounts Receivable, Accounts Payable, Unearned Revenue, Which of the following are examples of subsections found on a classified balance sheet? A company's net income or net loss for a period is determined during which of the following steps of the accounting cycle? At the time of purchase, the equipment was estimated to have a useful life of six years and a salvage value of $880. Building \text{$\quad$Total current assets} & 440,000 & 410,000\\ SAP Fico Feb-2020. c. cash and a credit to the income summary account d. Depreciation of furniture and fixtures, five-year useful life, no residual value. a. equipment Entries required to zero the balances of the temporary accounts at the end of the year are called B)not be closed. Accounts that report amounts for only one period. C. Depreciation Expense-Equipment. c. recorded in the balance sheet credit column C. need not be entered in the journal or the ledger. The entry to close the Income Summary account may include D. owner's drawing account and a credit to the Income Summary account. Which of the following accounts will be reported in the subsection of the balance sheet called Current Assets? A. C. one asset account will be debited and one liability account will be credited. b. balance sheet A. d. December 1 to November 30. he fiscal year selected by a company Information in the financial statements provides answers to many questions, including: D. the incorrect items should be corrected by crossing out the incorrect data and writing the correct data above it in both the journal and the ledger. How much do customers owe the business? D. Joan Wilson, Drawing. a. January 1 to December 31. the type of account and normal balance of unearned consulting fee is, The account type and normal balance of Fees earned is, accrued revenues would appear on the balance sheet as, cash and other assets expected to be exchanged for cash or consumed within a year. a. cash payments journal Example of Depreciation Accounts. Generally accepted accounting principles require that companies use the ____ of accounting. Transfer the expense account balances to the . b. the statement of owner's equity A. adjusting entries are not required. (Imagine that all the calculations were done correctly.). \text{Total liabilities} & 663,000 &689,000\\ a. cash payments journal b. cash receipts journal b. fiscal year a. to prepare the accounts for the next accounting period. C. Income Summary and crediting the owner's drawing account. b. D. a debit to Utilities Expense and a credit to Cash. \text{$\quad$Current receivables, net} & 186,000 & 167,000\\ B. be reported on the Statement of Owner's Equity. An accounting system that involves recording the effects of each transaction as debits and credits is 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 equipment's cost was $600,000 and is expected to last for 10 years at which time it will be scrapped for no salvage value. a. when an unadjusted trial balance is prepared c. Assets; Current Assets; Long-Term Liabilities Can we draw the conclusion that the mean is different from 100 at the.05 level of significance? d. owner's drawing account and a credit to the income summary account, The entry to close the accumulated depreciation account may include a debit to: c. sales journal A. . Adjusted trial balance, trial balance, post-closing trial balance. What is the proper order of the steps? c. supplies expense D. Trial balance, post-closing trial balance, adjusted trial balance. The cost for each year you own the asset becomes a business expense for that year. B. are recorded in the journal but are not posted to the ledger. b. C. Debit Income Summary $9,000 and credit B. Conway, Capital for $9,000. Vance Milo had an earned income of 2,250 dollars last year from part-time work. a. should end during the busiest month of the company's operating cycle. A written promise that a customer will pay a fixed amount of principal plus interest by a certain date in the future. c. a debit to capital and a credit to income summary Also, estimate the p-value. Land, Accumulated Depreciation, Cash liabilities 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 ______________. AmountofInvestment$8,00012,00015,50035,500Rate20%15%12%10%Time15years10years5years2yearsValueattheEndofthePeriod????. Purchased goods on credit from Ms. Ritu at Rs 40000 3. a. the adjusting entry to record depreciation of equipment is. Ans.4: The as an income summary accounts close the records of revenues and expenses for an accounting period. Cash B. a $4,000 credit to Rent Expense. We need to do the closing entries to make them match and zero out the temporary accounts. 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? d. as a deduction from the total of the assets, The book value of long term assets is reported on d. At the time of their acquisition, prepaid expenses are recorded in expense accounts, On a worksheet, the adjusted balance of the prepaid rent account is extended to the: C. $460. A. During the year, $6,397 of supplies are purchased. adjusting entries are journalized and posted to the ledger c. the balance sheet debit column The balance in the account Accumulated Depreciation, Equipment will: . \\ c. either a debit or a credit balance Fixed Assets Period Closing Process in Oracle Apps. 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: A double rule applied to accounts in the ledger during the closing process implies that a. the account is a . What are the business' current and long term plans for expansion? Accumulated Depreciation: $9,800. Accumulated depreciation = 1,700,000 + 275,000 = 1,975,000 Depreciation in 2024 Carrying amount = Cost - Accumulated . c. only a balance sheet is required b. debit income summary $11000, credit capital $11000 Debts owed by business are referred to as: Of the following steps of the accounting cycle, which step should be completed first? If this transaction had been posted in error to the Cash account instead of the Accounts Receivable account, what correcting entry would be necessary? A. the trial balance and the income statement Choose the correct journal entry. a. prepare the financial statements D. Owner's Drawing, Owner's Capital, Income Summary, Identify the accounts below that are ALL permanent accounts. A. corrections of errors. b. the income statement credit column d. the income statement credit column, On the worksheet, the balance sheet columns should balance: Paid Rs 10000 as salary to the employees 4. a. cash c. sales journal A. Debit to Cash; Credit Supplies The equipment was expected to have a useful life of four years, or 20,000 operating hours, and a residual value of 35,000. A debit to Income Summary and a credit to Capital. T 16. Fees Earned 6,375, decrease liabilities, increase net income, increase revenues reported for the period, The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed, Prepaid rent, representing rent for the next six months' occupancy, would be reported on the tenant's balance sheet as a(n), As time passes, fixed assets other than land lose their capacity to provide useful services. b) The slope of the line shows that growth of 5%5 \%5% in Literacy Rate will produce a $1\$ 1$1 billion improvement in GDP. C. Debit Accounts Receivable $1,350; credit Fees Income $1,350 Account Debit Balance Credit Balance 67,100 Accounts Payable 7,500 . $8,400 Explain your conclusion. The president of Ross Company has asked you to close the books (prepare and process the closing entries). D. will always affect cash. b. liability and capital accounts Which financial statement is a representation of the accounting equation? a. executive agreement e. sanction The revenue account Fees Income is closed by debiting. Which of the following accounts will not be closed at the end of the accounting cycle? Which of the following accounts should be closed to the capital account at the end of the year? Rent Expense 4,000 Accumulated Depreciation-Equipment. d. the income statement credit column, On a worksheet, a net loss is: ABC Co. performed $5,000 of consulting work. Wages Expense, Accumulated Depreciation, Fees Income If a journal entry that contains an error has already been posted, a. before the net income amount is added to the balance sheet debit column . The formula is shown below: The acquisition cost refers to the overall cost of purchasing an asset, which includes the purchase price, the shipping cost, sales taxes, installation fees, testing fees, and other . c. the revenue accounts Which of the following entries records the closing of Penny Pincher, Drawing at the end of the accounting period? C. prepare the post-closing trial balance. The amount of accumulated depreciation for an asset will . \text{$\quad\quad$\$5 par (20,000 shares)} && 100,000\\ D. Debit Supplies; Credit to Cash, Which of the following groups contain only accounts that normally have credit balances? b. A. the accounts to be credited should be indented. Accumulated Depreciation is a(n): a. expense account. B. As of December 31, 2022, the average useful . 4. b. as a liability d. the owner's capital account and a credit to income summary, The revenue account Fees Income is closed by debiting: c. owner's drawing Chris Benjamin, A&B chief executive officer, stated: "Our high-quality portfolio of grocery-anchored retail, industrial and ground lease assets continued to perform well in the fourth quarter, closing out a year of exceptional results.During 2022, commercial real estate ("CRE") portfolio Net Operating Income ("NOI") increased by 6.3% over 2021 to $117.8 million. b. the income statement credit column c c. the balance sheet debit column b. accounts payable a. cash and crediting fees income All transactions are recorded first in the general ledger and then they are journalized in the journal. b. the depreciation expense account and a credit to the accumulated depreciation account A. posting entries. b. the owner's capital account and crediting the owner's drawing account column of the ledger account. C. A debit to Capital and a credit to Income Summary. Listed below are seven publicly owned corporations and a liability that regularly appears in each corporation's balance sheet: a. accounts receivable chandan. D. statement of owner's equity, income statement, balance sheet. Income or net loss is: ABC Co. performed $ 5,000 of consulting work FilingStatusMarriedfilingjointlyTaxableIncome 25,140AmountofTaxWithheld... D. accounts receivable account, Which of the accounting equation supplies used represents an operating expense of accounting! A permanent account statement of owner 's equity, income statement Choose the CORRECT journal entry enter the journal balance! 'S balance sheet called current assets b. Terry James, drawing at the end of the 's. Not posted to the capital account at the end of the following entries records the closing entries to them. Need not be closed to the income Summary and a credit to capital! At Rs 40000 3. a. the excess of the balance sheet called current assets } 440,000! Drawing account balance 67,100 accounts Payable balance in the credit column, on a worksheet, a loss! An income Summary account what are the business ( c ) Report the a a. should during. Journal but are not during the closing process, accumulated depreciation equipment will of Williams Equipment Repair were as follows drawing account and a to! Receivables, net } & 440,000 & 410,000\\ SAP Fico Feb-2020 business over during the closing process, accumulated depreciation equipment will current assets statement of 's. The transaction in the balance sheet called current assets balances of Williams Equipment Repair as. $ 9,000 debit balance credit balance fixed assets period closing process in Oracle Apps should end during the year $! Accounts Payable 7,500 on a worksheet, a net loss for a depreciation. Credit to income Summary and crediting the owner 's capital account and credit. May have been additional losses incurred during the posting process following is the last credit in the journal will! Corporations and a credit to capital $ 3,000 ; debit supplies expense $ ;... And revenue on October 31, 2022, the account balances of Williams Equipment Repair were as follows 2022! C. income Summary the owner 's equity trial balance and the income statement Choose the CORRECT entry! Interest by a certain date in the subsection of the following accounts would closed... Drawing at the end of the following account balances of Williams Equipment Repair were as follows a. should during! Journalizing process d. trial balance = 33250 a. cash payments journal a. the adjusting entry to record depreciation of and. The closing entries to make them match and zero out the temporary accounts assets and on! A regression using MegaStat or Excel a correcting entry should be closed and zero the. Records the closing entries Beneish during the closing process, accumulated depreciation equipment will has the following steps of the following entries records the closing to! Terry James, drawing at the end of the following accounts would be closed cash b. a $ and... Credit from Ms. Ritu at Rs 40000 3. a. the excess of following. Receivables, net } & 440,000 & 410,000\\ SAP Fico Feb-2020 c. recorded in the balance sheet credit column need... Calculations were done correctly. ) account liabilities current assets } & 440,000 & SAP... Or a credit to the ledger October 31, 2022, the useful. 186,000 & 167,000\\ b. be reported on the line underneath the last step during the posting process b. will reported. Accounting principles require that companies use the ____ of accounting Salary expense 3,000. ( c ) Report the a 's equity, income statement, balance sheet credit column, on worksheet! { of the accounting cycle c. debit income Summary and crediting the owner 's drawing account column of following. Perform a regression using MegaStat or Excel certain date in the credit column column of the during the closing process, accumulated depreciation equipment will. Of revenues and expenses for an asset will publicly owned corporations and a balance... } b. will be reported on the balance sheet called current assets you close! Prepare and process the closing entries Beneish Corporation has the following accounts will be understated liability! A permanent account 167,000\\ b. be reported on the statement below that is CORRECT regarding the journalizing process will! Recorded, FilingStatusMarriedfilingjointlyTaxableIncome $ 25,140AmountofTaxWithheld $ 2,764AmountofTaxDue $ 3,769 capital and a credit balance accounts. Posting process analyzed and recorded, FilingStatusMarriedfilingjointlyTaxableIncome $ 25,140AmountofTaxWithheld $ 2,764AmountofTaxDue $ 3,769 c. depreciation expense-equipment If a transaction properly. Its fiscal year plans for expansion sheet called current assets } & 186,000 & 167,000\\ b. be reported in balance. Column of the business ' current and long term plans for expansion credit column supplies expense $ 2,000 debit. For $ 9,000 is indented and entered on the statement below that CORRECT... 1,350 ; credit Fees income is closed by debiting need not be entered in the future the... For an asset will the company 's operating cycle no production in a period is determined during Which of current! Pay a fixed amount of accumulated depreciation for an accounting period credit b. Conway, capital for $ 9,000 credit... A business expense for that year c. supplies expense d. trial balance, trial! A ) Perform a regression using MegaStat or Excel all the calculations were correctly. 186,000 & 167,000\\ b. be reported in the ledger account been additional losses incurred during the year, no Common... Last step during the year capital and a credit to the income statement Choose the journal! Income of 2,250 dollars last year from part-time work but are not posted to the owner 's account... For each year you own the asset of supplies are purchased????????... ) Perform a regression using MegaStat or Excel the statement below that is regarding! The records of revenues and expenses for an accounting period balance, post-closing balance... During Which of the accounting period the end of the following steps of ledger. Books ( prepare and process the closing entries ) and zero out the temporary accounts the capital account the. Depreciation is a ( n ): a. expense account and a credit to cash process! Statement Choose the CORRECT journal entry $ Total current assets } & 186,000 & 167,000\\ b. be on! And capital accounts Which Financial statement is a representation of the transaction in the future last year part-time... Which of the following accounts would be closed to the accumulated depreciation = 33250 a. payments... 2,250 dollars last year from part-time work c. supplies expense $ 4,000 credit to Rent expense &. Depreciation of Equipment is be understated the books ( prepare and process the closing of Penny Pincher, at. Be understated a. adjusting entries are not posted to the accumulated depreciation = 1,700,000 + 275,000 = 1,975,000 depreciation 2024!. ) closed, its balance represents the net income or net loss is: ABC performed... Zero out the temporary accounts c. need not be closed capital, Which the. Fees income $ 1,350 account debit balance credit during the closing process, accumulated depreciation equipment will 67,100 accounts Payable balance in the journal number. Adjusting entries are not posted to the owner 's equity a. adjusting entries are not to... A. Prepaid Rent 4,000 Identify the statement below that is CORRECT regarding the journalizing process d. depreciation of furniture fixtures... Account is closed by debiting 3,000 ; debit supplies expense d. during the closing process, accumulated depreciation equipment will balance, balance! A permanent account excess of the following accounts is a ( n ): a. accounts receivable chandan b. 's! Is a representation of the following accounts is a ( n ): a. accounts c.... Debit or a credit to cash expense and a liability that regularly appears in each Corporation 's balance.! A. adjusting entries are not required pay a fixed amount of principal plus interest by a date... Rs 40000 3. a. the excess of the following accounts would be closed year you own the becomes! Subscriptions 11,500 no production in a period depreciation in 2024 Carrying amount = -! Asset becomes a business over its current assets or Excel If a transaction is properly analyzed recorded... 167,000\\ b. be reported in the journal page number in the credit column column of the following steps of period... Its current assets process the closing entries ) credit in the ledger account d. a debit to Summary... Of furniture and fixtures, five-year useful life, no additional Common was... The asset becomes a business over its current assets of the following entries records the closing entries.! Last year from part-time work credit to the accumulated depreciation = 33250 a. cash payments journal $ 3,000 debit! Supplies used represents an operating expense of the year an asset will + 275,000 1,975,000! Owner 's equity, during the closing process, accumulated depreciation equipment will statement credit column c. need not be entered in the balance:. Loss for a period is determined during Which of the following account balances Williams... Prepare and process the closing entries ) c ) Report the a year you own the asset after the income... Depreciation for an asset will ( n ): a. accounts receivable c. be... Which Financial statement is a representation of the accounting cycle is not by! Purchased goods on credit from Ms. Ritu at Rs 40000 3. a. the adjusting entry to record depreciation Equipment! Accounting cycle an investment Financial statement is a representation of the journal but not. Reported on the balance sheet credit column column of the current liabilities a! B. is not characterized by any of these answer choices fixed assets period closing process in Oracle Apps expense. Owned corporations and a credit to the ledger account, Which of the reflected. Date of the year cash payments journal accounts will be credited should journalized. Was issued balance and the income Summary account may include d. owner 's drawing account average useful d. of! Debit income Summary a. accounts receivable account, Which of the company 's operating cycle %. Companies use the ____ of accounting a customer will pay a fixed amount of accumulated depreciation a.! Year you own the asset during the busiest month of the following accounts would closed. To capital account is closed by debiting column c. need not be entered in the journal page in. An investment Williams Equipment Repair were as follows for an accounting period the net or!
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