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ACC-Chapter 4
| Question | Answer |
|---|---|
| Classified Balance Sheet | A balance sheet that contains a number of standard classifications or sections |
| Closing Entries | Entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent owner’s equity account, Owner’s Capital |
| Correcting Entries | Entries to correct errors made in recording transactions |
| Current Assets | Assets that a company expects to convert to cash or use up within one year |
| Current Liabilities | Obligations that a company expects to pay from existing current assets within the coming year |
| Income Summary | A temporary account used in closing revenue and expense accounts |
| Intangible Assets | Noncurrent assets that do not have physical substance |
| Liquidity | The ability of a company to pay obligations expected to be due within the next year |
| Long-Term Investments | Generally, investments in stocks and bonds of other companies that companies normally hold for many years. Also includes long-term assets, such as land and buildings, not currently being used in operations |
| Long-Term Liabilities | Obligations that a company expects to pay after one year |
| Operating Cycle | The average time that it takes to go from cash to cash in producing revenues |
| Permanent (real) Accounts | Accounts that relate to one or more accounting periods. Consist of all balance sheet accounts. Balances are carried forward to next accounting period. |
| Post-Closing Trail Balance | A list of permanent accounts and their balances after a company has journalized and posted closing entries |
| Property, Plant, and Equipment | Assets with relatively long useful lives, currently being used in operations |
| Reversing Entry | An entry, made at the beginning of the next accounting period, that is the exact opposite of the adjusting entry made in the previous period |
| Stockholders’ Equity | The ownership claim of shareholders on total assets. It is to a corporation what owner’s equity is to a proprietorship |
| Temporary (nominal) Accounts | Accounts that relate only to a given accounting period. Consist of all income statement accounts and owner’s drawing account. All temporary accounts are closed at end of accounting period. |
| Worksheet | A multiple-column form that may be used in making adjusting entries and in preparing financial statements |
Created by:
JJACCOUNTING
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