2 pt 3 pt 4 pt 5pt 1 pt 2 pt 3 pt 4 pt 5 pt 1 pt 2pt 3 pt 4pt 5 pt 1pt 2pt 3 pt 4 pt 5 pt 1 pt 2 pt 3 pt 4pt 5 pt 1pt The Worksheet Closing the Accounts Classifying Assets and Liabilities RatiosVocab

A document to summarize data for the financial statements

A Worksheet

True or False The worksheet helps accountants close the accounts

True The worksheet DOES help the accountant close the accounts

Which of the following does NOT appear on the worksheet? a.The trial balance b.The adjusted trial balance c.Closing entries d.Adjusting entries

Which of the following does NOT appear on the worksheet Closing Entries

Which of the following accounts would appear in the Balance Sheet credit column? a.Unearned service revenue b.Prepaid insurance c.Service revenue earned d.Depreciation expense

Which of the following accounts would appear in the Balance Sheet credit column? Unearned service revenue

Which of the following would appear in the Income Statement Credit column? a.Unearned service revenue b.Prepaid insurance c.Service revenue earned d.Depreciation expense

Which of the following would appear in the Income Statement Credit column? Service revenue earned

True or False? As part of the closing process, revenues and expenses are closed to a temporary account titled “Net Income (Loss)”

False As part of the closing process, revenues and expenses are closed to a temporary account titled “Income Summary”

The Income Summary account has a balance equal to what immediately before it is closed?

Net Income (Loss)

What would be the entry to close the appropriate supplies account at the end of the year?

Debit Income Summary Credit Supplies Expense

What are the three accounts that must be closed at the end of the year?

Revenues Expenses Owner’s Withdrawals

What types of accounts appear on the postclosing trial balance?

Assets Liabilities Capital

What category would Land appear? Current asset Long-term asset Current liability Long-term liability

What category would Land appear? Long-term asset

What category would Accounts payable appear? Current asset Long-term asset Current liability Long-term liability

What category would Accounts payable appear? Current liability

What category would Accounts Receivable appear? Current asset Long-term asset Current liability Long-term liability

What category would Accounts Receivable appear? Current asset

What is the time-frame that makes an asset or liability current?

1 year

What is the name of the form in which the assets and liabilities are broken down in to Current vs. Long- term?

Classified Balance Sheet

Which ratio measures overall ability to pay debts?

Debt ratio

What is the formula for current ratio?

Total current assets Total current liabilities

What does the current ration measure?

The ability to pay current liabilities with current assets

What is a strong current ratio?

Above 1.5 – it means they have $1.50 is current assets for every $1.00 in current liabilities.

What is a safe debt ratio for most businesses?

Below.6 or 60% (Side note: above.8 or 80% borders on high risk)

A measure of how quickly an item can be converted to cash

Liquidity

What account is the most liquid?

Cash

Process by which companies produce their financial statements for a specific period

Accounting cycle

Time span during which cash is paid for goods and services, which are then sold to customers from whom the business collects cash

Operating Cycle

Accounts that are NOT closed at the end of the period – assets, liability, and capital accounts. (They are called what?)

Permanent accounts