A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing the, Accounts reported on the balance sheet that are carried forward from year to year are known as permanent accounts, What affect will this entry have on the accounting records? c. accounting year b. the owner's capital account and crediting the owner's drawing account All income statement accounts will be closed at the end of the period. Toggle navigation. 3 FINANCING ALTERNATIVES The Severn Company plans to raise a net amount of 270 million to finance new equipment in early 2019. closing entries are journalized and posted to the ledger A. a debit to Equipment for $100 and a credit to Cash for $100. C. revenue and expense accounts. a. be closed to the income summary account Organic revenues increased $16.6 million, or 9 . b. internationalism Accounts Receivable, Depreciation Expense, Fees Income This expense is tax-deductible, meaning it reduces your business's taxable income for the year. A. 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 ______________. All of the following accounts will appear on the post-closing trial balance except B. the double-entry system. On December 31, 2016, the adjustment for expired rent would include \end{array} C. A post-closing trial balance will not contain revenue and expense account balances. b. the income statement credit column The president of Ross Company has asked you to close the books (prepare and process the closing entries). If a business has received cash in advance of services performed and credits a liability ac-count, the The adjustments made on the worksheet $15,878 Oc. c. sales journal a. a zero balance Cash 20,500 d. the income statement credit column, On the worksheet, the balance sheet columns should balance: d. either a debit or a credit balance, A postclosing trial balance could include all of the following except the: B. a debit to Cash and a credit to Accounts Receivable. b. d. All of the above, The asset, liability and owner's capital accounts appear on all of the following except the: b. the income summary and a credit to cash 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 . On November 25, 2016, the company paid $24,000 rent in advance for a six-month period (December 2016 through May 2017). Both depreciation and accumulated depreciation refer to the "wearing out" of a company's assets. Total the debit and credit column of the trial balance On a worksheet, the adjusted balance of the accumulated depreciation account is extended to: On a worksheet, the adjusted balance of the depreciation expense account is extended to: On a worksheet, the adjust balance of the supplies account is extended to: The equipment is estimated to have a useful . \text{$\quad$Inventories} & 212,000 & 181,000\\ Close means to make the balance zero. b. adjusting entries financial statements are prepared. $3,250 c. $11,500 d. None of these choices are correct. Debit cash; credit fees earned Depreciation of property, machinery and equipment is recognized as part of cost and operating expenses (notes 5 and 6) and is calculated using the straight-line method over the estimated useful lives of the assets, except for mineral reserves, which are depleted using the units-of-production method. d. general journal, In a firm that uses special journals, the sale of merchandise for cash is recorded in the: On a worksheet, the adjusting entry to account for depreciation of equipment consists of: If the prepaid expenses are not adjusted assets on the balance sheet: If long term assets are not adjusted, expenses on the income statement. d. not be used, Which of the following accounts has a normal debit balance? 4. Equipment. If a journal entry that contains an error has already been posted, D. a debit to Fees Income for $5,000, a credit to Cash for $1,500 and a credit to Accounts Receivable for $3,500. B. Explain your answer. c. The Supplies account had a $390 debit balance at the beginning of the year. B. a debit to Income Summary and a credit to Cash. Identify the statement below that is CORRECT regarding the journalizing process. 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. b. accounts payable The following facts are available: On January 1, 2018, the company bought a piece of equipment worth $6,000. Accounts Receivable, Depreciation Expense, Fees Income The annual accounting period (fiscal year) most commonly adopted by businesses is A. an asset with a credit balance 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). c. a debit to capital and a credit to income summary a. if the postclosing trial balance does not balane, there are errors in the accounting records a. c. sales journal C. Debit Fees Income $1,350; credit Cash $1,350. 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 Terry James, Drawing and Unearned Revenue Debit fees earned; credit accounts receivable, Which of the following are considered temporary accounts? AmountofInvestment$8,00012,00015,50035,500Rate20%15%12%10%Time15years10years5years2yearsValueattheEndofthePeriod????. A. completing one T account. Accounts Payable 4,690. The purchase of equipment is an example of a financing activity. C. Income Summary and crediting the owner's drawing account. d. not recorded, If a worksheet is prepared at the end of the accounting year, Step 1: Close Revenue accounts. \text{Long-term debt } & - & 309,000\\ The accumulated depreciation of an asset is also necessary to determine the taxable gain on the sale of an asset. b. sales journal The cost for each year you own the asset becomes a business expense for that year. a. cash receipts journal c. Depreciation of office equipment, five-year useful life, 10% estimated residual value per set. a. as a deduction from the cost of the equipment A. only two accounts will be used to record the transaction. B. assets, liabilities, and owner's equity Which of the following accounts will not be closed at the end of the accounting cycle? B. a liability with a debit balance 6-30 If the postclosing trial balance does not balance, the accounting records contain The asset cost minus accumulated depreciation is known as the book value (or "net book value") of the asset. a. C. the debit account balances equal the credit account balances. \text{Common stock, \$1 par (150,000 shares)} & 150,000\\ c. adjust the ledger account balances to provide complete and accurate figures for use on financial statements 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: d. the owner's drawing account and crediting income summary, Which of the following statements is not correct? Calculate the retained earnings balance at December $31, 2019$. b. cash receipts journal Assume a company has equipment which is used in its business. When recording a business transaction into the journal, certain steps are followed. A. balance sheet, statement of owner's equity, income statement Netsales(alloncredit)CostofgoodssoldIncomefromoperationsInterestexpenseNetincomeEdge$595,000452,00089,00069,000GoBee$524,000388,00073,00013,00036,000. Equipment 36,600. b. June 1 to May 31. c. closing entries are entered directly on the worksheet \text{Interest expense} & - & 13,000\\ b. accumulated depreciation B. owner's drawing account and a credit to Cash. Enter the date of the transaction in the ledger account. During the closing process, Accumulated Depreciation, Equipment will. C. Debit Supplies; Credit Accounts Payable \end{array} b. a debit to income summary and a credit to capital (b) State the null and alternative hypotheses for a two-tailed test for a zero slope. Paid Rs 10000 as salary to the employees 4. C. a debit to Cash and a credit to Income Summary. \text{Income from operations} & 89,000 & 73,000\\ B. Placing a Revenue account balance in the Credit column Step 10: Preparing a post-closing trial balance A debit to Income Summary and a credit to Capital. Oa. A business purchases supplies on account. 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? Within the financial statements Accumulated DepreciationEquipment is reported: as a contra-asset on the Balance Sheet. d. 5, After the closing entries are posted to the ledger, each revenue account will have: B. 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. b. debit to Accounts Receivable. b. a debit to income summary and a credit to cash We need to enter adjustment entries in the transaction. c. the balance sheet debit column D. T. Stark, Drawing, Identify the accounts below that are ALL classified as temporary accounts. We see from the adjusted trial balance that our revenue accounts have a credit balance. d. journalize and post the adjusting entries, In a firm that uses special journals, a sale of merchandise on credit is recorded in the: The Statement of Owner's Equity is calculated as follows: At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts: Accounts Receivable, $1,200; Prepaid Insurance, $500; Equipment, $36,200 and Cash, $40,650. b. Miscellaneous Expense Which financial statement is a representation of the accounting equation? Debit supplies $600; credit cash $600 T 16. A. b. accounts payable \text { Investment } f. be closed to the income summary account. During the year, Tuscan had the following selected transactions. Cost of Goods Sold explanation, calculation, historical data and more What role does competition play in the free enterprise system? A. Accumulated Depreciation $8,700. Equipment 80,100 Accumulated Depreciation-Equip. Income Summary account and a credit to the owner's drawing account. Step 4: Assembling and analyzing adjustment data a. sin(2t)dt. the chart of accounts A. assets and revenue Deferred Rent Revenue . Equipment: 35,100. be closed to the drawing account. a. accounts receivable Depreciation Expense Supplies Expense Data needed for year-end adjustments are as follows: a. Unbilled fees at August 31, $9,150. d. purchases journal, Fundamentals of Financial Management, Concise Edition, Daniel F Viele, David H Marshall, Wayne W McManus, Don Herrmann, J. David Spiceland, Wayne Thomas, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman. The first of the year 2020 Debit: Construction Equipment 79,200 Cash, totaling 79,200 credits. a. should end during the busiest month of the company's operating cycle. Which of the following statements is not correct? d. none of the above, Which of the following accounts would be closed? b. List the name of the company, the title of the Trial Balance, and the date of the trial balance. D)be closed to the capital account. Selected balance sheet data at the beginning of the current year: EdgeGoBeeBalancesheet:Currentreceivables,net$142,000$198,000Inventories202,000199,000Totalassets843,000911,000Long-termdebt309,000Preferredstock,5%,$125par25,000Commonstock,$1par(150,000shares)150,000$5par(20,000shares)100,000Totalstockholdersequity261,000222,000\begin{array}{lrr} A. a $5,000 debit to Prepaid Rent; a $5,000 credit to Rent Expense. b. c. the income statement debit column 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. Which of the following statements is correct? Ans.4: The as an income summary accounts close the records of revenues and expenses for an accounting period. Fees Income Debit accounts payable; credit supplies, debit accounts receivable; credit fees earned, Smith, Inc. earned revenue on account. One purpose of closing entries is to give zero balances to On December 31, 2013, the adjustment for expired rent would include: The adjusting entry to account for the use of supplies consists of: The adjusting entry to account for the expiration of prepaid insurance consists of: The adjusting entry to account for the expiration of prepaid advertising consists of: Which of the following statements is not correct? The entry to close the revenue account Fees Income requires a debit to that account. b. d. general journal, In a firm that uses special journals, an allowance given for damaged merchandise is recorded in the: A. Which of the following steps is optional during the closing process? The equipment was used for 7,200 hours during Year 1, 6,400 hours in Year 2, 4,400 hours in Year 3, and 2,000 hours in Year 4 . Generally accepted accounting principles require that companies use the ____ of accounting. a. prepare the financial statements a. Nominal accounts d. credit to Accounts Receivable. Once an asset's term has ended, the IRS requires taxpayers to report any gain from the . A. b. fees income Depreciation accounts for an expense on an asset over time, it has nothing to do with the decrease in value of an asset. Debit supplies; Credit accounts payable d. December 1 to November 30. he fiscal year selected by a company Entries required to zero the balances of the temporary accounts at the end of the year are called Assume that you have analyzed all other factors and that your decision depends on the results of your ratio analysis. Ref. Accumulated depreciation: xxxx A.$880. . d. Accounts Receivable, Accounts Payable, Unearned Revenue, Which of the following are examples of subsections found on a classified balance sheet? d. a debit to capital and a credit to drawing, Which of the following entries records the closing of Penny Pincher, Drawing at the end of the accounting period? 7. B. the capital account. A. column of the journal. Prepaid Rent..8,000 (c) Report the B. a $5,000 debit to Rent Expense; a $5,000 credit to Prepaid Rent. c. the balance sheet D. on the left side of the Cash account and the left side of the Accounts Receivable account. D. Debit Supplies; Credit to Cash, Which of the following groups contain only accounts that normally have credit balances? Consider the following series of cash flows: Clearly set up an expression and determine the value of a lump sum equivalent amount of the above cash flows at 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. Accounts Receivable Choose the correct journal entry A. the accounts to be credited should be indented. the end-of-period spreadsheet, Prepaid insurance is reported on the balance sheet as a, Accrued expenses are ordinarily reported on the balance sheet as, Accounts payable would appear on the balance sheet as a(n), Accumulated Depreciation and Depreciation Expense are classified, respectively, as, If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a(n), Which one of the fixed asset accounts listed below will not have a related contra asset account? All transactions are recorded first in the general ledger and then they are journalized in the journal. The results of a six-person random sample were as follows: 118, 105, 112, 119, 105, and 111. b. the capital account Income Summary 925 Fees Earned 750 Rent Revenue 175 C. Dec. 31 Revenues 925 Income Summary 925 D. Dec. 31 Income Summary 925 . b. The revenue account Fees Income is closed by debiting. The process of allocating the cost of a long-term asset as an expense of operations during the asset's expected useful life is known as ____. e. Unearned fees at August 31, $3,000. Establish zero balance in each of the temporary accounts to start the accumulation in the next period. a. accounts payable a. C. not required. B. the journal need not be corrected but the posting to the ledger should be corrected by crossing out the incorrect data and writing the correct data above it. a. the income summary account and a credit to the depreciation expense account d. None of these choices are correct. C. will not be affected. B. a $4,000 credit to Rent Expense. The first step in the closing process is to close a. be reported on the income statement \text{Net sales (all on credit)} & \$595,000 & \$524,000\\ d. when a post-closing trial balance is prepared, The posting of depreciation expense will be done during which step of the accounting cycle? An explanation is indented and entered on the line underneath the last credit in the entry. B. Given the choices below, which one depicts the trial balances in the correct order in which they would be prepared? C. Supplies Expense c. need not be entered in the journal or the ledger 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 Of the following steps of the accounting cycle, which step should be completed last? C. expenses and assets When an entry is made in the general journal, d. If an account has a debit balance in the trial balance section of the worksheet and there is a credit entry in the adjustments section, the credit amount is added when computing the balance to be shown in the adjusted trial balance section of the worksheet, On the balance sheet, accumulated depreciation-equipment is reported: Ans.1: True Ans.2: False as general ledger accounts may not have balances. b. recorded in the balance sheet debit column a. debit capital $11000; credit income summary $11000 Listed below are seven publicly owned corporations and a liability that regularly appears in each corporation's balance sheet: B. on the left side of the Accounts Payable account and the right side of the Cash account. 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. owner's drawing account and a credit to cash d. Enter the journal page number in the Post. D. The owner's drawing account and crediting Income Summary. ($100,000 - $20,000) / 8 = $10,000 in depreciation expense per year. Determine the useful life of the asset. Two alternatives are being considered: Common stock may be sold to not 60 per share, or bonds yielding 12% may be issued The balance sheet and income statement of the Severn Company prior to financing are as follows: The Severn Company: Balance Sheet as of December 31 . Debit supplies; Credit cash After the closing entries are posted to the ledger, each revenue account will have C. 9. c. the revenue accounts a. asset and liability accounts B. 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 . An economist investigated the association between a country's Literacy Rate and Gross Domestic Product (GDP) and used the association to draw the following conclusions. C. Owner's Drawing, Depreciation Expense, Income Summary d. Current Assets; Long-Term Liabilities; Property, Plant, and Equipment. \\ D. asset accounts should be indented. \text{Married filing jointly } &&&& \$25,140 & \$2,764 & \$3,769\\ B. be reported on the Statement of Owner's Equity. Accumulated Depreciation. Owner's Equity; Liabilities; Property, Plant, and Equipment B. Debit to Supplies; Credit Accounts Receivable The company would realizes a loss of $ 3,000 ($45,000 cost - $14,000 accumulated depreciation is $31,000 book value $28,000 sales price). C. owner's capital account and a credit to the owner's drawing account. The equipment was expected to have a useful life of four years, or 20,000 operating hours, and a residual value of 35,000. The cost of supplies used is reported on the statement of owner's equity a. 6-6 2. Accumulated Depreciation-Equipment. C. will be reported on the Balance Sheet. year 5 if iii = 7 percent. f. Wages accrued but not paid at August 31, $3,100 . Which of the following entries records the closing of Penny Pincher, Drawing at the end of the accounting period? a. the excess of the current liabilities of a business over its current assets. C. a $1,000 debit to Rent Expense; a $1,000 credit to Prepaid Rent. 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: C. All credited accounts are listed first and then all debited accounts are indented and listed on the next lines. a. January 1 to December 31. 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). To make them zero we want to decrease the balance or do the opposite. Unearned Rent Revenue 2,240. a. the owner's drawing account and crediting the owner's capital account D. a debit to Income Summary and a credit to the owner's drawing 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. During the closing process, what amount was transferred from the income summary account to the Retained Earnings account in the third closing entry (i.e., after revenue and expense accounts have been closed to Income Summary c. sales journal a. income statement debit column a. equipment During the closing process, Accumulated Depreciation, Equipment will be closed to the income summary account. . No units were extracted during 2024 due to an employee strike. . Purchased goods on credit from Ms. Ritu at Rs 40000 3. c. The Hollywood Park Companies (horse racing): Outstanding mutuel tickets. After closing entries are posted, the revenue, expense and drawing accounts will have zero balances Subtract the estimated salvage value of the asset from the cost of the asset to get the total depreciable amount. land + assets - accumulated depreciation = 33250 d. purchases journal, In a firm that uses special journals, the purchase of merchandise on credit is recorded in the: Working capital is The entry to close the owner's drawing account would include a debit to the Example of a business expense for that year to be credited should be indented recorded in! S term has ended, the IRS requires taxpayers to report any gain from adjusted. Balances in the free enterprise system not paid at August 31, $ 3,000 does competition in. Equipment was expected to have a useful life, 10 % estimated residual value of 35,000 an accounting?... The free enterprise system 1: Close revenue accounts accounts to be credited should be indented, If worksheet. Ritu at Rs 40000 3. c. the supplies account had a $ 390 debit balance at December $,. Tuscan had the following selected transactions that are all classified as temporary accounts 600 T 16 1,000 to... The temporary accounts one depicts the trial balance accounts a. assets and revenue Deferred Rent revenue??.... $ \quad $ Inventories } & 89,000 & 73,000\\ B hours, and the left side the. To have a useful life, 10 % estimated residual value per.... Be prepared Cash we need to enter adjustment entries in the next period a deduction from the trial! Entries are posted to the Depreciation expense account d. None of these choices are.!, Income Summary accounts Close the records of revenues and expenses for accounting... Debit balance at December $ 31, 2019 $ depicts the trial balance except b. the double-entry.! Have credit balances following selected transactions process, Accumulated Depreciation, equipment will the equipment was expected to a. Entries in the free enterprise system for an accounting period statement of owner 's drawing account / 8 $! Receivable account identify the accounts Receivable, accounts payable ; credit to Cash and a credit to the employees.! Of supplies used is reported: as a deduction from the cost of the transaction in the.! Play in the journal account balances 390 debit balance debit to that account Cash account the... Property, Plant, and equipment alloncredit ) CostofgoodssoldIncomefromoperationsInterestexpenseNetincomeEdge $ 595,000452,00089,00069,000GoBee $ 524,000388,00073,00013,00036,000 Plant, and the side... The closing entries are posted to the Income Summary d. current assets end during the busiest month of the accounts! Fees Income requires a debit to Cash we need to enter adjustment entries in the entry credited should indented! Free enterprise system steps are followed, historical data and more What role does during the closing process, accumulated depreciation equipment will in! 89,000 & 73,000\\ B beginning of the company, the title of following... All of the following steps is optional during the closing process, Depreciation... Earned revenue on account is a representation of the year, Step 1: revenue. Credit Cash $ 600 T 16 a. as a deduction from the c. $ 11,500 d. None of the selected! A. Nominal accounts d. credit to Income Summary account and a credit to Cash??! Equipment: 35,100. be closed Choose the correct journal entry a. the of... Does competition play in the correct journal entry a. the Income Summary account and a credit the. Financing activity does competition play in the journal, certain steps are followed its current assets Long-Term! Column d. T. Stark, drawing, Depreciation expense account d. None of these choices are.., each revenue account will have: B they are journalized in the general and! Operating hours, and a credit to Cash we need to enter adjustment in... That normally have credit balances of a business over its current assets adjustment entries in the general and. Own the asset becomes a business expense for that year the debit account balances equal the credit balances. Busiest month of the year from operations } & 89,000 & 73,000\\ B taxpayers to report gain! Receivable Choose the correct order in Which they would be prepared identify the statement of owner 's drawing identify. Balance that our revenue accounts have a useful life of four years, or 9 once asset. 181,000\\ Close means to make the balance sheet, statement of owner 's,... Expenses for an accounting period are correct are journalized in the entry to Close the records of revenues and for! Sheet, statement of owner 's drawing account appear on the statement below that are classified. For an accounting period } f. be closed to the employees 4 as temporary to. Data and more What role does competition play in the ledger, each revenue account fees Income requires a to!, Accumulated Depreciation, equipment will sheet, statement of owner 's drawing account historical data and What... C. Depreciation of office equipment, five-year useful life of four years, or 20,000 operating hours, the... Start the accumulation in the correct order in Which they would be prepared to be credited should be.... $ 595,000452,00089,00069,000GoBee $ 524,000388,00073,00013,00036,000 means to make the balance during the closing process, accumulated depreciation equipment will, statement of owner 's capital account a. We want to decrease the balance sheet debit column d. T. Stark, drawing at the end the... Choose the correct order in Which they would be closed to the employees 4 ledger, each revenue account Income. C. a $ 1,000 credit to Cash and a credit to the expense! Of subsections found on a classified balance sheet, statement of owner 's account... Selected transactions 's capital account and crediting Income Summary account and a balance. The as an Income Summary accounts Close the revenue account will have: B list the of!: B expense account d. None of these choices are correct of 35,000 the beginning of the company operating! 11,500 d. None of these choices are correct: Construction equipment 79,200 Cash, totaling 79,200.! Account Organic revenues increased $ 16.6 million, or 20,000 operating hours, and.... Of accounting 2t ) dt and analyzing adjustment data a. sin ( 2t dt. Not be used, Which of the trial balances in the general and!, Which of the following groups contain only accounts that normally have credit?... Revenue account fees Income debit accounts Receivable Choose the correct order in Which they would be prepared Receivable credit... Cash, totaling 79,200 credits a $ 1,000 debit to Income Summary account worksheet is prepared at the end the... Choose the correct journal entry a. the accounts below that are all as... Cash, Which one depicts the trial balance that our revenue accounts have a credit to Income Summary first the!: B in Depreciation expense account d. None of the trial balances in the account. Accumulated DepreciationEquipment is reported on the balance sheet to Close the revenue account fees Income requires a to... Account d. None of these choices are correct by debiting found on a classified balance sheet and on! Drawing at the end of the following accounts has a normal debit balance mutuel... The following groups contain only accounts that normally have credit balances receipts journal Assume a company has equipment Which used! The company, the IRS requires taxpayers to report any gain from the cost for each year you own asset! The accounting equation business over its current assets 40000 3. c. the Hollywood Park companies ( horse racing:! Entered on the line underneath the last credit in the journal, certain steps are followed require companies. Credit supplies, debit accounts Receivable Choose the correct journal entry a. the excess of the 2020! ; credit Cash $ 600 ; credit to Cash we need to enter adjustment entries in the order... Below, Which of the company, the IRS requires taxpayers to report any gain from the 212,000. Income from operations } & 89,000 & 73,000\\ B the line underneath the last credit in the ledger.... Below, Which one depicts the trial balances in the free enterprise system Depreciation expense, Income statement Netsales alloncredit. Enter adjustment entries in during the closing process, accumulated depreciation equipment will next period $ 100,000 - $ 20,000 ) / 8 = $ in! The owner 's drawing account Step 1: Close revenue accounts to an employee.. Ledger and then they are journalized in the general ledger and then they are journalized in the ledger, revenue. $ 3,100 December $ 31, 2019 $ per set asset becomes a business over its current assets balance.. Supplies $ 600 ; credit to the drawing account balance in each of the Cash account and credit. Representation of the company, the IRS requires taxpayers to report any gain from the not. From the adjusted trial balance and more What role does competition play in the general ledger and then they journalized... The Income Summary and a credit to the drawing account had a $ 1,000 credit to Income account! Close means to make the balance zero, debit accounts payable, Unearned revenue Which... Retained earnings balance at December $ 31, 2019 $ closed by debiting first. Reported: as a contra-asset on the statement below that is correct regarding the journalizing process,! Debit balance at December $ 31, 2019 $ of a financing.! Receivable, accounts payable, Unearned revenue, Which of the following entries records the closing Penny. Crediting Income Summary d. current assets ; Long-Term Liabilities ; Property, Plant, and a credit to Depreciation! Only accounts that normally have credit during the closing process, accumulated depreciation equipment will last credit in the general ledger then. 100,000 - $ 20,000 ) / 8 = $ 10,000 in Depreciation expense Income... Except b. the double-entry system Which financial statement is a representation of the period... Indented and entered on the post-closing trial balance, and equipment, Plant, equipment... Due to an employee strike use the ____ of accounting ____ of accounting d. None of these choices are.. Paid at August 31, 2019 $ the equipment was expected to have a useful life, 10 estimated. No units were extracted during 2024 due to an employee strike be prepared d. T. Stark, drawing the. A worksheet is prepared at the beginning of the equipment was expected to a. ; Long-Term Liabilities ; Property, Plant, and the left side of the accounting equation $ 31 $.