The purpose of the post-closing trial balance is to * prove that no mistakes were made. prove the equality of the balance sheet O account balances that are carried forward into the next accounting period. prove the equality of the income statement account balances that are carried forward into the next accounting period. list all the balance sheet accounts in alphabetical order for easy reference.

The purpose of the post-closing trial balance is to * prove that no mistakes were made. prove the equality of the balance sheet O account balances that are carried forward into the next accounting period. prove the equality of the income statement account balances that are carried forward into the next accounting period. list all the balance sheet accounts in alphabetical order for easy reference.

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter4: Completing The Accounting Cycle

Section: Chapter Questions

Problem 19E: An accountant prepared the following post-closing trial balance: Prepare a corrected post-closing...

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Which of the following statements is false? Adjusting entries are necessary because timing differences exist between when a revenue or expense is recognized and cash is received or paid. Adjusting entries always affect at least one revenue or expense account and one asset or liability account. The cash account will always be affected by adjusting journal entries. Adjusting entries can be classified as either accruals or deferrals.
Read each definition below and write the number of the definition in the blank beside the appropriate term. The quiz solutions appear at the end of the chapter. Recognition Historical cost Current value Cash basis Accrual basis Revenues Revenue recognition principle Matching principle Expenses Adjusting entries Straight-line method Contra account Deferral Deferred expense Deferred revenue Accrual Accrued liability Accrued asset Accounting cycle Work sheet Real accounts Nominal accounts Closing entries Interim statements A device used at the end of the period to gather the information needed to prepare financial statements without actually recording and posting adjusting entries. Inflows of assets or settlements of liabilities from delivering or producing goods, rendering services, or conducting other activities. Journal entries made at the end of a period by a company using the accrual basis of accounting. Journal entries made at the end of the period to return the balance in all nominal accounts to zero and transfer the net income or loss and the dividends to Retained Earnings. A liability resulting from the receipt of cash before the recognition of revenue. The name given to balance sheet accounts because they are permanent and are not closed at the end of the period. An asset resulting from the recognition of a revenue before the receipt of cash. The amount of cash or its equivalent that could be received by selling an asset currently. The assignment of an equal amount of depreciation to each period. Cash has been paid or received but expense or revenue has not yet been recognized. A system of accounting in which revenues are recognized when a performance obligation is satisfied and expenses are recognized when incurred. Cash has not yet been paid or received but expense has been incurred or revenue recognized. Financial statements prepared monthly, quarterly, or at other intervals less than a year in duration. Revenues are recognized in the income statement when a performance obligation is satisfied. The process of recording an item in the financial statements as an asset, a liability, a revenue, an expense, or the like. An asset resulting from the payment of cash before the incurrence of expense. The name given to revenue, expense, and dividend accounts because they are temporary and are closed at the end of the period. A system of accounting in which revenues are recognized when cash is received and expenses are recognized when cash is paid. A liability resulting from the recognition of an expense before the payment of cash. The association of revenue of a period with all of the costs necessary to generate that revenue. An account with a balance that is opposite that of a related account. The amount paid for an asset and used as a basis for recognizing it on the balance sheet and carrying it on later balance sheets. Outflows of assets or incurrences of liabilities resulting from delivering goods, rendering services, or carrying out other activities. A series of steps performed each period and culminating with the preparation of a set of financial statements.
If a journal entry includes a debit or credit to the Retained Earnings account, it is most likely which of the following? A. a closing entry B. an adjusting entry C. an ordinary transaction entry D. outside of the accounting cycle
Which of the following accounts balance would be a different number on the Balance Sheet than it is on the adjusted trial balance? A. accumulated depreciation B. unearned service revenue C. retained earnings D. dividends
An accountant prepared the following post-closing trial balance: Prepare a corrected post-closing trial balance. Assume that all accounts have normal balances and that the amounts shown are correct.
Why are both the debit and credit amounts in the Adjustments columns on the Income Summary line of the spreadsheet extended to the Adjusted Trial Balance columns?
What is the major difference between the unadjusted trial balance and the adjusted trial balance? The adjusted trial balance includes the postings of the adjustments for the period in the balance of the accounts. Unlike the adjusted trial balance, the unadjusted trial balance will continue with the end-of-period processing even if it is not in balance. The adjusted trial balance will be used to record the adjustments for the period. The adjusted trial balance will show the net income (loss) as an additional account.
Which of the following statements is incorrect concerning the adjusted trial balance? A. THE ADJUSTED TRIAL BALANCE IS PREPARED AFTER THE ADJUSTING ENTRIES HAVE BEEN JOURNALIZED AND POST B.THE ADJUSTED TRIAL BALANCE LIST THE ACCOUNT BALANCES SEGREGATED BY ASSETS AN LIABILITIES. C. AN ADJUSTED TRIAL BALANCE PROVES THE EQUALITY OF TGE TOTAL DEBIT BALANCES ANS THE TOTAL CREDIT BALANCE IN THE LEDGER AFTER ALL ADJUSTMENT ARE MADE. D. THE ADJUSTED TRIAL BALANCE PROVIDES THE PRIMARY BASIS FOR THE PREPARATIONOF FINANCIAL STATMENTS
Which of the following comes first in worksheet preparation? A. Compute profit or loss as the difference between total revenues and total expenses on the income statement. B. Enter the account balances in the unadjusted trial balance columns and total the amounts. C. Compute each account’s adjusted balance by combining the trial balance and adjustment figures. D. Enter the adjusting entries in the adjustment columns and total the amounts.
Reversing entries are made at the beginning of the new accounting period in order totransfer all accruals and deferral items established by adjusting entries to nominal accountthat are to be used in recording transactions during the new period. True False
It is obvious that an error occurred in the preparation and/or posting of closing entries if Group of answer choices A. all revenue and expense accounts have zero balances. B. all balance sheet accounts have zero balances. C. the retained earnings account is debited for the amount of the net loss of the period. D. the income summary account is debited for the amount of the net income for the period.
A post-closing trial balance is prepared to test the equality of the general ledger after all adjusting and closing entries have been posted. True or False?