Financial statements are typically prepared in the following order:
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Income statement, statement of retained earnings, balance sheet.
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An account linked with another account that has an opposite normal balance and is subtracted from the balance of the related account is a(n):
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contra-account
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Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:
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Accrued expenses.
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The accounting principle that requires revenue to be recorded when earned is the:
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Revenue recognition principle.
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A roofing company collects fees when jobs are complete. The work for one customer, whose job was bid at $3,000, has been completed as of December 31, but the customer has not yet been billed. Assuming adjustments are only made at year-end, what is the adjusting entry the company would need to make on December 31, the calendar year-end?
On December 31, Winters Company's Prepaid Rent account had a balance before adjustment of $6,000. Three months' rent was paid in advance on December 1, the first day of the lease term. The adjusting entry needed on December 31 is:
Closing the temporary accounts at the end of each accounting period does all of the following except:
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Has no effect on the retained earnings account.
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At the beginning of the year, a company's balance sheet reported the following balances: Total Assets = $225,000; Total Liabilities = $25,000; Total Paid-in capital of $100,000; and Retained earnings = $100,000. During the year, the company reported revenues of $46,000 and expenses of $30,000. In addition, dividends for the year totaled $20,000. Assuming no other changes to Retained earnings, the balance in the Retained earnings account at the end of the year would be:
