Multiple Choice
Real/permanent accounts are those that carry over from one period to the next, with a continuing balance in the account. Examples are asset accounts, liability accounts, and equity accounts. In contrast, revenue accounts, expense accounts, and dividend accounts are not real/permanent accounts.
Closing entries are used to transfer the contents of the temporary accounts into the permanent account, Retained Earnings, which resets the temporary balances to zero, enabling tracking of revenues, expenses, and dividends in the next period.
Expense accounts and dividend accounts are credited during closing. This is because closing requires that the account balances be cleared, to prepare for the next accounting period.
Income Summary is a super-temporary account that is only used for closing. The revenue accounts are closed by a debit to each account and a corresponding credit to Income Summary. Then the expense accounts are closed by a credit to each account and a corresponding debit to Income Summary. Finally, the balance in Income Summary is cleared by an entry that transfers its balance to Retained Earnings. Thus, it is used in three journal entries, as part of the closing process, and has no other purpose in the accounting records.
The fact that Income Summary has a credit balance (of any size) after the first two closing entries are made indicates that the company made a net profit for the period. In this case, a credit of $125,500 reflects the fact that the company earned net income of $125,500 for the period.
The post-closing trial balance will include only the permanent/real accounts, which are assets, liabilities, and equity. All of the other accounts (temporary/nominal accounts: revenue, expense, dividend) would have been cleared to zero by the closing entries.
Working capital is calculated by subtracting current liabilities from current assets. The result indicates how well the company can pay bills as they come due, which is sometimes referred to as the company’s liquidity position.
(1) First is the Unadjusted Trial Balance, which summarizes the account balances of all accounts in the ledger, before period-end adjustments . (2) Next, the Adjusted Trial Balance summarizes the account balances of all accounts in the ledger, after adjusting entries have been posted. (3) Finally, the Post-Closing Trial Balance summarizes the account balances of all accounts in the ledger, after closing entries have been posted.
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- Authors: Mitchell Franklin, Patty Graybeal, Dixon Cooper
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- Book title: Principles of Accounting, Volume 1: Financial Accounting
- Publication date: Apr 11, 2019
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- Section URL: https://openstax.org/books/principles-financial-accounting/pages/chapter-5
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X-Mart purchased $300 of merchandise on account. Demonstrate the journal entry to record this transaction, assuming the perpetual inventory system is used. Debit Merchandise Inventory $300; credit Accounts Payable $300. Determine which of the following statements about merchandise is correct.
How much is net sales? $8,500. Net income is $15,000, operating expenses are $20,000, and net sales total $75,000. How much is cost of goods sold? $40,000. which of the following would appear on both single-step and multi-step income statement? gross profit. other expenses and losses. cost of goods sold.
Financial Accounting Chapter 5 Learn with flashcards, games, and more — for free. ... Homework short answer questions ACG 3173 exam 1. 7 terms. Ains0415. Preview. ACCT 206 Video Lecture & Assessment LO 8-5, 6, 8, 10, 11. Teacher 33 terms. marxs15. Preview. health care . 11 terms. Michaela2858.
Step-by-step solution. Step 1 of 5. Cost of goods purchased. The expenses incurred to acquire the goods is termed as cost of goods purchased. The cost of goods purchased is computed by adding the transportation-in costs with the initial purchase cost and, then deducting the purchase discount and the purchase returns and allowances. Current ratio.
Access Financial Accounting, 10e WileyPLUS (next Generation) + Loose-Leaf 10th Edition Chapter 5 solutions now. Our solutions are written by Chegg experts so you can be assured of the highest quality!
CH5. Problem. 1CC. Step-by-step solution. Step 1 of 8. 1. Journal entry refers to the recording of financial transactions in the journal of a company. It is a formal entry used to recognize the business transaction with date and amount. They are the first step in the accounting cycle and are used to report the business transactions and events ...
Why It Matters; 1.1 Explain the Importance of Accounting and Distinguish between Financial and Managerial Accounting; 1.2 Identify Users of Accounting Information and How They Apply Information; 1.3 Describe Typical Accounting Activities and the Role Accountants Play in Identifying, Recording, and Reporting Financial Activities; 1.4 Explain Why Accounting Is Important to Business Stakeholders
We will discuss how we solve the homework problem using the various inventory calculations.
Glencoe Accounting Chapter 5: Transactions that Affect Revenue, Expenses, and Withdrawals Homework Practice. Analyzing Transactions. Instructions. For each transaction, write a sentence describing the transaction. Cash in Bank. Acc. Rec. Supplies. Accounts Payable. Owner's Capital.
The physical count is used to determine if there has been any theft, loss, damage or errors in inventory. Determine which of the following statements are correct regarding the difference between physical flow and the cost flow of inventory. Cost flow is an assumption about which goods/items are sold.
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A video summary of chapter 5 in Perdisco's Financial Accounting 360Textbook. To find out more, visit www.perdisco.com/finacc
Chapter 5 Accounting homework. Notes. Course. Accounting 1 (FMGT 1100) 114 Documents. Students shared 114 documents in this course. University British Columbia Institute of Technology. Academic year: 2017/2018. Uploaded by: Anonymous Student. This document has been uploaded by a student, just like you, who decided to remain anonymous.
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Chapter 5 Homework. Chapter 5 homework. Course. Introduction To Computerized Accounting (ACNT 1311) 30 Documents. Students shared 30 documents in this course. University South Plains College. Academic year: 2018/2019. Uploaded by: MAANISAAD SHAHRIAR. ... Chapter 5 Assignment Answers to 1a.
Cost Accounting Chapter 5 Homework Solutions - Free download as PDF File (.pdf), Text File (.txt) or read online for free.
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View Homework Help - Accounting Chapter 5 Homework from AC 201 at Park University. Exercise 5-1 Your answer is correct. This information relates to Crisp Co. (Credit account titles are automatically
Financial Accounting - McGraw Hill; Ch. 5. Accounts Receivable. Click the card to flip 👆. The amount of cash owed to the company by its customers from the sale of products or services on account. Click the card to flip 👆. 1 / 20.
Step-by-step solution. Step 1 of 6. Cost of goods sold. Step 2 of 6. Cost of goods sold refers to the costs incurred by the business for the merchandise that the business has sold. It is determined by adding purchases to the beginning inventory and subtracting ending inventory from the total. Step 3 of 6.
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Here's the best way to solve it. ACC 101 Online Chapter 5 Homework Questioni Question 2 Questions Question El Questions Question 7 Below is a series of cost of goods sold sections for companies B, H, O, and S. Fill in the lettered banks to complete the cost of goods sold sections Beginning inventory $325 Question Purchases 1,950 Purchase ...