Category: Uncategorized

The steps in the closing process are (1) close credit balances in revenue accounts to Income Summary; (2) close debit balances in expense accounts to Income Summary; (3) close Income Summary to Retained Earnings; (4) close Dividends to Retained Earnings.

On September 12, Wander Enterprises sold merchandise in the amount of $5,800 to Jetson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Wander uses the periodic inventory system and the gross method of accounting for sales. Jetson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Wander makes on September 18 is:

The recurring steps performed each reporting period in preparing financial statements, starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance, is referred to as the:

A classified balance sheet differs from an unclassified balance sheet in that:

Buster’s Meat Market bought $4,000 worth of merchandise from Chainey Brothers Suppliers and signed a 90-day, 6% promissory note for the $4,000. Chainey Brothers Supplier’s journal entry to record the sales transaction is:

Accounting standards:

Investing activities include receiving cash dividends from investments in other companies’ stocks.

Fernando Company’s Merchandise Inventory account at year-end has a balance of $62,115, but a physical count reveals that only $61,900 of inventory exists. The adjusting entry to record this $215 of inventory shrinkage is:

An example of an operating activity is:

An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.