chapter 4 accounting spring

The first item normally presented on the retained earnings statement is the balance of retained earnings at the end of the period.

current assets; long-term liabilities; property, plant, and equipment

It must be prepared before the retained earnings statement. Miscellaneous expense is listed as the last expense item, regardless of its amount. ----All of these statements are true. It is prepared using the account balances shown in the Adjusted Trial Balance columns of the end-of-period spreadsheet.

6,837

real accounts

Income Summary is used as a temporary clearing account to transfer the nominal accounts to the retained earnings account.

Income Summary

Debit to Income Summary for $10,718 sum of expenses

D, B, A, C, E Has to end with post closing trial balance

Closing entries are journalized and posted to the ledger.

An end-of-period spreadsheet is prepared. Step 3 (An unadjusted trial balance is prepared) of the accounting cycle is required. The work sheet or an end-of-period spreadsheet is optional and not considered part of the formal accounting records.

Enter the ledger account number in the Post. Ref. column of the journal. The new balance of the ledger account is determined after posting is completed. After the transaction is recorded in the ledger account, the account's number is entered in the journal as an indication that the posting has been completed.

Step 9: Journalizing and posting closing entries

a credit to Accounts Receivable. The journal entry to record cash received from clients on account would include a credit to Accounts Receivable.

when financial statements are prepared

liquidity.

Current Assets.

solvency

would be more eager to extend credit to Brown Company. The higher the current ratio, the more solvent and liquid the company and the more likely suppliers will be willing to take credit. The higher the current ratio, the more solvent and liquid the company and the more likely suppliers will be willing to extend credit.