In the closing process of the accounting cycle, the accountant closed the dividends accountat year-end by debiting Income Summary and crediting the dividends account. The balanceof Income Summary after closing revenue, expenses and dividends are closed to RetainedEarnings. What is the effect of these entries on current-year profit and the balance in theequity account(s) at year-end?A. Profit is overstated; balance in the retained earnings account is correct.B. Profit is correct; balance in the retained earnings account is overstated.C. Profit is understated; balance in the share capital account is correct.D. Profit is correct; balance in the share capital account is correct.

Dividends:This is the amount of cash distributed to stockholders by a company out its earnings,…

Answered: In the closing process of the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A journal entry for a $75 payment for dividends was recorded as dividends expense and routed through the income statement and credited to cash. The error will cause all of the following except: A. Common stock overstated by $75 B. Expenses to be overstated by $75 C. Net income will be understated by $75 D. There will be no impact on revenues.
The following is an effort to shift income in the period as desired by management. O a. Delay paying accounts payable. O b. Shipping products in one fiscal year rather than another. O. Not declaring dividends. O d. None of the above
If the company reports a net loss for the period, then the closing entries will result in an overall ____ to Retained Earnings. A. Debit B. Credit
Selected accounts of Sparkle Electrical, Inc., at June 30, 2018, follow. Begin by closing out the revenue accounts. Close out the expense accounts. Close out the Dividends account What is Sparkle Electrical, Inc.'s Retained earnings balance at June 30, 2018? Sparkle Electrical, Inc.'s Retained earning balance at June 30, 2018 is S Create the journal entrys as stated above and find out the retained earning balance.
Which of the following is true regarding temporary accounts? Select all that apply All temporary accounts are first transferred to the income summary and then closed to retained earnings. Temporary accounts are only used when a company is in the middle of issuing common stock Temporary accounts include revenues, expenses, dividends and the income summary Dividends are a temporary account that is closed directly to retained earnings, while revenues and expenses are temporary accounts that are first transferred to the income summary and then closed to retained earnings. Temporary accounts include cash, accounts payable and retained earnings Temporary accounts include revenues but do not include expenses
If a business makes a gross profit during a financial or trading year ( select appropriate answer) A) There is no need to produce a trading account for that business B) It does not necessarily follow that a net profit will also be made during the financial or trading year. C) Its owners will be able to take drawings or earn dividends D) It follows that a net profit will also be made during that financial or trading year
Chandler, Inc. Chandler, Inc. is owned by Roscoe Chandler and provides appraisal services to individuals and companies wishing to purchase and sell fine art. Chandler, Inc. began business on January 1, 2016, and is just completing its first year of business. Roscoe asks for your help in completing the accounting cycle for the company by assisting with the closing process. Chart of Accounts ASSETS 11 Cash 12 Accounts Receivable 14 Prepaid Insurance 16 Equipment 17 Accumulated Depreciation-Equipment LIABILITIES 21 Accounts Payable 23 Salaries Payable 24 Income Taxes Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary ACCOUNT TITLE 6 Accounts Payable 7 Salaries Payable 8 Income Taxes Payable 9 Common Stock 10 Retained Earnings 11 Dividends 12 Income Summary 13 Fees Earned 14 Rent Revenue CHART OF ACCOUNTS Chandler, Inc. General Ledger Adjusted Trial Balance Before the closing entries are made, you begin with an adjusted trial balance. The closing entries are…
Please ? no plagiarism
What of the following is an incorrect statement? a) The final step in the accounting cycle is to close the temporary accounts. TESTER D Ob) A primary goal of accrual accounting is to appropriately match expenses with revenues. d) All of the statements are correct. c) Conservatism guides accountants to select the alternative that produces the highest amount of net income.

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