Listed below are nine technical terms used in this chapter:Liquidity Nominal accounts Real accountsAdequate disclosure After-closing trial balance Closing entriesIncome summary Interim fi nancial statements DividendsEach of the following statements may (or may not) describe one of these technical terms. For eachstatement, indicate the accounting term described, or answer “None” if the statement does notdescribe any of the items.a. The accounting principle intended to assist users in interpreting financial statements.b. A term used to describe a company’s ability to pay its obligations as they come due.c. A term used in reference to accounts that are closed at year-end.d. A term used in reference to accounts that are not closed at year-end. e. A document prepared to assist management in detecting whether any errors occurred in post-ing the closing entries. f. A policy decision by a corporation to distribute a portion of its income to stockholders.g. The process by which the Retained Earnings account is updated at year-end. h. Entries made during the accounting period to correct errors in the original recording of com-plex transactions.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Listed below are nine technical terms used in this chapter:
Liquidity Nominal accounts Real accounts
Adequate disclosure After-closing trial balance Closing entries
Income summary Interim fi nancial statements Dividends
Each of the following statements may (or may not) describe one of these technical terms. For each
statement, indicate the accounting term described, or answer “None” if the statement does not
describe any of the items.
a. The accounting principle intended to assist users in interpreting financial statements.
b. A term used to describe a company’s ability to pay its obligations as they come due.
c. A term used in reference to accounts that are closed at year-end.
d. A term used in reference to accounts that are not closed at year-end.

e. A document prepared to assist management in detecting whether any errors occurred in post-
ing the closing entries.

f. A policy decision by a corporation to distribute a portion of its income to stockholders.
g. The process by which the Retained Earnings account is updated at year-end.

h. Entries made during the accounting period to correct errors in the original recording of com-
plex transactions.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Double entry bookkeeping system
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education