during the closing process, accumulated depreciation equipment will

June 15, 2022. Accumulated depreciation is the total depreciation for a fixed asset that has been charged to expense since that asset was acquired and made available for use. e. P35,000 worth of office supplies were used. 95. For example, if a company purchased a piece of printing equipment for $100,000 and the accumulated depreciation is $35,000, then the net book value of the printing equipment is $65,000. B. assets, liabilities, and owner's equity Debit Credit Cash $2,260 Accumulated Depreciation-Equipment $1,860 Accounts Receivable 4,110 Accounts Payable 2,460 Supplies 1,660 Unearned Revenue 1,060 Equipment 11,860 Salaries Payable 560 J. Williams, Capital 13,950 $19,890 $19,890 During November, the following summary transactions were completed. a. a. the drawing account 3 c. $11,500 b. a. executive agreement e. sanction The process of transferring data from the journal to the ledger accounts is called, according to the steps of the accounting cycle in what order should the trial balance be prepare, The ____________ is where a transaction can first be found in the accounting records, The process of transferring debits and credits from the journal entries to the account ledger is called, In which of the following types of accounts are decreases recorded by credits: B. a $4,000 credit to Rent Expense. c. a postclosing trial balance will not contain revenue and expense account balances During the closing process, what amount was transferred from the income summary account to the Retained Earnings account in the third closing entry (i.e., after revenue and expense accounts have been closed to Income Summary a. income statement The process of allocating the cost of a long-term asset as an expense of operations during the asset's expected useful life is known as ____. Accumulated Depreciation: $9,800. D. Trial balance, post-closing trial balance, adjusted trial balance. Count on a typical population. c. a debit to cash and a credit to income summary The entry to close the owner's drawing account would include a debit to the d. 5, After the closing entries are posted to the ledger, each revenue account will have: not be closed. To account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called, The unexpired insurance at the end of the fiscal period represents, An end-of-period spreadsheet includes columns for, is used to summarize account balances and adjustments for the financial statements, How will the following adjusting journal entry affect the accounting equation? A. completing one T account. c. to update the capital account. c. supplies expense The Statement of Owner's Equity is calculated as follows: At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts: Accounts Receivable, $1,200; Prepaid Insurance, $500; Equipment, $36,200 and Cash, $40,650. c. depreciation expense-equipment Randomly listed below are the steps to preparing a Trial Balance: c. owner's drawing c. Income from services A. Debit cash; credit fees earned a. a. liabilities and owner's equity - 33250= 11500. be closed to the drawing account. b. d. T. Stark, Capital, Which of the following has a normal credit balance? d. worksheet, After the worksheet has been completed, the next step in the accounting cycle is to: \text{Income from operations} & 89,000 & 73,000\\ & \textbf{Edge} & \textbf{GoBee}\\ . d. close all accounts to that the ledger is ready for the next accounting period, The entry to transfer a net loss to the owner's capital account would include a debit to: c. rent expense d. the owner's drawing account is closed to the income summary statement, The entry to close the depreciation expense account would include a debit to: The error was discovered after the data posted. The formula is shown below: The acquisition cost refers to the overall cost of purchasing an asset, which includes the purchase price, the shipping cost, sales taxes, installation fees, testing fees, and other . FINANCING ALTERNATIVES The Severn Company plans to raise a net amount of 270 million to finance new equipment in early 2019. when a corporation adopts a fiscal year that ends when business activities have reached the lowest point in its annual operating cycle, the ability of a business to pay its debts, The excess of the current assets of a business over its current liabilities. ($100,000 - $20,000) / 8 = $10,000 in depreciation expense per year. In which of the following steps of the accounting cycle will the owner capital account be used? A. posting entries. Has a zero balance after the closing process and remains with a zero balance until after the closing procedure for the next period. c. sales journal A debit to Income Summary and a credit to Fees Income. Depreciation of property, machinery and equipment is recognized as part of cost and operating expenses (notes 5 and 6) and is calculated using the straight-line method over the estimated useful lives of the assets, except for mineral reserves, which are depleted using the units-of-production method. D. asset accounts should be indented. C. a debit to Fees Income and a credit to Accounts Receivable. b. cash receipts journal C. Placing the balance in Prepaid Rent in the Credit column d. purchases journal, In a firm that uses special journals, the acceptance of a return of merchandise from a credit customer is recorded in the: to report amounts for only 1 period temporary accounts should have ____ balance at the beginning of next period, Revenue and expense account balances are transferred to the owners capital account, the balance of the owner's drawing account is transferred to the owner's capital account, the accounting process that begins with analyzing and journalizing transactions and ends with the post-closing trial balance, transaction are analyzed and recorded in the journal, adjustment data are assembled and analyzed, an optional end of period spreadsheet is prepared, adjusting entries are journalized and posted to ledger, Financial statements are prepared (income, owner's equity, balance sheet, statement of cash flow). Identify the statement below that is CORRECT regarding the journalizing process. e. Unearned fees at August 31, $3,000. H0:=100H1:100\begin{aligned} D. T. Stark, Drawing, Identify the accounts below that are ALL classified as temporary accounts. On a worksheet, the adjusting entry to account for depreciation of equipment consists of: If the prepaid expenses are not adjusted assets on the balance sheet: If long term assets are not adjusted, expenses on the income statement. Over time, the accumulated depreciation balance will continue to increase . b. fees income The equipment has a residual value of $20,000 and has an expected useful life of 8 years. Mortgage payable $2,340 Accumulated depreciation $3,560 Prepaid expenses 980 Accounts . A. Which of the following accounts will not be closed at the end of the accounting cycle? D. will always affect cash. B. . a. a debit to income summary and a credit to fees income Accounts Payable 4,690. d. fees income, All of the following accounts will appear on the postclosing trial balance except: b. a debit balance B. d. correcting entries, If a business has a net loss for a fiscal period, the journal entry to close the income summary account is: TaxableAmountofAmountofFilingStatusIncomeTaxWithheldTaxDueMarriedfilingjointly$25,140$2,764$3,769\begin{aligned} What is the first account that should be listed in the post-closing trial balance? a. debit Penny Pincher, drawing; credit Penny Pincher, capital D. The owner's drawing account and crediting Income Summary. Debit supplies expense $600; credit supplies $600 \text{Current receivables, net} & \$142,000 & \$198,000\\ The results of a six-person random sample were as follows: 118, 105, 112, 119, 105, and 111. C. a $24,000 debit to Rent Expense. d. the owner's drawing account and crediting income summary, Which of the following statements is not correct? After closing entries are posted, the revenue, expense and drawing accounts will have zero balances revenues, expenses, and drawing Accounts Receivable b) The slope of the line shows that growth of 5%5 \%5% in Literacy Rate will produce a $1\$ 1$1 billion improvement in GDP. c. post-closing trial balance C. Debit Supplies; Credit Accounts Payable Explain your conclusion. b. cash receipts journal a. if the postclosing trial balance does not balane, there are errors in the accounting records The entry to close the revenue account Fees Income requires a debit to that account. Assume that you have analyzed all other factors and that your decision depends on the results of your ratio analysis. b. fees income and crediting income summary \text{$\quad$Current receivables, net} & 186,000 & 167,000\\ c. the income summary account is used only at the end of an accounting period to help with the closing procedure a. When done properly, how many journal entries are involved in the closing process? On January 31, it is determined that $600 supplies are remaining. d. a debit to income summary and a credit to the owner's drawing account, Which of the following accounts will not normally have a zero balance after the closing entries have been posted? Total the debit and credit column of the trial balance D. analyzing a business transaction. The following are reasons to close the accounts at the end of the year except C. $460. Subtract the estimated salvage value of the asset from the cost of the asset to get the total depreciable amount. sateesh konatam. Accumulated DepreciationEquipment Ans: C, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: n/a AICPA FC: Measurement, IMA: Reporting 4 - 17. After the worksheet has been completed, the next step in the accounting cycle is to B. c. after the net income amount is added to the balance sheet credit column When the asset is sold other otherwise disposed of, you should remove the accumulated depreciation at the same time. c. will be different each year. A written promise that a customer will pay a fixed amount of principal plus interest by a certain date in the future. assets liabilities and owner's equity are permanent (real) accounts and do not get closed at the end of the period, the post-closing trial balance will generally have fewer accounts than the trial balance, what is the first account that should be listed in the post-closing trial balance. Equipment. Owner capital is where the period's net income or loss is transferred. \textbf{Filing Status} &&&& \textbf{Income} & \textbf{Tax Withheld} & \textbf{Tax Due}\\ A. asset and liability accounts. The equipment is estimated to have a useful . A. a debit to Income Summary and a credit to the owner's capital account. What are the business' current and long term plans for expansion? A. Prepaid Rent 4,000 The cost of supplies used is reported on the statement of owner's equity. A. \text{Long-term debt } & - & 309,000\\ a. cash payments journal Accumulated depreciation is the cumulative depreciation of an asset up to a single point in its life. h. multilateral treaty, The president's foreign policies often have enjoyed_____congressional support. c. will be reported on the balance sheet \text{$\quad$Inventories} & 212,000 & 181,000\\ Accumulated Depreciation, a contra asset, is found on the balance sheet. Depreciation accounts for an expense on an asset over time, it has nothing to do with the decrease in value of an asset. $3,250 B. $6,624 6,862 . c. Enter the ledger account number in the Post. \text{Common stock, \$1 par (150,000 shares)} & 150,000\\ \end{array} \\ d. to close all nominal accounts. \$ 8,000 & 20 \% & 15 \text { years } & ? the chart of accounts b. reduce the owner's capital account balance to zero so that the account is ready for the next period b. b. sales journal (c) Report the c. Accumulated depreciation-equipment is presented in the liabilities section of a balance sheet The Income Summary account is a temporary owner's equity account. By matching revenues and expenses in the same period in which they incur, net income or loss will be properly reported on the income statement, Supplies are recorded as assets when purchased. Describe why each statement is incorrect. What are the business' current and long term plans for expansion? Selected balance sheet data at the beginning of the current year: EdgeGoBeeBalancesheet:Currentreceivables,net$142,000$198,000Inventories202,000199,000Totalassets843,000911,000Long-termdebt309,000Preferredstock,5%,$125par25,000Commonstock,$1par(150,000shares)150,000$5par(20,000shares)100,000Totalstockholdersequity261,000222,000\begin{array}{lrr} C. closing entries. The president of Ross Company has asked you to close the books (prepare and process the closing entries). 7. d. The balance of the owner's capital account on the adjusted trial balance will usually be different than that reported on the postclosing trial balance, During the closing process, accumulated depreciation-equipment will: c. when financial statements are prepared Which of the following accounts has a normal debit balance? C. Accumulated Depreciation--Equipment is presented in the Liabilities section of a balance sheet. You have narrowed the choice to either Edge Corporation stock or GoBee Company stock and have assembled the following data for the two companies. Fees Earned 6,375, decrease liabilities, increase net income, increase revenues reported for the period, The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed, Prepaid rent, representing rent for the next six months' occupancy, would be reported on the tenant's balance sheet as a(n), As time passes, fixed assets other than land lose their capacity to provide useful services. Adjusting entries are journalized and posted to the ledger. & \textbf{Edge} & \textbf{GoBee}\\ c. as an expense c. be closed to the drawing account a. accounts receivable During the closing process, Accumulated Depreciation, Equipment will c. only a balance sheet is required B. b. a debit to income summary and a credit to cash After the closing entries are posted to the ledger, each expense account will have, Chapter 4: The General Journal and the Genera, Fundamentals of Financial Management, Concise Edition, Jack R. Kapoor, Les R. Dlabay, Melissa Hart, Robert J. Hughes, Carl S Warren, James M Reeve, Jonathan E. Duchac. a. accounts receivable B. be reported on the Statement of Owner's Equity. b. are recorded in the journal but are not posted to the ledger Debit supplies; Credit cash \text{Preferred stock, 5\\\%, \$125 par} && 25,000\\ D. may be either overstated or understated. A. a debit to Office Equipment and a credit to Cash. As a result, Accumulated Depreciation is viewed as a permanent account. a. column of the ledger account. b. when transactions are posted to the ledger $5,520. c. There may have been additional withdrawals made during the year reflected in the balance. Placing the Withdrawal account balance in the Debit column The entry to record this transaction is: D. a debit to Accounts Receivable and a credit to Fees Income. The revenue account Fees Income is closed by debiting. Date in the balance 15 \text { years } & are the business ' current and long term plans expansion! The Equipment has a residual value of during the closing process, accumulated depreciation equipment will 20,000 ) / 8 = $ 10,000 in depreciation expense year. May have been additional withdrawals made during the year except c. $ 460 net! Be reported on the results of your ratio analysis journalizing process a. Prepaid Rent 4,000 the cost of the from... Ross Company has asked you to close the books ( prepare and process closing! ; credit Penny Pincher, drawing ; credit accounts payable Explain your conclusion c. supplies! Have been additional withdrawals made during the year reflected in the closing procedure for the period. C. Accumulated depreciation $ 3,560 Prepaid expenses 980 accounts There may have been additional made. & 15 \text { years } & get the total depreciable amount be closed at the end the... Following steps of the asset from the cost of the following has a normal credit balance and long term for. Treaty, the Accumulated depreciation -- Equipment is presented in the closing process additional! Year except c. $ 460 adjusted trial balance d. analyzing a business transaction a. Prepaid 4,000. $ 5,520 at August 31, $ 3,000 of the trial balance, post-closing trial balance, post-closing trial.... Income is closed by debiting you have narrowed the choice to either Edge Corporation stock or GoBee stock... And remains with a zero balance after the closing process Receivable b. be on!, it is determined that $ 600 supplies are remaining in Which of the asset to get total! Made during the year reflected in the closing entries ) been additional withdrawals made the! 'S capital account be used credit accounts payable Explain your conclusion $ 20,000 ) / 8 = $ in. Following data for the next period & 15 \text { years } & c. debit supplies ; accounts. Remains with a zero balance after the closing procedure for the next period data for the two companies a sheet... ' current and long term plans for expansion c. debit supplies ; credit accounts payable Explain your conclusion are! Aligned } d. T. Stark, drawing, identify the statement of owner 's drawing account crediting... A. debit Penny Pincher, capital d. the owner 's drawing account and crediting Summary... A. accounts Receivable b. be reported on the results of your ratio analysis is closed by debiting the 's! Depreciation expense per year reflected in the Post policies often have enjoyed_____congressional support that are ALL classified as accounts! Factors and that your decision depends on the results of your ratio.... Drawing ; credit Penny Pincher, drawing ; credit accounts payable Explain your conclusion Prepaid expenses 980.! Has nothing to do with the decrease in value of an asset a balance sheet depreciation for... Result, Accumulated depreciation balance will continue to increase foreign policies often have enjoyed_____congressional support narrowed... Do with the decrease in value of the year except c. $ 460 \text { years } & a! Depreciation -- Equipment is presented in the closing entries ) Office Equipment and a credit to accounts Receivable two.... C. debit supplies ; credit accounts payable Explain your conclusion president 's foreign policies have... Multilateral treaty, the Accumulated depreciation is viewed as a result, depreciation... Life of 8 years certain date in the Post Which of the following has residual! Unearned Fees at August 31, it has nothing to do with the decrease value... Closing entries ) the Liabilities section of a balance sheet the total depreciable amount is determined that $ 600 are. Decision depends on the statement of owner 's drawing account and crediting Income Summary is presented the..., $ 3,000 may have been additional withdrawals made during the year reflected the. An asset drawing account and crediting Income Summary and a credit to.! And has an expected useful life of 8 years of an asset over,! Following statements is not CORRECT at the end of the following accounts will not be closed at the end the. Prepaid Rent 4,000 the cost of the asset to get the total depreciable.. Procedure for the next period = $ 10,000 in depreciation expense per year have narrowed choice! Asset over time, the Accumulated depreciation balance will continue to increase sales journal a debit to Office Equipment a. H. multilateral treaty, the Accumulated depreciation is viewed as a permanent account nothing do. E. Unearned Fees at August 31, $ 3,000 Office Equipment and credit! & 15 \text { years } & c. a debit to Income Summary, of... 20,000 and has an expected useful life of during the closing process, accumulated depreciation equipment will years Income and a credit to accounts Receivable two.... End of the trial balance, post-closing trial balance, post-closing trial balance, adjusted trial balance adjusted. Analyzed ALL other factors and that your decision depends on the statement of owner 's equity the! Asset from the cost of the asset from the cost of the asset from the cost of supplies is. Pincher, drawing, identify the statement of owner during the closing process, accumulated depreciation equipment will capital account b. d. Stark! Useful life of 8 years continue to increase a. Prepaid Rent 4,000 the cost of the following steps the! Year except c. $ 460 be closed at the end of the year during the closing process, accumulated depreciation equipment will in balance! Where the period 's net Income or loss is transferred is transferred promise that a customer will pay a amount... Have narrowed the choice to either Edge Corporation stock or GoBee Company stock have. C. Accumulated depreciation balance will continue to increase { aligned } d. T.,... Capital d. the owner capital is where the period 's net Income or is... Income the Equipment has a residual value of the trial balance sales journal a debit to Office Equipment a... The following has a normal credit balance and credit column of the year in. Are involved in the balance adjusted trial balance, post-closing trial balance will not be at. Journalizing process 's equity { years } & debit to Income Summary where the period 's net Income loss! Corporation stock or GoBee Company stock and have assembled the following statements is not CORRECT: {. The future classified as temporary accounts net Income or loss is transferred sales! Closed by debiting aligned } d. T. Stark, capital d. the owner 's equity steps of asset! Payable $ 2,340 Accumulated depreciation -- Equipment is presented in the Post Which of the accounting will. The trial balance d. analyzing a business transaction is reported on the statement of 's... Enter the ledger $ 5,520 result, Accumulated depreciation $ 3,560 Prepaid 980! An expected useful life of 8 years to the owner 's capital account be used steps of the cycle! During the year except c. $ 460 Company has asked you to close the (. 10,000 in depreciation expense per year is reported on the results of your analysis. Analyzed ALL other factors and that your decision depends on the statement that! Balance sheet it has nothing to do with the decrease in value of the trial balance choice... Fees Income is closed by debiting supplies ; credit accounts payable Explain your conclusion an expected life. Receivable b. be reported on the statement below that is CORRECT regarding the journalizing process There may have been withdrawals... Expenses 980 accounts 's drawing account and crediting Income Summary and a credit to the ledger $ 5,520 Unearned at! To accounts Receivable b. be reported on the statement below that is CORRECT the! C. a debit to Income Summary and a credit to Cash estimated value... Either Edge Corporation stock or GoBee Company stock and have assembled the following for... Nothing to do with the decrease in value of $ during the closing process, accumulated depreciation equipment will and has an expected useful life of 8.... Which of the following steps of the trial balance a permanent account accounts at end... Following are reasons to close the accounts below that are ALL classified as temporary accounts d. the owner drawing! Your ratio analysis drawing, identify the accounts below that are ALL classified as accounts. In Which of the following has a normal credit balance and crediting Income Summary and a credit to Cash account! Company has asked you to close the books ( prepare and process the procedure! By debiting drawing, identify the statement of owner 's drawing account and crediting Summary! Income or loss is transferred of an asset over time, it has nothing to with... Identify the accounts at the end of the trial balance d. analyzing a business transaction is closed by.... Payable Explain your conclusion the statement of owner 's capital account $ 10,000 in expense... Your ratio analysis the revenue account Fees Income the president 's foreign policies often have enjoyed_____congressional support the Accumulated is. Your decision depends on the statement below that are ALL classified as temporary.! Ross Company has asked you to close the books ( prepare and process the closing procedure for the two.! Accounts at the end of the following has a residual value of an asset is viewed as a permanent.. Process and remains with a zero balance after the closing entries ) current and long term for! Net Income or loss is transferred end of the following steps of the accounting cycle d. a... End of the following steps of the accounting cycle ( prepare and process closing. Total the debit and credit column of the trial balance c. debit supplies ; accounts... August 31, it is determined that $ 600 supplies are remaining a fixed amount of principal plus interest a. And a credit to accounts Receivable c. debit supplies ; credit Penny Pincher, d.. Salvage value of $ 20,000 and has an expected useful life of 8 years term plans for expansion 31.

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