Which account would not appear in a closing journal entry?
The Kelly Company purchased a building for $75,000 in cash. What is the effect on current assets?
A company had $250,000 of current assets and $90,000 of current liabilities before borrowing $60,000 from the bank with a 3-month note payable. What effect did the borrowing transaction have on the amount of the company’s current ratio?
After the closing process is complete, which of the following is false?
A company had the following account balances at the end of its first year of operations. Find the missing amounts.
|Inventory||400||Property and equipment||1200|
|Accounts payable||500||Salaries payable||800|
|Common Stock||1475||Retained earnings||525|
|Accounts payable||$12,000||Accounts Receivable||20,900|
|Common Stock||?||Sales Revenue||90,700|
|Cost of Goods Sold||51,500||Depreciation Expense||1,450|
|Dividends||6,600||Note Payable (due 3/1 Year 4)||20,000|
|Marketable Securities||1,400||Prepaid Expenses||18,000|
|Note Payable (due 5/30 Year 2)||12,400||Service Revenue||22,550|
|Retained Earnings (1/1 Year 1 )||39,700||Salary Expense||18,000|
|Accrued Expenses Payable||1,500||Unearned Revenue||30,500|
The following accounts reflect the correct Year 1 year-end balances after adjustment but before closing.
|Accumulated depreciation||225||Accounts payable||52|
|Common stock||100||Cost of goods sold||420|
|Inventory||90||Note payable, due 8/1/Y4||63|
|Prepaid rent||10||Rent expense||40|
|Retained earnings, 1/1/Y1||400||Salary expense||125|
|Sales revenue||855||Unearned revenue||30|
4. Closing the Income Summary Accounts:
Step 1: Close revenue and expenses to Income Summary
Step 2: Close Income Summary and Dividends to RE