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accounting ch5
chapter 5
| Question | Answer |
|---|---|
| purposes of closing entries | 1) to return balances of temporary owners' equity accounts to zero so that these accounts may be used to measure the activities of the next reporting period. 2) to update the balance of the retained earnings account |
| 4 closing entries | 1) close the revenue accounts to the Income Summary account. 2) close the expense accounts to the Income Summary accounts. 3) close the Income summary to retained earnings accounts. 4) close dividents to retained earnings accounts |
| adequate disclosure | the GAAP of providing with financial statements any information that users need to interpret those statements properly |
| after closing trail balance | trial balance prepared after all closing entries have been made |
| closing entries | journal entries made at the end of the period for the purpose of closing temporary accounts and transferring balances to the retained earnings account |
| current assets | cash and other assets that can be converted into cash or used up within a relatively short period of time without interfering with normal business operations |
| current liabilites | existing obligations that are expected to be satisfied with a company's current assets within a relatively short period of time |
| income summary | summary account in the ledger to which revenue and expenses are closed at the end of the period. |
| interim financial statements | financial statements prepared for periods of less than one year |
| notes | supplemental disclosures that accompany financial statements |
Created by:
gpolite
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