Chapter 4, Problem 4.4BP

(a)

To determine

Adjusting entries:

An adjusting entry is prepared when the trial balance is not up-to-date, and complete, and they are usually prepared at the end of the accounting period. This adjusting entry is essential for preparing the financial statements of the business

Income statement:

An income statement is one of the financial statements which shows the revenues, and expenses of the company. The income statement is prepared to ascertain the net income/loss of the company, by deducting the expenses from the revenues.

$\boxed{\text{Net}\text{income = Total revenues – Total expenses}}$

Statement of retained earnings:

This is an equity statement which shows the changes in the stockholders’ equity over a period of time.

Classified balance sheet:

This is the financial statement of a Company A which shows the grouping of similar assets and liabilities under subheadings.

To journalize: The adjusting entries of Company A for the year ended December 31.

(b)

To determine

To prepare: The income statement for the year ended September.

(c)

To determine

To identify: The accounts that should be closed on December 31.

(d)

To determine

To identify: The annual interest rate.