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Adjustments and Closing Entries for a Corporation JEOPARDY Adjustments & Closing for a Corporation Financial Statements - 100 The income statement of a merchandising business has three main sections… what is . . . Revenue, Cost of Merchandise Sold and Expenses Financial Statements - 200
The income statement of a merchandising business has three main sections…
what is . . .Revenue, Cost of Merchandise Sold and Expenses
A financial statement that shows changes in a corporation’s ownership for a fiscal period
what is . . .A statement of Owner’s Equity
The two sections in a statement of stockholders’ equity
what are . . .Capital Stock & Retained Earnings
Calculation for the book value of Accounts receivable
What is . . .Accounts receivable less Allowance for Uncollectible Accounts
Two classifications of Assets for our Merchandising Balance sheet
what are . . .Current Assets and Plant Assets
A value assigned to a share of stock and printed on the stock certificate is called
what is . . .Par Value
The purpose of adjusting entries
what is . . .Bring the general ledger account balances up to date.
Which accounting concept relates to the adjusting entry procedure
what is . . . Matching revenue with expenses
Company ABC estimated that 2,000 will be uncollectible; the adjusting entry…
what is . . .DR Uncollectible Accts. Expense, CR Allowance for Uncoll. Accts
Adjusting Entry for Merchandise Inventory when the count at year end is lower…
what is . . .Dr. Income Summary. Cr. Merchandise Inventory
Adjusting entry for depreciation store Equip…
what is . . .Dr Depreciation Expense, Cr Accum. Depre – Store Equip
what is . . . Dr Supplies Expense and Cr Supplies Office $2,730
This account is used only at the end of the fiscal period to help prepare accounts for a new fiscal period.
what is . . . Income Summary Account
Assets, Liability and Owner’s Capital Accounts
what is . . .Permanent or Real Accounts
The first step to the closing process
what is . . . Close income statement accounts with credit balances (Sales, Purchase Discounts, Purchases R & A)
The third step in the closing process
what is . . .Closing entry to record net income (or loss); zero out income summary
The fourth step in the closing process
what is . . .Closing entry for dividends. (Dr retained earnings, Cr dividends)
Four steps to close the temporary accounts
what are . . . Close Income statement account Cr balances; Close Income statement account Dr balances; Close Income Summary (record profit or loss); Close Dividends
These accounts have up to date balances to begin the new fiscal period.
what are . . .Balance sheet accounts (A, L, OE)
These accounts have zero balances to begin the new fiscal period.
what are . . .Temporary accounts (Revenue, Cost and Expense Accounts)
This is prepared to prove the equality of debits and credits in the general ledger and to prepare the GL for the next fiscal period.
what is . . .Post Closing Trial Balance
The supporting reports prepared for the balance sheet.
what are . . .Schedule of Accounts Receivable and Accounts Payable
The normal balance of Capital Stock
what is . . . Credit
The normal balance of Merchandise Inventory
what is . . . Debit
A comparison between two items of financial information
what is . . .A financial ratio
The amount of net income after federal income tax belonging to a single share of stock
what is . . .Earnings Per Share
The relationship between the market value per share and earnings per share
what is . . .Price-earnings ratio
The two contra accounts for Sales
what are . . . Sales discounts and Sales Return and allowance.
The normal balance for an Income Summary Account
what is . . .Zero
Companies with a high price-earnings ratio
what are . . .Growth Companies
The financial statements should provide information about a business’s financial condition, changes in this financial condition and the progress of operations
what is . . .Adequate Disclosure
Financial information must be reported the same way from one fiscal period to the next
what is . . .Consistent Reporting
A source document is prepared for each transaction.
what is . . .Objective Evidence
The amount an owner expects to receive when a plant asset is removed from use
what is . . .Estimated salvage value
The total amount of depreciation expense that has been recorded since the purchase of a plant asset
what is . . . Accumulated depreciation
The special journal used to record sales on account.
what is . . .Sales Journal