True or false: At the end of the fiscal period, after all adjusting entries have been made, the first thing we do is to prepare the balance sheet using all the permanent accounts from the adjusted trial balance. If your answer is “False”, then explain (in one sentence) why the statement is false.

True or false: At the end of the fiscal period, after all adjusting entries have been made, the first thing we do is to prepare the balance sheet using all the permanent accounts from the adjusted trial balance. If your answer is “False”, then explain (in one sentence) why the statement is false.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Answer the following short questions. Why does the purchase of a one-year insurance policy four months ago give rise to insurance expense in the current month? If services have been rendered to customers during the current accounting period but no revenue has been recorded and no bill has been sent to the customers, why is an adjusting entry needed? What types of accounts should be debited and credited by this entry?
Once an account has been closed for the period, inserting a line in the balance columns zeros out the account, making it ready for the following period.
1. II. PREPARE ALL THE ADJUSTING ENTRIES SHOWING THE DETAILED COMPUTATIONS. PREPARE THE WORKING PAPER OF VICTORY COMPANY. Note: Please keep in mind the dates of each numbers. At the end of the calendar year 2021, December 31. VICTORY COMPANY accounting in charge has to make some adjustments to its Unadjusted trial balance in order to reflect the correct accounts and figures for the current year's financial statements. The following are the transactions that needs to be recorded as adjusting entries. 1 The vehicle the company bought in February 1, 2021 needs to be depreciated. It has an estimated salvage value of 25% of the cost and a usefull of 4 years. Cash Accounts Receivable Notes Receivable Prepaid Advertising Furnitures and Fixtures Vehicle PUT YOUR DETAILED COMPUTATION HERE 2 The office tables and chairs amounting to P100,000.00 has a useful life of 3 years with a salvage value of P20,000.00. These were bought January 15, 2021. (Keep in mind the date January 15 count starting 16…
1. From page 5-6 of the VLN, when does a company write off an account? Group of answer choices A. At the end of the year as an adjusting entry. B. At the beginning of the year as an opening entry. C. As soon as the account goes bad. D. At the end of the year as a closing entry. 2. From page 5-7 of the VLN, CCT writes off customer W’s account receivable. Which is true? Group of answer choices A. Cash decreased $1,000. B. Bad debt expense increased $1,000. C. Accounts receivable decreased by $1,000. D. Net Accounts receivable decreased by $1,000.
Which statement is false about reversing entries? a. Reversing entries are required as part of the closing process. b. Recording reversing entries simplifies the recording of next period's transactions. C. Reversing entries are recorded on the first day of the subsequent accounting period. O d. A reversing entry is the opposite of the adjusting entry to which it relates.
State assumptions and answer accordingly. Assume December 31st year-end, unless otherwise stated. Assume all amounts are normal balances, unless otherwise stated. Jp holdings ending trial balance from july 31, 2000 is below. You were hired as the accountant on august 1 and your task is to complete the accounting cycle for the year end of august 30. The company prepares adjusting journal entries monthly, which means the adjusting entries for july were prepared properly by the former accountant. Debit Credit Cash $ 8,660 Accounts receivable 7,440 Supplies 1,600 Equipment Accumulated depreciation- equipment 30,000 $ 3,000 Accounts payable 6,200 Salaries payable 1,400 Unearned revenue 800 Common shares 20,000 Retained earnings 16,300 $47,700 $47.700 During July, the following transactions were completed: Paid employees $2,200 for salaries due, of which $1,400 was for july salaries payable and $800 for august. June. 6 Received $5,400 cash from customers in payment of accounts. 11 Received…
Certain adjusting entries made at the end of an accounting period are reversed at the beginning of the following period. Required: Analyze the following four adjusting entries made on December 31, and determine whether a reversing entry is needed. Date Description Reversing entry Reversing entry Debit Credit necessary not necessary Dec. 31 Interest Receivable 1,200 Interest Revenue 1,200 31 Deferred Insurance 965 Insurance Revenue 965 31 Salaries Expense 150 Salaries Payable 150 31 Deferred Rent Revenue 1,550 Rent Revenue 1,550 G
Sunshine Company began operations on January 1, 2020. In its first year, the following transactions occurred: 1. Issued common shares for $308,000 cash. 2. Borrowed $64,000 from the bank for a five-year term. 3. Purchased equipment for $202,000 cash. 4. Purchased supplies, on account, for $6,000. 5. Sales on account amounted to $106,000. 6. Collected $82,000 from customers for services provided. 7. Paid wages of $31,000 to employees. 8. Paid $21,500 for utilities (telephone, electricity, heat, & water). For Sunshine Company, the following adjustments are required prior to them being able to prepare financial statements for the year ended December 31, 2020. 1. The bank loan was taken out on January 1st and has an interest rate of 8%. Interest is due January 1st of the following year. 2. The equipment was purchased on January 1st and has an estimated useful life of 10 years and a residual value of $12,500. The company uses the straight-line depreciation method. 3. Wages in the amount of…
Which of the following is true regarding adjusting entries? O a. Adjusting entries are dated as of the first day of the new accounting period. O b. Adjusting entries are not posted to the ledger. O c. Adjusting entries are usually recorded after the end of the period but are dated as of the last day of the period. O d. Adjusting entries are optional with accrual-basis accounting.
Which of the following statements about an adjusted trial balance is correct? A. It is used to prepare financial statements. B. It is prepared to ensure assets equal liabilities. C. It is prepared at the beginning of the year. D. It is prepared before the adjusting journal entries have been made.
GIVE A DETAILED ANSWER Describe the effect on the financial statements when an adjustment is prepared that records (a) unrecorded revenue and (b) unrecorded expense. On the basis of what you have learned about adjustments, why do you think that adjusting entries are made on the last day of the accounting period rather than at several times during the accounting period?