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Flashcards in Unit 5 Deck (27):
1

Optional working paper that an accountant can use to help them create financial statements ...

Worksheet

2

Worksheet

Captures the entire accounting process

3

Worksheet starts with

Unadjusted trail balance , adjustments adjusted trail balance, income and oe are created

4

Difference in debit and credit Columns should be the

Net gain or loss

5

Worksheet is not a substitute for financial statements but instead is a tool used to make ..

Financial statements easier

6

Benefits of worksheet

Useful in preparing FS When actual statements is post poned

Captures the entire accounting process

Auditors can use to explain audit

Avoid errors

They can be used to analyze what if situations -pro forma statements are created in this type

7

Before preparing formal statements accounts create informal documents called...

These help create actual statements

Working papers

8

Closing process

End of every accounting cycle

Accounts close so start new

Transferred to capital

9

Closing entries necessary because

We want revenue, expenses, and withdrawal acc to start with 0

2) Oe to reflect the net income

10

In closing process we must

Identify accounts for closing

Record and post closing entries

Prepare post closing trail balance

11

Temperory accounts

Accumulate data related to one accounting period

12

Income summary

Collect data for one period and then closed

13

Permenant or real accounts

Report on transactions that effect more than one period

Carry balance from period to period

Ex balance sheet accounts

14

4 step closing process

1) close revenue account to income summary acc
2)close expense acc to income summary acc
3) close income summary acc to Owners cap
4) close withdrawals account to owners capital account

15

Income summary is a temporary account

True

16

When expenses exceed revenue there is a loss and income summary acc has a credit balance

False

17

Post closing trial balance

Listing of all acc which were not closed

18

Classified balance sheet

Organizes assets and liabilities into subgroups

19

Assets in classified balance sheet

Current assets
Non current assets
Property plant and equipment
Intangible assets

20

Liabilities and owners equity

Current liabilities
Long term liabilities
Owners equity

21

Operating cycle

Time between paying for items and receiving cash for items

Usually less than 1 year

22

Current assets

Order of liquidity

Cash

Anything else that can be sold

23

Long term investments

Held for more than 1 year
Ex land not being used

24

Property plant and equipment

Tangible assets used for more than 1 acc period

Ex Equipment vehicles buildings and land

25

Intangible assets

Long term resources used to produce or sell products

Ex patents trademarks and copyrights

26

Current liabilities

Liabilities due within 1 year recorded in order they are due

27

Optional entries that transfer the balances sheet acc which arose as a result adjustments to income statement acc

Reversing entries