id stringlengths 36 36 | embedding list | document stringlengths 70 999 | metadata stringlengths 691 694 |
|---|---|---|---|
0e4e9fe3-bb7b-485d-9e67-1496679c5dec | [
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0.06261028349399567,
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0.027938293293118477,
... | period.
• Prepaid expenses: Prepaid expenses are assets paid for before their use. When they are used, this asset’s
value is reduced and an expense is recognized. Some examples include supplies, insurance, and
depreciation.
• Unearned revenues: These are customer advanced payments for product or services yet to be provided.
When the company provides the product or service, revenue is then recognized.
• Accrued revenues: Accrued revenues are revenues earned in a period but have yet to be recorded and no
money has been collected. Accrued revenues are updated at the end of the period to recognize revenue
and money owed to the company.
• Accrued expenses: Accrued expenses are incurred in a period but have yet to be recorded and no money
has been paid. Accrued expenses are updated to reflect the expense and the company’s liability.
4.3 Record and Post the Common Types of Adjusting Entries | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "batch_upload": true, "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1"} |
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0.03636700287461281,
0.023687459528446198,
-0.016876261681318283,
-0.027954045683145523,
-... | has been paid. Accrued expenses are updated to reflect the expense and the company’s liability.
4.3 Record and Post the Common Types of Adjusting Entries
• Rules for adjusting entries: The rules for recording adjusting entries are as follows: every adjusting entry
will have one income statement account and one balance sheet account, cash will never be in an adjusting
entry, and the adjusting entry records the change in amount that occurred during the period.
• Posting adjusting entries: Posting adjusting entries is the same process as posting general journal entries.
The additional adjustments may add accounts to the end of the period or may change account balances
from the earlier journal entry step in the accounting cycle.
4.4 Use the Ledger Balances to Prepare an Adjusted Trial Balance
• Adjusted trial balance: The adjusted trial balance lists all accounts in the general ledger, including | {"moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
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0.03460590913891792,
0.011955827474594116,
0.013342083431780338,
-0.023838751018047333,
-0.083... | 4.4 Use the Ledger Balances to Prepare an Adjusted Trial Balance
• Adjusted trial balance: The adjusted trial balance lists all accounts in the general ledger, including
adjusting entries, which have nonzero balances. This trial balance is an important step in the accounting
process because it helps identify any computational errors throughout the first five steps in the cycle.
4.5 Prepare Financial Statements Using the Adjusted Trial Balance
•
Income Statement: The income statement shows the net income or loss as a result of revenue and
expense activities occurring in a period.
• Statement of Retained Earnings: The statement of retained earnings shows the effects of net income
(loss) and dividends on the earnings the company maintains.
• Balance Sheet: The balance sheet visually represents the accounting equation, showing that assets
balance with liabilities and equity. | {"moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true} |
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0.046397458761930466,
0.0035793697461485863,
-0.039767906069755554,
-0.092... | (loss) and dividends on the earnings the company maintains.
• Balance Sheet: The balance sheet visually represents the accounting equation, showing that assets
balance with liabilities and equity.
• 10-column worksheet: The 10-column worksheet organizes data from the trial balance all the way through
the financial statements.
264
Chapter 4 The Adjustment Process
Multiple Choice
1.
4.1 Which of the following is any reporting period shorter than a full year (fiscal or calendar) and can
encompass monthly, quarterly, or half-year statements?
A.
B.
C.
D.
fiscal year
interim period
calendar year
fixed year
2.
4.1 Which of the following is the federal, independent agency that provides oversight of public
companies to maintain fair representation of company financial activities for investors to make informed
decisions?
A.
IRS (Internal Revenue Service)
B. SEC (Securities and Exchange Commission)
C.
FASB (Financial Accounting Standards Board) | {"creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00", "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "batch_upload": true, "total_pages": 1055, "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
90142929-f890-4e1e-ad96-f0aafacf709d | [
-0.007563264574855566,
-0.022969909012317657,
-0.0973367914557457,
-0.034801118075847626,
0.028073281049728394,
-0.0005815867334604263,
0.02890319749712944,
0.017481813207268715,
0.0333455353975296,
0.008253103122115135,
0.025859752669930458,
-0.0024030522909015417,
-0.0385780856013298,
-0... | decisions?
A.
IRS (Internal Revenue Service)
B. SEC (Securities and Exchange Commission)
C.
FASB (Financial Accounting Standards Board)
D. FDIC (Federal Deposit Insurance Corporation)
3.
4.1 Revenues and expenses must be recorded in the accounting period in which they were earned or
incurred, no matter when cash receipts or outlays occur under which of the following accounting methods?
A. accrual basis accounting
B.
C.
D.
cash basis accounting
tax basis accounting
revenue basis accounting
4.
4.1 Which of the following breaks down company financial information into specific time spans, and can
cover a month, quarter, half-year, or full year?
A. accounting period
B.
yearly period
C. monthly period
D.
fiscal period
5.
4.1 Which of the following is a twelve-month reporting cycle that can begin in any month, except January
1, and records financial data for that twelve-month consecutive period?
A.
B.
C.
D.
fixed year
interim period
calendar year | {"creationdate": "2019-04-24T10:32:54-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "file_size_mb": 156.7, "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
c74d75a1-a988-47ab-8ef9-2a41d6dca948 | [
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0.006912765558809042,
-0.02438717521727085,
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-0.01958431676030159,
0.021046342328190804,
0.032666828483343124,
0.03391706198453903,
0.0807822123169899,
-0.06380755454301834,
0.02207489311695099,
-0.04... | 1, and records financial data for that twelve-month consecutive period?
A.
B.
C.
D.
fixed year
interim period
calendar year
fiscal year
6.
4.2 Which type of adjustment occurs when cash is either collected or paid, but the related income or
expense is not reportable in the current period?
A. accrual
B. deferral
C. estimate
D.
cull
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
265
7.
4.2 Which type of adjustment occurs when cash is not collected or paid, but the related income or
expense is reportable in the current period?
A. accrual
B. deferral
C. estimate
D.
cull
8.
4.2 If an adjustment includes an entry to a payable or receivable account, which type of adjustment is it?
A. accrual
B. deferral
C. estimate
D.
cull
9.
4.2 If an adjustment includes an entry to Accumulated Depreciation, which type of adjustment is it?
A. accrual
B. deferral
C. estimate
D.
cull
10. | {"upload_timestamp": "2026-02-07T07:23:08.167529", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "file_type": ".pdf", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)"} |
3794b1dc-cf28-4485-bccd-3913fee61acc | [
-0.04112067073583603,
-0.02035561203956604,
0.012712940573692322,
-0.011057675816118717,
-0.00022975995671004057,
-0.014705446548759937,
0.00563034089282155,
-0.0073264953680336475,
0.07365167886018753,
0.04750283807516098,
0.07715681195259094,
-0.07832098752260208,
0.048606667667627335,
-... | B. deferral
C. estimate
D.
cull
9.
4.2 If an adjustment includes an entry to Accumulated Depreciation, which type of adjustment is it?
A. accrual
B. deferral
C. estimate
D.
cull
10.
4.2 Rent collected in advance is an example of which of the following?
A. accrued expense
B. accrued revenue
C. deferred expense (prepaid expense)
D. deferred revenue (unearned revenue)
11.
4.2 Rent paid in advance is an example of which of the following?
A. accrued expense
B. accrued revenue
C. deferred expense (prepaid expense)
D. deferred revenue (unearned revenue)
12.
4.2 Salaries owed but not yet paid is an example of which of the following?
A. accrued expense
B. accrued revenue
C. deferred expense (prepaid expense)
D. deferred revenue (unearned revenue)
13.
4.2 Revenue earned but not yet collected is an example of which of the following?
A. accrued expense
B. accrued revenue
C. deferred expense (prepaid expense)
D. deferred revenue (unearned revenue)
14. | {"producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "file_size_mb": 156.7} |
1e0dd14d-fc32-4651-9822-8cf3f02bb18a | [
-0.0944124236702919,
0.04203692451119423,
-0.03658680617809296,
-0.05673060938715935,
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0.06394176185131073,
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-0.... | A. accrued expense
B. accrued revenue
C. deferred expense (prepaid expense)
D. deferred revenue (unearned revenue)
14.
4.3 What adjusting journal entry is needed to record depreciation expense for the period?
A. a debit to Depreciation Expense; a credit to Cash
B. a debit to Accumulated Depreciation; a credit to Depreciation Expense
C. a debit to Depreciation Expense; a credit to Accumulated Depreciation
D. a debit to Accumulated Depreciation; a credit to Cash
266
Chapter 4 The Adjustment Process
15.
4.3 Which of these transactions requires an adjusting entry (debit) to Unearned Revenue?
A.
B.
C.
D.
revenue earned but not yet collected
revenue collected but not yet earned
revenue earned before being collected, when it is later collected
revenue collected before being earned, when it is later earned
16.
4.4 What critical purpose does the adjusted trial balance serve?
A.
B.
C.
D.
It proves that transactions have been posted correctly | {"file_type": ".pdf", "batch_upload": true, "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
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0.024370994418859482,
0.04539475962519646,
0.02444668859243393,
0.04214220121502876,
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0.030138755217194557,
0.05577418580651283,
0.023589616641402245,
-0.0003297131333965808,
-0.08... | 16.
4.4 What critical purpose does the adjusted trial balance serve?
A.
B.
C.
D.
It proves that transactions have been posted correctly
It is the source document from which to prepare the financial statements
It shows the beginning balances of every account, to be used to start the new year’s records
It proves that all journal entries have been made correctly.
17.
4.4 Which of the following accounts’ balance would be a different number on the Balance Sheet than it
is on the adjusted trial balance?
A. accumulated depreciation
B. unearned service revenue
C.
retained earnings
D. dividends
18.
4.5 On which financial statement would the Supplies account appear?
A. Balance Sheet
B.
Income Statement
C. Retained Earnings Statement
D. Statement of Cash Flows
19.
4.5 On which financial statement would the Dividends account appear?
A. Balance Sheet
B.
Income Statement
C. Retained Earnings Statement
D. Statement of Cash Flows
20. | {"file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00"} |
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-0.0008110786438919604,
0.028944868594408035,
0.06690239161252975,
0.010387693531811237,
0.01227798592299223,
0.03986918926239014,
0.03493596613407135,
-0.04752163961529732,
0.02895832434296608,
-0.07487... | 19.
4.5 On which financial statement would the Dividends account appear?
A. Balance Sheet
B.
Income Statement
C. Retained Earnings Statement
D. Statement of Cash Flows
20.
4.5 On which financial statement would the Accumulated Depreciation account appear?
A. Balance Sheet
B.
Income Statement
C. Retained Earnings Statement
D. Statement of Cash Flows
21.
4.5 On which two financial statements would the Retained Earnings account appear?
A. Balance Sheet
B.
Income Statement
C. Retained Earnings Statement
D. Statement of Cash Flows
Questions
1.
2.
4.1 Describe the revenue recognition principle. Give specifics.
4.1 Describe the expense recognition principle (matching principle). Give specifics.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
267
3.
4.2 What parts of the accounting cycle require analytical processes, rather than methodical processes?
Explain.
4.
5. | {"batch_upload": true, "total_pages": 1055, "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
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0.05240495502948761,
0.027228984981775284,
-0.014384238049387932,
0.05373349040746689,
-0.117... | 267
3.
4.2 What parts of the accounting cycle require analytical processes, rather than methodical processes?
Explain.
4.
5.
4.2 Why is the adjusting process needed?
4.2 Name two types of adjusting journal entries that are commonly made before preparing financial
statements? Explain, with examples.
6.
7.
8.
9.
4.2 Are there any accounts that would never have an adjusting entry? Explain.
4.2 Why do adjusting entries always include both balance sheet and income statement accounts?
4.2 Why are adjusting journal entries needed?
4.3 If the Supplies account had an ending balance of $1,200 and the actual count for the remaining
supplies was $400 at the end of the period, what adjustment would be needed?
10.
4.3 When a company collects cash from customers before performing the contracted service, what is
the impact, and how should it be recorded?
11.
4.3 If the Prepaid Insurance account had a balance of $12,000, representing one year’s policy premium, | {"creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
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0.04797779768705368,
0.08557941019535065,
0.04154083877801895,
0.03298906609416008,
0.06674443185329437,
0.035353194922208786,
0.007542076054960489,
0.06329283118247986,
-0.130893... | the impact, and how should it be recorded?
11.
4.3 If the Prepaid Insurance account had a balance of $12,000, representing one year’s policy premium,
which was paid on July 1, what entry would be needed to adjust the Prepaid Insurance account at the end of
December, before preparing the financial statements?
12.
4.3 If adjusting entries include these listed accounts, what other account must be in that entry as well?
(A) Depreciation expense; (B) Unearned Service Revenue; (C) Prepaid Insurance; (D) Interest Payable.
13.
4.4 What is the difference between the trial balance and the adjusted trial balance?
14.
4.4 Why is the adjusted trial balance trusted as a reliable source for building the financial statements?
15.
4.5 Indicate on which financial statement the following accounts (from the adjusted trial balance) would
appear: (A) Sales Revenue; (B) Unearned Rent Revenue; (C) Prepaid Advertising; (D) Advertising Expense; (E)
Dividends; (F) Cash.
Exercise Set A
EA1. | {"file_size_mb": 156.7, "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting"} |
25a270a2-ed39-4215-ac32-177252b9685d | [
-0.048802267760038376,
0.0029281743336468935,
-0.058422159403562546,
-0.04911845549941063,
-0.0028011377435177565,
0.05715002864599228,
0.07720864564180374,
-0.01833348721265793,
0.007543671876192093,
0.036351438611745834,
0.10517650097608566,
-0.05582677200436592,
0.04857770353555679,
-0.... | appear: (A) Sales Revenue; (B) Unearned Rent Revenue; (C) Prepaid Advertising; (D) Advertising Expense; (E)
Dividends; (F) Cash.
Exercise Set A
EA1.
4.2 Identify whether each of the following transactions, which are related to revenue recognition, are
accrual, deferral, or neither.
A.
B.
C.
D.
sold goods to customers on credit
collected cash from customer accounts
sold goods to customers for cash
collected cash in advance for goods to be delivered later
EA2.
4.2 Identify whether each of the following transactions, which are related to expense recognition, are
accrual, deferral, or neither.
A. paid an expense for the current month
B. prepaid an expense for future months
C. made a payment to reduce accounts payable
D.
incurred a current-month expense, to be paid next month
268
Chapter 4 The Adjustment Process
EA3.
4.2 Identify which type of adjustment is indicated by these transactions. Choose accrued revenue, | {"total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_type": ".pdf", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7} |
08f2fc9c-1851-4050-9a5f-d0110446b98e | [
-0.046627406030893326,
0.06335413455963135,
0.02034553326666355,
0.019344156607985497,
0.02106858231127262,
0.016676850616931915,
0.013043273240327835,
-0.021121898666024208,
-0.006197725888341665,
0.09150227904319763,
0.08793553709983826,
-0.006119921337813139,
0.04595613479614258,
-0.093... | Chapter 4 The Adjustment Process
EA3.
4.2 Identify which type of adjustment is indicated by these transactions. Choose accrued revenue,
accrued expense, deferred revenue, or deferred expense.
A.
B.
C.
D.
rent paid in advance for use of property
cash received in advance for future services
supplies inventory purchased
fees earned but not yet collected
EA4.
4.2 The following accounts were used to make year-end adjustments. Identify the related account that
is associated with this account (the other account in the adjusting entry).
A. Salaries Payable
B. Depreciation Expense
C.
Supplies
D. Unearned Rent
EA5.
4.2 Reviewing insurance policies revealed that a single policy was purchased on August 1, for one
year’s coverage, in the amount of $6,000. There was no previous balance in the Prepaid Insurance account at
that time. Based on the information provided:
A. Make the December 31 adjusting journal entry to bring the balances to correct. | {"creationdate": "2019-04-24T10:32:54-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_type": ".pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)"} |
62e7e2cd-24d9-473b-91d3-d39e3e73f93c | [
-0.08932467550039291,
0.08418913930654526,
-0.021073412150144577,
-0.03012879379093647,
-0.025473838672041893,
-0.02170507423579693,
0.00014340097550302744,
-0.0021197423338890076,
0.01742440089583397,
0.08429399877786636,
0.03381462022662163,
-0.014245615340769291,
-0.009434406645596027,
... | that time. Based on the information provided:
A. Make the December 31 adjusting journal entry to bring the balances to correct.
B. Show the impact that these transactions had.
EA6.
4.3 On July 1, a client paid an advance payment (retainer) of $5,000 to cover future legal services.
During the period, the company completed $3,500 of the agreed-on services for the client. There was no
beginning balance in the Unearned Revenue account for the period. Based on the information provided,
A. Make the December 31 adjusting journal entry to bring the balances to correct.
B. Show the impact that these transactions had.
EA7.
4.3 Reviewing payroll records indicates that employee salaries that are due to be paid on January 3
include $3,575 in wages for the last week of December. There was no previous balance in the Salaries Payable
account at that time. Based on the information provided, make the December 31 adjusting journal entry to
bring the balances to correct.
EA8. | {"creationdate": "2019-04-24T10:32:54-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
7d1cd595-b4ed-4b86-be32-77c72898e9f0 | [
-0.03850765898823738,
0.058594319969415665,
-0.04211677983403206,
0.01809476688504219,
-0.010718259960412979,
-0.008934207260608673,
0.05706598237156868,
0.05602412670850754,
-0.03337632119655609,
0.037201888859272,
0.07936087995767593,
-0.029379749670624733,
0.0395529568195343,
-0.0594856... | account at that time. Based on the information provided, make the December 31 adjusting journal entry to
bring the balances to correct.
EA8.
4.3 Supplies were purchased on January 1, to be used throughout the year, in the amount of $8,500.
On December 31, a physical count revealed that the remaining supplies totaled $1,200. There was no
beginning of the year balance in the Supplies account. Based on the information provided:
A. Create journal entries for the original transaction
B. Create journal entries for the December 31 adjustment needed to bring the balances to correct
C.
Show the activity, with ending balance
EA9.
4.3 Prepare journal entries to record the following business transaction and related adjusting entry.
A.
January 12, purchased supplies for cash, to be used all year, $3,850
B. December 31, physical count of remaining supplies, $800
EA10.
4.3 Prepare journal entries to record the following adjustments.
A.
Insurance that expired this period, $18,000 | {"upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
6eb948d7-dfa2-4bd2-94e6-6f58a1c1ae14 | [
0.03267165273427963,
0.07010257989168167,
-0.008161833509802818,
0.015616648830473423,
-0.03364406153559685,
0.006467921193689108,
-0.02700071781873703,
0.03656396269798279,
-0.007417753338813782,
0.05268995463848114,
0.043189339339733124,
-0.024401795119047165,
0.06299392879009247,
-0.110... | B. December 31, physical count of remaining supplies, $800
EA10.
4.3 Prepare journal entries to record the following adjustments.
A.
Insurance that expired this period, $18,000
B. Depreciation on assets, $4,800
C.
Salaries earned by employees but unpaid, $1,200
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
269
EA11.
4.3 Prepare adjusting journal entries, as needed, considering the account balances excerpted from
the unadjusted trial balance and the adjustment data.
A. depreciation on fixed assets, $ 8,500
B. unexpired prepaid rent, $12,500
C.
remaining balance of unearned revenue, $555
EA12.
4.4 Prepare an adjusted trial balance from the following adjusted account balances (assume
accounts have normal balances).
EA13.
4.4 Prepare an adjusted trial balance from the following account information, considering the
adjustment data provided (assume accounts have normal balances).
Adjustments needed: | {"moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_type": ".pdf"} |
54664d5e-c20e-49c9-8a34-564ed877c004 | [
-0.057123664766550064,
0.10794392973184586,
-0.03501048684120178,
-0.06513522565364838,
-0.054423749446868896,
0.07777190953493118,
0.04839116334915161,
0.05024838075041771,
0.022529281675815582,
0.025867220014333725,
0.07043562829494476,
-0.05785470828413963,
0.014091772958636284,
-0.1160... | EA13.
4.4 Prepare an adjusted trial balance from the following account information, considering the
adjustment data provided (assume accounts have normal balances).
Adjustments needed:
Salaries due to administrative employees, but unpaid at period end, $2,000
Insurance still unexpired at end of the period, $12,000
270
Chapter 4 The Adjustment Process
EA14.
4.5 From the following Company A adjusted trial balance, prepare simple financial statements, as
follows:
A.
Income Statement
B. Retained Earnings Statement
C. Balance Sheet
B Exercise Set B
EB1.
4.1 Identify whether each of the following transactions, which are related to revenue recognition, are
accrual, deferral, or neither.
A. provided legal services to client, who paid at the time of service
B.
C.
received cash for legal services performed last month
received cash from clients for future services to be provided
D. provided legal services to client, to be collected next month
EB2. | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf"} |
dabb4032-cab7-4b4a-8eb9-74d334459ca1 | [
-0.07829874753952026,
0.08527276664972305,
-0.02638951875269413,
-0.07661093771457672,
-0.00895283930003643,
0.049906786531209946,
0.053629543632268906,
0.008520516566932201,
0.020633922889828682,
0.06722446531057358,
0.07569640874862671,
-0.04661524295806885,
0.016572589054703712,
-0.0727... | B.
C.
received cash for legal services performed last month
received cash from clients for future services to be provided
D. provided legal services to client, to be collected next month
EB2.
4.1 Identify whether each of the following transactions, which are related to expense recognition, are
accrual, deferral, or neither.
A.
recorded employee salaries earned, to be paid in future month
B. paid employees for current month salaries
C. paid employee salaries for work performed in a prior month
D. gave an employee an advance on future wages
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
271
EB3.
4.2 Indicate what impact the following adjustments have on the accounting equation, Assets =
Liabilities + Equity (assume normal balances).
Impact 1
Impact 2
A.
B.
C.
D.
Prepaid Insurance adjusted from $5,000 to $3,600
Interest Payable adjusted from $5,300 to $6,800 | {"creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00"} |
9e78a8ea-947f-4772-9911-aff7197d22bd | [
-0.034030649811029434,
0.07051301002502441,
-0.017318803817033768,
-0.014564923010766506,
0.03022352047264576,
0.07863036543130875,
0.039421938359737396,
0.0345250740647316,
-0.027634697034955025,
0.047396469861269,
0.07086268812417984,
-0.012660415843129158,
0.07902882248163223,
-0.114688... | Liabilities + Equity (assume normal balances).
Impact 1
Impact 2
A.
B.
C.
D.
Prepaid Insurance adjusted from $5,000 to $3,600
Interest Payable adjusted from $5,300 to $6,800
Prepaid Insurance adjusted from $18,500 to $6,300
Supplies account balance $500, actual count $220
Table 4.5
EB4.
4.2 What two accounts are affected by the needed adjusting entries?
A.
supplies actual counts are lower than account balance
B. employee salaries are due but not paid at year end
C.
insurance premiums that were paid in advance have expired
EB5.
4.3 Reviewing insurance policies revealed that a single policy was purchased on March 1, for one
year's coverage, in the amount of $9,000. There was no previous balance in the Prepaid Insurance account at
that time. Based on the information provided,
A. Make the December 31 adjusting journal entry to bring the balances to correct.
B. Show the impact that these transactions had.
EB6. | {"moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00"} |
64d0f6a8-0a26-460c-8dc0-f18cca74d53c | [
-0.04445018246769905,
0.0942816361784935,
0.022798461839556694,
0.031819481402635574,
-0.031050926074385643,
-0.002971249632537365,
-0.016378989443182945,
-0.01666284166276455,
-0.03955327719449997,
0.06365939974784851,
0.03893430531024933,
-0.027188628911972046,
0.010206909850239754,
-0.0... | that time. Based on the information provided,
A. Make the December 31 adjusting journal entry to bring the balances to correct.
B. Show the impact that these transactions had.
EB6.
4.3 On September 1, a company received an advance rental payment of $12,000, to cover six months’
rent on an office building. There was no beginning balance in the Unearned Rent account for the period.
Based on the information provided,
A. Make the December 31 adjusting journal entry to bring the balances to correct.
B. Show the impact that these transactions had.
EB7.
4.3 Reviewing payroll records indicates that one-fifth of employee salaries that are due to be paid on
the first payday in January, totaling $15,000, are actually for hours worked in December. There was no previous
balance in the Salaries Payable account at that time. Based on the information provided, make the December
31 adjusting journal entry to bring the balances to correct.
EB8. | {"creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055} |
540c8b58-d35a-43a3-80e8-ece0e802b5c7 | [
-0.08304567635059357,
0.11631137132644653,
-0.025431031361222267,
-0.04554006829857826,
-0.060897406190633774,
0.05163406580686569,
-0.0010253371438011527,
0.05617225170135498,
-0.00034445052733644843,
0.030672790482640266,
0.021710993722081184,
-0.04640020802617073,
0.04479142650961876,
-... | balance in the Salaries Payable account at that time. Based on the information provided, make the December
31 adjusting journal entry to bring the balances to correct.
EB8.
4.3 On July 1, a client paid an advance payment (retainer) of $10,000, to cover future legal services.
During the period, the company completed $6,200 of the agreed-on services for the client. There was no
beginning balance in the Unearned Revenue account for the period. Based on the information provided, make
the journal entries needed to bring the balances to correct for:
A. original transaction
B. December 31 adjustment
EB9.
4.3 Prepare journal entries to record the business transaction and related adjusting entry for the
following:
A. March 1, paid cash for one year premium on insurance contract, $18,000
B. December 31, remaining unexpired balance of insurance, $3,000
272
Chapter 4 The Adjustment Process
EB10.
4.3 Prepare journal entries to record the following adjustments:
A.
B.
C. | {"batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader"} |
a0fa7680-7a86-4fb5-b3ec-420b2ea9208d | [
-0.025227943435311317,
0.1092410609126091,
0.017772765830159187,
-0.028961390256881714,
-0.03632856160402298,
0.038536712527275085,
-0.02707153931260109,
0.06248972564935684,
-0.05005337670445442,
0.03754207119345665,
0.03395015373826027,
-0.08242185413837433,
0.02473629266023636,
-0.13674... | B. December 31, remaining unexpired balance of insurance, $3,000
272
Chapter 4 The Adjustment Process
EB10.
4.3 Prepare journal entries to record the following adjustments:
A.
B.
C.
revenue earned but not collected, nor recorded, $14,000
revenue earned that had originally been collected in advance, $8,500
taxes due but not yet paid, $ 2,750
EB11.
4.3 Prepare adjusting journal entries, as needed, considering the account balances excerpted from
the unadjusted trial balance and the adjustment data.
A. amount due for employee salaries, $4,800
B. actual count of supplies inventory, $ 2,300
C. depreciation on equipment, $3,000
EB12.
4.4 Prepare an adjusted trial balance from the following adjusted account balances (assume accounts
have normal balances).
EB13.
4.4 Prepare an adjusted trial balance from the following account information, considering the
adjustment data provided (assume accounts have normal balances).
Adjustments needed: | {"file_type": ".pdf", "moddate": "2020-08-05T15:26:11-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting"} |
88e93dab-597c-4b83-b253-7326a87d1315 | [
-0.03427393361926079,
0.07217719405889511,
0.009021875448524952,
-0.04842980578541756,
-0.004441855475306511,
0.08457119762897491,
0.06587135791778564,
0.028128376230597496,
0.006708619650453329,
0.02846933715045452,
0.08302052319049835,
-0.07431845366954803,
0.004566681105643511,
-0.07670... | EB13.
4.4 Prepare an adjusted trial balance from the following account information, considering the
adjustment data provided (assume accounts have normal balances).
Adjustments needed:
• Physical count of supplies inventory remaining at end of period, $2,150
• Taxes payable at end of period, $3,850
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
273
EB14.
4.5 From the following Company B adjusted trial balance, prepare simple financial statements, as
follows:
A.
Income Statement
B. Retained Earnings Statement
C. Balance Sheet
Problem Set A
PA1.
4.1 Identify whether each of the following transactions, which are related to revenue recognition, are
accrual, deferral, or neither.
A. earn now, collect now
B. earn now, collect later
C. earn later, collect now
PA2.
4.1 To demonstrate the difference between cash account activity and accrual basis profits (net | {"batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader"} |
01b89806-3b8a-49ad-9adc-2eb96f6016df | [
-0.07890886813402176,
0.01621140167117119,
-0.0036874962970614433,
-0.06931152939796448,
-0.035132862627506256,
0.049559637904167175,
0.04192643612623215,
0.0087813138961792,
0.058558620512485504,
0.04984677955508232,
0.08440034091472626,
-0.07713885605335236,
0.0030221245251595974,
-0.057... | A. earn now, collect now
B. earn now, collect later
C. earn later, collect now
PA2.
4.1 To demonstrate the difference between cash account activity and accrual basis profits (net
income), note the amount each transaction affects cash and the amount each transaction affects net income.
A. paid balance due for accounts payable $6,900
B.
charged clients for legal services provided $5,200
C. purchased supplies on account $1,750
D.
E.
collected legal service fees from clients for current month $3,700
issued stock in exchange for a note payable $10,000
PA3.
4.2 Identify which type of adjustment is indicated by these transactions. Choose accrued revenue,
accrued expense, deferred revenue, deferred expense, or estimate.
A. utilities owed but not paid
B.
C.
D.
cash received in advance for future services
supplies inventory purchased
fees earned but not yet collected
E. depreciation expense recorded
F.
insurance paid for future periods
274 | {"moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, "total_pages": 1055, "uploaded_via": "batch_uploader", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
a8f8d786-255e-4f6b-867c-d22f8fd17f2c | [
-0.02352607063949108,
0.06614876538515091,
0.05175326019525528,
-0.027867743745446205,
0.002517566317692399,
0.04956469684839249,
0.022728703916072845,
0.014575023204088211,
0.012202835641801357,
0.05620798096060753,
0.07858563214540482,
-0.044187333434820175,
0.04327460378408432,
-0.10101... | C.
D.
cash received in advance for future services
supplies inventory purchased
fees earned but not yet collected
E. depreciation expense recorded
F.
insurance paid for future periods
274
Chapter 4 The Adjustment Process
PA4.
4.2 Identify which type of adjustment is associated with this account, and what is the other account in
the adjustment? Choose accrued revenue, accrued expense, deferred revenue, or deferred expense.
A. accounts receivable
B.
interest payable
C. prepaid insurance
D. unearned rent
PA5.
4.2 Indicate what impact the following adjustments have on the accounting equation, Assets =
Liabilities + Equity (assume normal balances).
Impact 1
Impact 2
A.
B.
C.
D.
Unearned Fees adjusted from $7,000 to $5,000
Recorded depreciation expense of $12,000
Prepaid Insurance adjusted from $18,500 to $6,300
Supplies account balance $500, actual count $220
Table 4.6
PA6.
4.2 What two accounts are affected by each of these adjustments? | {"creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "producer": "Prince 11 (www.princexml.com)", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "file_type": ".pdf", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
43a27a68-0de5-41f7-8bf2-87597dbb5c6f | [
-0.012907988391816616,
0.07942503690719604,
0.020810892805457115,
-0.02852182276546955,
-0.038726624101400375,
0.05561182275414467,
-0.033105600625276566,
0.03298715874552727,
-0.022635553032159805,
0.07109028846025467,
0.013233911246061325,
-0.03193582221865654,
0.07615315169095993,
-0.09... | Prepaid Insurance adjusted from $18,500 to $6,300
Supplies account balance $500, actual count $220
Table 4.6
PA6.
4.2 What two accounts are affected by each of these adjustments?
A. billed customers for services provided
B. adjusted prepaid insurance to correct
C.
D.
E.
recorded depreciation expense
recorded unpaid utility bill
adjusted supplies inventory to correct
PA7.
4.3 Using the following information:
A. make the December 31 adjusting journal entry for depreciation
B. determine the net book value (NBV) of the asset on December 31
• Cost of asset, $250,000
• Accumulated depreciation, beginning of year, $80,000
• Current year depreciation, $25,000
PA8.
4.3 Use the following account T-balances (assume normal balances) and correct balance information
to make the December 31 adjusting journal entries.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
275
PA9. | {"file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)"} |
5956bda2-d9f9-4095-a727-f6da9e34085e | [
-0.012065351940691471,
0.07972829788923264,
-0.023228265345096588,
-0.06612543761730194,
-0.038227710872888565,
0.011129537597298622,
0.0357942171394825,
0.06973728537559509,
-0.04223155230283737,
0.1278502345085144,
-0.001677279477007687,
-0.027432821691036224,
0.045902326703071594,
-0.05... | to make the December 31 adjusting journal entries.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
275
PA9.
4.3 Use the following account T-balances (assume normal balances) and correct balance information
to make the December 31 adjusting journal entries.
PA10.
4.3 Prepare journal entries to record the following transactions. Create a T-account for Interest
Payable, post any entries that affect the account, and tally the ending balance for the account (assume Interest
Payable beginning balance of $2,500).
A. March 1, paid interest due on note, $2,500
B. December 31, interest accrued on note payable, $4,250
PA11.
4.3 Prepare journal entries to record the following transactions. Create a T-account for Prepaid
Insurance, post any entries that affect the account, and tally the ending balance for the account (assume
Prepaid Insurance beginning balance of $9,000). | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_type": ".pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf"} |
4e6f0454-3a4f-4f8c-ab0c-4328972cb609 | [
-0.04201740771532059,
0.1019584909081459,
0.007429362274706364,
-0.007094950415194035,
-0.0328654982149601,
0.03276372328400612,
-0.009073540568351746,
0.03562333807349205,
-0.009293785318732262,
0.06988532841205597,
0.05922694876790047,
-0.06043976917862892,
0.02814629301428795,
-0.133413... | Insurance, post any entries that affect the account, and tally the ending balance for the account (assume
Prepaid Insurance beginning balance of $9,000).
A. April 1, paid cash for one-year policy, $18,000
B. December 31, unexpired premiums, $4,500
PA12.
4.3 Determine the amount of cash expended for Salaries during the month, based on the entries in
the following accounts (assume 0 beginning balances).
PA13.
4.3 Prepare adjusting journal entries, as needed, considering the account balances excerpted from
the unadjusted trial balance and the adjustment data.
A.
B.
C.
D.
supplies actual count at year end, $6,500
remaining unexpired insurance, $6,000
remaining unearned service revenue, $1,200
salaries owed to employees, $2,400
E. depreciation on property plant and equipment, $18,000
276
Chapter 4 The Adjustment Process
PA14.
4.4 Prepare an adjusted trial balance from the adjusted account balances; solve for the one missing | {"creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "batch_upload": true, "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
82b93e95-1274-46c1-a8c8-deb927ee3f42 | [
-0.01653025858104229,
0.09824348986148834,
0.05512848496437073,
-0.035671867430210114,
-0.024684466421604156,
0.011419870890676975,
-0.04080495983362198,
0.030583787709474564,
-0.04307772219181061,
0.04723042994737625,
0.07642656564712524,
-0.0034868265502154827,
0.045713745057582855,
-0.1... | Chapter 4 The Adjustment Process
PA14.
4.4 Prepare an adjusted trial balance from the adjusted account balances; solve for the one missing
account balance: Cash (assume accounts have normal balances).
PA15.
4.4 Prepare an adjusted trial balance from the following account information, considering the
adjustment data provided (assume accounts have normal balances). Equipment was recently purchased, so
there is neither depreciation expense nor accumulated depreciation.
Adjustments needed:
• Salaries due to employees, but unpaid at the end of the period, $2,000
•
Insurance still unexpired at end of the period, $12,000
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
277
PA16.
4.4 Prepare an adjusted trial balance from the following account information, and also considering
the adjustment data provided (assume accounts have normal balances). Equipment was recently purchased, | {"uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "file_type": ".pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf"} |
234afe50-7d6d-47e3-a871-2268602260c3 | [
-0.01471633743494749,
0.08623659610748291,
0.04704515263438225,
-0.021547583863139153,
-0.021303996443748474,
0.04630069062113762,
0.03942883759737015,
0.024938752874732018,
0.03394553065299988,
0.028421787545084953,
0.08135220408439636,
-0.0326591357588768,
0.008462375029921532,
-0.093460... | the adjustment data provided (assume accounts have normal balances). Equipment was recently purchased,
so there is neither depreciation expense nor accumulated depreciation.
Adjustments needed:
• Remaining unpaid Salaries due to employees at the end of the period, $0
• Accrued Interest Payable at the end of the period, $7,700
PA17.
4.5 Using the following Company W information, prepare a Retained Earnings Statement.
• Retained earnings balance January 1, 2019, $43,500
• Net income for year 2019, $55,289
• Dividends declared and paid for year 2019, $18,000
PA18.
4.5 From the following Company Y adjusted trial balance, prepare simple financial statements, as
follows:
A.
Income Statement
B. Retained Earnings Statement
C. Balance Sheet
278
Chapter 4 The Adjustment Process
B Problem Set B
PB1.
4.1 Identify whether each of the following transactions, which are related to revenue recognition, are
accrual, deferral, or neither.
A. expense now, pay now | {"batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf"} |
d176662e-3c33-4967-ab36-bf663c5941a6 | [
-0.026405686512589455,
0.05620646849274635,
0.0011209381045773625,
-0.07090695947408676,
-0.05301295965909958,
0.023970777168869972,
0.09408725053071976,
0.022017518058419228,
0.018145224079489708,
0.03287307918071747,
0.05596505478024483,
-0.0891214907169342,
-0.0018476912518963218,
-0.00... | B Problem Set B
PB1.
4.1 Identify whether each of the following transactions, which are related to revenue recognition, are
accrual, deferral, or neither.
A. expense now, pay now
B. expense later, pay now
C. expense now, pay later
PB2.
4.1 To demonstrate the difference between cash account activity and accrual basis profits (net
income), note the amount each transaction affects cash and the amount each transaction affects net income.
A.
issued stock for cash $20,000
B. purchased supplies inventory on account $1,800
C. paid employee salaries; assume it was current day’s expenses $950
D. paid note payment to bank (principal only) $1,200
E.
collected balance on accounts receivable $4,750
PB3.
4.2 Identify which type of adjustment is indicated by these transactions. Choose accrued revenue,
accrued expense, deferred revenue, or deferred expense.
A.
B.
C.
D.
fees earned and billed, but not collected
recorded depreciation expense | {"file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
93d4c505-910b-4f74-947f-a50ff7a20684 | [
0.0004384233325254172,
0.03532100468873978,
0.008637454360723495,
0.03217361494898796,
-0.02605626732110977,
0.012535212561488152,
0.01939288154244423,
-0.012292499653995037,
0.04400215670466423,
0.059009481221437454,
0.041647132486104965,
-0.06614349782466888,
0.039181530475616455,
-0.057... | accrued expense, deferred revenue, or deferred expense.
A.
B.
C.
D.
fees earned and billed, but not collected
recorded depreciation expense
fees collected in advance of services
salaries owed but not yet paid
E. property rentals costs, prepaid for future months
F.
inventory purchased for cash
PB4.
4.2 Identify which type of adjustment is associated with this account, and what the other account is in
the adjustment. Choose accrued revenue, accrued expense, deferred revenue, or deferred expense.
A. Salaries Payable
B.
Interest Receivable
C. Unearned Fee Revenue
D. Prepaid Rent
PB5.
4.2 Indicate what impact the following adjustments have on the accounting equation: Assets =
Liabilities + Equity (assume normal balances).
Impact 1
Impact 2
Unearned Rent adjusted from $15,000 to $9,500
Recorded salaries payable of $3,750
Prepaid Rent adjusted from $6,000 to $4,000
Recorded depreciation expense of $5,500
A.
B.
C.
D.
Table 4.7 | {"uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)"} |
9b97219c-6522-4866-83fb-05c950055a60 | [
0.011724906973540783,
0.06958480179309845,
0.020232217386364937,
0.025237727910280228,
-0.045167963951826096,
0.056446369737386703,
-0.030985895544290543,
0.042095847427845,
-0.019753554835915565,
0.07804256677627563,
0.0216665156185627,
-0.02873975969851017,
0.06527681648731232,
-0.069737... | Unearned Rent adjusted from $15,000 to $9,500
Recorded salaries payable of $3,750
Prepaid Rent adjusted from $6,000 to $4,000
Recorded depreciation expense of $5,500
A.
B.
C.
D.
Table 4.7
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
279
PB6.
4.2 What two accounts are affected by each of these adjustments?
A.
recorded accrued interest on note payable
B. adjusted unearned rent to correct
C.
recorded depreciation for the year
D. adjusted salaries payable to correct
E.
sold merchandise to customers on account
PB7.
4.3 Using the following information,
A. Make the December 31 adjusting journal entry for depreciation.
B. Determine the net book value (NBV) of the asset on December 31.
• Cost of asset, $195,000
• Accumulated depreciation, beginning of year, $26,000
• Current year depreciation, $13,000
PB8. | {"producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055} |
3ea56140-134d-48dc-80b0-67b2a2d02997 | [
-0.04636756703257561,
0.07013899087905884,
-0.05872975289821625,
-0.01576690748333931,
-0.09301261603832245,
0.02625710517168045,
0.004189536906778812,
0.07017017155885696,
0.0024996905121952295,
0.06511304527521133,
0.00196642498485744,
-0.07453876733779907,
0.02061484567821026,
-0.034345... | B. Determine the net book value (NBV) of the asset on December 31.
• Cost of asset, $195,000
• Accumulated depreciation, beginning of year, $26,000
• Current year depreciation, $13,000
PB8.
4.3 Use the following account T-balances (assume normal balances) and correct balance information
to make the December 31 adjusting journal entries.
PB9.
4.3 Use the following account T-balances (assume normal balances) and correct balance information
to make the December 31 adjusting journal entries.
PB10.
4.3 Prepare journal entries to record the following transactions. Create a T-account for Supplies, post
any entries that affect the account, and tally ending balance for the account (assume Supplies beginning
balance of $6,550).
A.
January 26, purchased additional supplies for cash, $9,500
B. December 31, actual count of supplies, $8,500
PB11.
4.3 Prepare journal entries to record the following transactions. Create a T-account for Unearned | {"file_type": ".pdf", "file_size_mb": 156.7, "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
cbcd912d-d842-4bbb-9a24-6a51f1d97e04 | [
-0.018478212878108025,
0.09676826745271683,
-0.02853521704673767,
-0.029356203973293304,
-0.030282028019428253,
0.037472203373909,
0.03221211954951286,
0.0504620261490345,
0.006443466059863567,
0.07041839510202408,
0.05398370698094368,
-0.01826959103345871,
0.0435965396463871,
-0.081383019... | B. December 31, actual count of supplies, $8,500
PB11.
4.3 Prepare journal entries to record the following transactions. Create a T-account for Unearned
Revenue, post any entries that affect the account, tally ending balance for the account (assume Unearned
Revenue beginning balance of $12,500).
A. May 1, collected an advance payment from client, $15,000
B. December 31, remaining unearned advances, $7,500
280
Chapter 4 The Adjustment Process
PB12.
4.3 Determine the amount of cash expended for Insurance Premiums during the month, based on
the entries in the following accounts (assume 0 beginning balances).
PB13.
4.3 Prepare adjusting journal entries, as needed, considering the account balances excerpted from
the unadjusted trial balance and the adjustment data.
A. depreciation on buildings and equipment, $17,500
B. advertising still prepaid at year end, $2,200
C.
interest due on notes payable, $4,300
D. unearned rental revenue, $6,900
E. | {"uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_size_mb": 156.7, "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf"} |
e66bea13-5d29-41d5-a075-201cbfcb50b5 | [
0.01685488596558571,
0.08675328642129898,
0.05534611642360687,
-0.020517027005553246,
-0.022152479737997055,
0.027378328144550323,
-0.02675093710422516,
0.02225874364376068,
-0.00392979197204113,
0.05702314153313637,
0.07448334246873856,
-0.014725005254149437,
0.06790933012962341,
-0.06133... | A. depreciation on buildings and equipment, $17,500
B. advertising still prepaid at year end, $2,200
C.
interest due on notes payable, $4,300
D. unearned rental revenue, $6,900
E.
interest receivable on notes receivable, $1,200
PB14.
4.4 Prepare an adjusted trial balance from the adjusted account balances; solve for the one missing
account balance: Dividends (assume accounts have normal balances). Equipment was recently purchased, so
there is neither depreciation expense nor accumulated depreciation.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
281
PB15.
4.4 Prepare an adjusted trial balance from the following account information, considering the
adjustment data provided (assume accounts have normal balances). Building and Equipment were recently
purchased, so there is neither depreciation expense nor accumulated depreciation.
Adjustments needed: | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "file_type": ".pdf", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "file_name": "FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7} |
88c70576-3361-452d-bc60-7cc25f418c14 | [
0.01873074844479561,
0.09491883218288422,
0.02052532508969307,
0.026991449296474457,
-0.045334331691265106,
0.05121183395385742,
0.03678052872419357,
0.056771792471408844,
-0.007337901275604963,
0.0005770816933363676,
0.045574478805065155,
-0.036574821919202805,
0.029359055683016777,
-0.08... | purchased, so there is neither depreciation expense nor accumulated depreciation.
Adjustments needed:
• Physical count of supplies inventory remaining at end of period, $3,300
• Customer fees collected in advance (payments were recorded as Fees Earned), $18,500
PB16.
4.4 Prepare an adjusted trial balance from the following account information, and also considering
the adjustment data provided (assume accounts have normal balances).
Adjustments needed:
• Accrued interest revenue on investments at period end, $2,200
•
Insurance still unexpired at end of the period, $12,000
PB17.
4.5 Using the following Company X information, prepare a Retained Earnings Statement:
• Retained earnings balance January 1, 2019, $121,500
• Net income for year 2019, $145,800
• Dividends declared and paid for year 2019, $53,000
282
Chapter 4 The Adjustment Process
PB18.
4.5 From the following Company Z adjusted trial balance, prepare simple financial statements, as
follows:
A. | {"file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1"} |
cd219c65-31a8-4174-b06a-ab6c5c67bdfa | [
-0.04194019362330437,
0.0832316130399704,
0.038453154265880585,
-0.015509089455008507,
0.005932221654802561,
0.014796210452914238,
0.04266053065657616,
0.11336099356412888,
-0.0029615170788019896,
0.03421866521239281,
0.01115682628005743,
-0.024375755339860916,
-0.05516737326979637,
-0.054... | Chapter 4 The Adjustment Process
PB18.
4.5 From the following Company Z adjusted trial balance, prepare simple financial statements, as
follows:
A.
Income Statement
B. Retained Earnings Statement
C. Balance Sheet
Thought Provokers
TP1.
4.1 Assume you are the controller of a large corporation, and the chief executive officer (CEO) has
requested that you explain to them why the net income that you are reporting for the year is so low, when the
CEO knows for a fact that the cash accounts are much higher at the end of the year than they were at the
beginning of the year. Write a memo to the CEO to offer some possible explanations for the disparity between
financial statement net income and the change in cash during the year.
TP2.
4.2 Search the US Securities and Exchange Commission website (https://www.sec.gov/edgar/
searchedgar/companysearch.html), and locate the latest Form 10-K for a company you would like to analyze.
Submit a short memo: | {"creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)"} |
f8d24d1b-6a6a-49f2-9300-962a3cead6e7 | [
-0.06930093467235565,
0.08617712557315826,
-0.041724078357219696,
-0.004991819150745869,
-0.04847095534205437,
0.010629755444824696,
0.016461536288261414,
0.013640600256621838,
0.037483785301446915,
0.019586727023124695,
0.05488259717822075,
-0.08563457429409027,
-0.011304760351777077,
-0.... | searchedgar/companysearch.html), and locate the latest Form 10-K for a company you would like to analyze.
Submit a short memo:
• State the name and ticker symbol of the company you have chosen.
• Review the company’s end-of-period Balance Sheet for the most recent annual report, in search of
accruals and deferrals.
• List the name and account balance of at least four accounts that represent accruals or deferrals—these
could be accrued revenues, accrued expenses, deferred (unearned) revenues, or deferred (prepaid)
expenses.
• Provide the web link to the company’s Form 10-K, to allow accurate verification of your answers.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
283
TP3.
4.3 Search the web for instances of possible impropriety relating to earnings management. This could
be news reports, Securities and Exchange Commission violation reports, fraud charges, or any other source of | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "file_size_mb": 156.7, "total_pages": 1055, "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00"} |
d647090e-0af8-4c33-ab83-a5a73ebe27c4 | [
-0.027126917615532875,
0.09615286439657211,
0.04049704223871231,
0.04644126817584038,
-0.03772912546992302,
0.0058025578036904335,
0.058631036430597305,
0.04738446697592735,
0.07791746407747269,
0.009630945511162281,
0.04247963801026344,
-0.08143945783376694,
0.010579132474958897,
-0.08126... | be news reports, Securities and Exchange Commission violation reports, fraud charges, or any other source of
alleged financial statement judgement lapse.
• Write down the name and industry type of the company you are discussing.
• Describe the purported indiscretion, and how it relates to mis-reporting earnings or shady accounting.
• Estimate the impact of the potential misrepresented amount.
• Note: You do not have to have proof that a compromise occurred, but you do need to have a source of
your reporting of the potential trouble.
• Provide the web link to the information you found, to allow accurate verification of your answers.
TP4.
4.4 Assume you are employed as the chief financial officer of a corporation and are responsible for
preparation of the financial statements, including the adjusting process and preparation of the adjusted trial
balance. The company is facing a slow year, and after your adjusting entries, the financial statements are | {"batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf"} |
588b8f12-6bab-48ae-b52f-71c7d34f4851 | [
0.04228924587368965,
0.08141937106847763,
0.09509971737861633,
0.022789543494582176,
-0.0027341146487742662,
-0.025343483313918114,
-0.07232861965894699,
0.02566966786980629,
0.016242150217294693,
-0.003728098003193736,
-0.04067428782582283,
0.00651635741814971,
-0.10835545510053635,
-0.12... | balance. The company is facing a slow year, and after your adjusting entries, the financial statements are
accurately reflecting that fact. However, as you are discussing the matter with your boss, the chief executive
officer (CEO), he suggests that you have the power to make further adjustments to the statements, and that
you should use that power to “adjust” the profits and equity into a stronger position, so that investor
confidence in the company’s prospects will be restored.
Write a short memo to the CEO, stating your intentions about what you can and/or will do to make the
financial statements more appealing. Be specific about any planned adjustments that could be made,
assuming that normal period-end adjustments have already been reflected accurately in the financial
statements that you prepared.
TP5.
4.5 Search the SEC website (https://www.sec.gov/edgar/searchedgar/companysearch.html) and | {"file_type": ".pdf", "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
72d39c0c-44e0-419c-83da-46490bbe1f0e | [
-0.052672188729047775,
0.10642474889755249,
-0.014703997410833836,
-0.02849765680730343,
-0.044416047632694244,
0.06065523624420166,
-0.004877285100519657,
0.04057135432958603,
-0.03295145183801651,
0.020310165360569954,
0.04022417962551117,
-0.0380999930202961,
-0.017833305522799492,
-0.1... | statements that you prepared.
TP5.
4.5 Search the SEC website (https://www.sec.gov/edgar/searchedgar/companysearch.html) and
locate the latest Form 10-K for a company you would like to analyze. Submit a short memo:
• State the name and ticker symbol of the company you have chosen.
• Review the company’s end-of-period Balance Sheet, Income Statement, and Statement of Retained
Earnings.
• Reconstruct an adjusted trial balance for the company, from the information presented in the three
specified financial statements.
• Provide the web link to the company’s Form 10-K, to allow accurate verification of your answers.
284
Chapter 4 The Adjustment Process
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
5
Completing the Accounting Cycle
Figure 5.1 Mark reviews the financial data from Supreme Cleaners. (credit left: modification of “Numbers and | {"batch_upload": true, "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
364b0c3c-de37-4eba-89d5-46a2cca65e52 | [
-0.029039012268185616,
-0.00982513278722763,
0.038506124168634415,
-0.004036133177578449,
0.045388735830783844,
0.01587863638997078,
0.04926009476184845,
0.00042981881415471435,
-0.023825526237487793,
0.004014179110527039,
0.023039313033223152,
0.009430627338588238,
-0.0027911304496228695,
... | Completing the Accounting Cycle
Figure 5.1 Mark reviews the financial data from Supreme Cleaners. (credit left: modification of “Numbers and
Finance” by “reynermedia”/Flickr, CC BY 2.0; credit right: modification of “Dry cleaned clothes (Unsplash)” by
“m0851”/Wikimedia Commons, CC0)
Chapter Outline
5.1 Describe and Prepare Closing Entries for a Business
5.2 Prepare a Post-Closing Trial Balance
5.3 Apply the Results from the Adjusted Trial Balance to Compute Current Ratio and Working Capital
Balance, and Explain How These Measures Represent Liquidity
5.4 Appendix: Complete a Comprehensive Accounting Cycle for a Business
Why It Matters
As we learned in Analyzing and Recording Transactions and The Adjustment Process, Mark Summers has
started his own dry-cleaning business called Supreme Cleaners. Mark had a busy first month of operations,
including purchasing equipment and supplies, paying his employees, and providing dry-cleaning services to | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "batch_upload": true, "file_size_mb": 156.7, "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00"} |
a47dea2f-2b61-4951-a8b9-b75d16853c0b | [
-0.001298397546634078,
-0.027438940480351448,
0.02322804369032383,
-0.021431725472211838,
-0.056987177580595016,
0.0014809982385486364,
0.028689898550510406,
-0.019972510635852814,
-0.0482538640499115,
0.005004927050322294,
0.03188258782029152,
-0.012991226278245449,
-0.03823282942175865,
... | including purchasing equipment and supplies, paying his employees, and providing dry-cleaning services to
customers. Because Mark had established a sound accounting system to keep track of his daily transactions,
he was able to prepare complete and accurate financial statements showing his company’s progress and
financial position.
In order to move forward, Mark needs to review how financial data from his first month of operations
transitions into his second month of operations. It is important for Mark to make a smooth transition so he
can compare the financials from month to month, and continue on the right path toward growth. It will also
assure his investors and lenders that the company is operating as expected. So what does he need to do to
prepare for next month?
286
Chapter 5 Completing the Accounting Cycle
5.1 Describe and Prepare Closing Entries for a Business | {"batch_upload": true, "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_size_mb": 156.7, "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00"} |
d0e82fc1-e04d-457e-8520-055d898ba3e4 | [
0.011025285348296165,
0.042220767587423325,
0.008053207769989967,
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0.06951754540205002,
-0.0021482028532773256,
0.0058035822585225105,
-0.0198681503534317,
-... | prepare for next month?
286
Chapter 5 Completing the Accounting Cycle
5.1 Describe and Prepare Closing Entries for a Business
In this chapter, we complete the final steps (steps 8 and 9) of the accounting cycle, the closing process. You will
notice that we do not cover step 10, reversing entries. This is an optional step in the accounting cycle that you
will learn about in future courses. Steps 1 through 4 were covered in Analyzing and Recording Transactions
and Steps 5 through 7 were covered in The Adjustment Process.
Our discussion here begins with journalizing and posting the closing entries (Figure 5.2). These posted entries
will then translate into a post-closing trial balance, which is a trial balance that is prepared after all of the
closing entries have been recorded.
Figure 5.2
Final steps in the accounting cycle. (attribution: Copyright Rice University, OpenStax, under CC
BY-NC-SA 4.0 license) | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "batch_upload": true, "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7} |
e7892930-21b4-4c8b-91db-e8ef4a3be744 | [
0.010842796415090561,
0.03028002940118313,
-0.004606645554304123,
-0.08117325603961945,
-0.015294149518013,
0.019777409732341766,
0.03632344305515289,
0.020537249743938446,
0.036935996264219284,
0.05893757566809654,
-0.015376579947769642,
-0.03003123216331005,
-0.015578456223011017,
-0.058... | closing entries have been recorded.
Figure 5.2
Final steps in the accounting cycle. (attribution: Copyright Rice University, OpenStax, under CC
BY-NC-SA 4.0 license)
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
287
T H I N K I T T H R O U G H
Should You Compromise to Please Your Supervisor?
You are an accountant for a small event-planning business. The business has been operating for several
years but does not have the resources for accounting software. This means you are preparing all steps in
the accounting cycle by hand.
It is the end of the month, and you have completed the post-closing trial balance. You notice that there is
still a service revenue account balance listed on this trial balance. Why is it considered an error to have a
revenue account on the post-closing trial balance? How do you fix this error?
Introduction to the Closing Entries | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting"} |
633f93b6-8539-49f3-a1cd-de8d77b21c0b | [
0.0016120114596560597,
0.05200090631842613,
-0.03261281177401543,
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0.03124920092523098,
0.01145205833017826,
0.04954002425074577,
0.037980541586875916,
0.00880760420113802,
0.0018363199196755886,
-0.020565183833241463,
-0.10... | revenue account on the post-closing trial balance? How do you fix this error?
Introduction to the Closing Entries
Companies are required to close their books at the end of each fiscal year so that they can prepare their
annual financial statements and tax returns. However, most companies prepare monthly financial statements
and close their books annually, so they have a clear picture of company performance during the year, and give
users timely information to make decisions.
Closing entries prepare a company for the next accounting period by clearing any outstanding balances in
certain accounts that should not transfer over to the next period. Closing, or clearing the balances, means
returning the account to a zero balance. Having a zero balance in these accounts is important so a company
can compare performance across periods, particularly with income. It also helps the company keep thorough | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00"} |
c383e4e1-42be-47bd-9f53-bfa000f42695 | [
-0.0615430623292923,
0.03338479995727539,
-0.05544019863009453,
-0.023288145661354065,
-0.013608849607408047,
0.020325081422924995,
0.03999607637524605,
-0.025751005858182907,
0.11428037285804749,
0.02247384376823902,
0.05505405366420746,
0.032437700778245926,
-0.029142465442419052,
-0.048... | can compare performance across periods, particularly with income. It also helps the company keep thorough
records of account balances affecting retained earnings. Revenue, expense, and dividend accounts affect
retained earnings and are closed so they can accumulate new balances in the next period, which is an
application of the time period assumption.
To further clarify this concept, balances are closed to assure all revenues and expenses are recorded in the
proper period and then start over the following period. The revenue and expense accounts should start at zero
each period, because we are measuring how much revenue is earned and expenses incurred during the
period. However, the cash balances, as well as the other balance sheet accounts, are carried over from the end
of a current period to the beginning of the next period.
For example, a store has an inventory account balance of $100,000. If the store closed at 11:59 p.m. on January | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
caeeee9e-723f-43b0-a4e6-6995162ccd2a | [
-0.03237500041723251,
0.06872384995222092,
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0.004493359010666609,
-0.05928227677941322,
0.06058090180158615,
-0.010619803331792355,
0.011847900226712227,
0.06229470670223236,
0.03243180736899376,
0.04181535169482231,
-0.03580106794834137,
-0.05505988374352455,
-0.0598... | of a current period to the beginning of the next period.
For example, a store has an inventory account balance of $100,000. If the store closed at 11:59 p.m. on January
31, 2019, then the inventory balance when it reopened at 12:01 a.m. on February 1, 2019, would still be
$100,000. The balance sheet accounts, such as inventory, would carry over into the next period, in this case
February 2019.
The accounts that need to start with a clean or $0 balance going into the next accounting period are revenue,
income, and any dividends from January 2019. To determine the income (profit or loss) from the month of
January, the store needs to close the income statement information from January 2019. Zeroing January 2019
would then enable the store to calculate the income (profit or loss) for the next month (February 2019),
instead of merging it into January’s income and thus providing invalid information solely for the month of
February. | {"uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "total_pages": 1055, "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting"} |
15195bc2-0aa3-4178-9944-20934cdfd780 | [
-0.00517409760504961,
0.04893405735492706,
-0.01582108438014984,
0.05930821970105171,
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-0.023453738540410995,
-0.018825391307473183,
0.03654220327734947,
0.03501647338271141,
0.04585706815123558,
0.05647861957550049,
-0.004147710744291544,
-0.082... | instead of merging it into January’s income and thus providing invalid information solely for the month of
February.
However, if the company also wanted to keep year-to-date information from month to month, a separate set
of records could be kept as the company progresses through the remaining months in the year. For our
purposes, assume that we are closing the books at the end of each month unless otherwise noted.
288
Chapter 5 Completing the Accounting Cycle
Let’s look at another example to illustrate the point. Assume you own a small landscaping business. It is the
end of the year, December 31, 2018, and you are reviewing your financials for the entire year. You see that you
earned $120,000 this year in revenue and had expenses for rent, electricity, cable, internet, gas, and food that
totaled $70,000.
You also review the following information:
The next day, January 1, 2019, you get ready for work, but before you go to the office, you decide to review | {"total_pages": 1055, "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
c254320c-769a-4c8b-a56c-b6b5b95235ba | [
0.040056098252534866,
0.037986353039741516,
0.0015966331120580435,
0.051788732409477234,
0.012425744906067848,
0.0165056511759758,
0.044129740446805954,
0.011186543852090836,
-0.05552614480257034,
-0.004169831983745098,
0.028508082032203674,
-0.12726722657680511,
-0.005054874811321497,
-0.... | totaled $70,000.
You also review the following information:
The next day, January 1, 2019, you get ready for work, but before you go to the office, you decide to review
your financials for 2019. What are your year-to-date earnings? So far, you have not worked at all in the current
year. What are your total expenses for rent, electricity, cable and internet, gas, and food for the current year?
You have also not incurred any expenses yet for rent, electricity, cable, internet, gas or food. This means that
the current balance of these accounts is zero, because they were closed on December 31, 2018, to complete
the annual accounting period.
Next, you review your assets and liabilities. What is your current bank account balance? What is the current
book value of your electronics, car, and furniture? What about your credit card balances and bank loans? Are
the value of your assets and liabilities now zero because of the start of a new year? Your car, electronics, and | {"upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "total_pages": 1055, "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf"} |
88e10f31-887b-4dd0-b925-dae561dd50ab | [
-0.013493834063410759,
0.003277182811871171,
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-0.033006686717271805,
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0.013800371438264847,
-0.04092423990368843,
0.10302790254354477,
0.0029699348378926516,
0.09236510097980499,
0.007246044464409351,
-0.009091179817914963,
-... | the value of your assets and liabilities now zero because of the start of a new year? Your car, electronics, and
furniture did not suddenly lose all their value, and unfortunately, you still have outstanding debt. Therefore,
these accounts still have a balance in the new year, because they are not closed, and the balances are carried
forward from December 31 to January 1 to start the new annual accounting period.
This is no different from what will happen to a company at the end of an accounting period. A company will
see its revenue and expense accounts set back to zero, but its assets and liabilities will maintain a balance.
Stockholders’ equity accounts will also maintain their balances. In summary, the accountant resets the
temporary accounts to zero by transferring the balances to permanent accounts.
L I N K T O L E A R N I N G
Understanding the accounting cycle and preparing trial balances is a practice valued internationally. The | {"creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "batch_upload": true} |
79ec60fa-52fe-42ac-9d99-dc74760ed65c | [
0.024902567267417908,
0.012145588174462318,
-0.057261522859334946,
-0.019419586285948753,
-0.0283681508153677,
0.0009107723017223179,
-0.009927102364599705,
0.017522094771265984,
0.08988936990499496,
0.05144742131233215,
0.08066604286432266,
-0.004437475930899382,
-0.06690879166126251,
-0.... | L I N K T O L E A R N I N G
Understanding the accounting cycle and preparing trial balances is a practice valued internationally. The
Philippines Center for Entrepreneurship and the government of the Philippines hold regular seminars
going over this cycle with small business owners. They are also transparent with their internal trial
balances in several key government offices. Check out this article talking about the seminars on the
accounting cycle (https://openstax.org/l/50PhilAcctSem) and this public pre-closing trial balance
(https://openstax.org/l/50PhilTrialBal) presented by the Philippines Department of Health.
Temporary and Permanent Accounts
All accounts can be classified as either permanent (real) or temporary (nominal) (Figure 5.3).
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
289 | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_size_mb": 156.7, "total_pages": 1055, "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
001457cb-2ea6-41ae-a74a-ba766ae4ffd4 | [
0.0017845401307567954,
-0.011830422095954418,
-0.051365625113248825,
0.007601921912282705,
-0.02340855821967125,
0.023494713008403778,
0.03966227546334267,
-0.03213648498058319,
0.0830741822719574,
0.028869107365608215,
0.06781507283449173,
-0.022221704944968224,
-0.03467433154582977,
-0.0... | This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
289
Permanent (real) accounts are accounts that transfer balances to the next period and include balance sheet
accounts, such as assets, liabilities, and stockholders’ equity. These accounts will not be set back to zero at the
beginning of the next period; they will keep their balances. Permanent accounts are not part of the closing
process.
Temporary (nominal) accounts are accounts that are closed at the end of each accounting period, and
include income statement, dividends, and income summary accounts. The new account, Income Summary, will
be discussed shortly. These accounts are temporary because they keep their balances during the current
accounting period and are set back to zero when the period ends. Revenue and expense accounts are closed
to Income Summary, and Income Summary and Dividends are closed to the permanent account, Retained
Earnings. | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "uploaded_via": "batch_uploader", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
ccb2157c-f1d4-46cc-932e-e327f9a1bdee | [
0.02074822038412094,
0.053535379469394684,
-0.04751693084836006,
0.021716997027397156,
0.044834673404693604,
0.05890066176652908,
0.06002366915345192,
0.017041534185409546,
0.12171334028244019,
-0.0018920829752460122,
0.043041620403528214,
-0.03854012489318848,
-0.020326094701886177,
-0.07... | to Income Summary, and Income Summary and Dividends are closed to the permanent account, Retained
Earnings.
Figure 5.3
Location Chart for Financial Statement Accounts. (attribution: Copyright Rice University,
OpenStax, under CC BY-NC-SA 4.0 license)
The income summary account is an intermediary between revenues and expenses, and the Retained Earnings
account. It stores all of the closing information for revenues and expenses, resulting in a “summary” of
income or loss for the period. The balance in the Income Summary account equals the net income or loss for
the period. This balance is then transferred to the Retained Earnings account.
Income summary is a nondefined account category. This means that it is not an asset, liability, stockholders’
equity, revenue, or expense account. The account has a zero balance throughout the entire accounting period
until the closing entries are prepared. Therefore, it will not appear on any trial balances, including the adjusted | {"file_size_mb": 156.7, "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)"} |
a1c7726a-8679-4273-b24d-7ba17ca9fec5 | [
0.020032284781336784,
0.0640575960278511,
-0.008786783553659916,
-0.007048610597848892,
0.0198542270809412,
0.027570758014917374,
0.05911695584654808,
0.006097567733377218,
0.08432567119598389,
0.023843349888920784,
0.025741340592503548,
-0.03350690379738808,
-0.009585516527295113,
-0.0813... | until the closing entries are prepared. Therefore, it will not appear on any trial balances, including the adjusted
trial balance, and will not appear on any of the financial statements.
You might be asking yourself, “is the Income Summary account even necessary?” Could we just close out
revenues and expenses directly into retained earnings and not have this extra temporary account? We could
do this, but by having the Income Summary account, you get a balance for net income a second time. This
gives you the balance to compare to the income statement, and allows you to double check that all income
statement accounts are closed and have correct amounts. If you put the revenues and expenses directly into
retained earnings, you will not see that check figure. No matter which way you choose to close, the same final
balance is in retained earnings.
290
Chapter 5 Completing the Accounting Cycle
Y O U R T U R N
Permanent versus Temporary Accounts | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00"} |
b074b778-bd65-42d6-924e-2a6eee03c0fc | [
0.014022494666278362,
0.071865513920784,
-0.032751355320215225,
-0.019067713990807533,
0.003362937830388546,
0.028489693999290466,
0.05839899182319641,
0.0032415285240858793,
0.04112502932548523,
0.05258437991142273,
0.020085105672478676,
-0.010490347631275654,
0.01673179492354393,
-0.0696... | balance is in retained earnings.
290
Chapter 5 Completing the Accounting Cycle
Y O U R T U R N
Permanent versus Temporary Accounts
Following is a list of accounts. State whether each account is a permanent or temporary account.
A.
rent expense
B. unearned revenue
C. accumulated depreciation, vehicle
D. common stock
E.
fees revenue
F. dividends
G. prepaid insurance
H. accounts payable
Solution
A, E, and F are temporary; B, C, D, G, and H are permanent.
Let’s now look at how to prepare closing entries.
Journalizing and Posting Closing Entries
The eighth step in the accounting cycle is preparing closing entries, which includes journalizing and posting
the entries to the ledger.
Four entries occur during the closing process. The first entry closes revenue accounts to the Income Summary
account. The second entry closes expense accounts to the Income Summary account. The third entry closes | {"creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529", "batch_upload": true, "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00"} |
aebb09d9-aac6-469a-a190-284928f00bc1 | [
0.016611404716968536,
0.06910853087902069,
-0.0397433340549469,
-0.004594205413013697,
0.02995387651026249,
0.0579398050904274,
0.008704891428351402,
0.005595334805548191,
0.004869263619184494,
0.03244230896234512,
0.056462787091732025,
0.013533184304833412,
-0.001470342162065208,
-0.11649... | account. The second entry closes expense accounts to the Income Summary account. The third entry closes
the Income Summary account to Retained Earnings. The fourth entry closes the Dividends account to Retained
Earnings. The information needed to prepare closing entries comes from the adjusted trial balance.
Let’s explore each entry in more detail using Printing Plus’s information from Analyzing and Recording
Transactions and The Adjustment Process as our example. The Printing Plus adjusted trial balance for January
31, 2019, is presented in Figure 5.4.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
291
Figure 5.4
Adjusted Trial Balance for Printing Plus. (attribution: Copyright Rice University, OpenStax, under
CC BY-NC-SA 4.0 license)
The first entry requires revenue accounts close to the Income Summary account. To get a zero balance in a | {"uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
df96e261-1436-4b07-9500-d4fe8ce10482 | [
-0.03392370790243149,
0.03232152387499809,
-0.09111477434635162,
-0.042109165340662,
-0.025722678750753403,
0.015416227281093597,
0.04323970153927803,
0.03794913738965988,
0.014952638186514378,
0.06583593040704727,
0.011342945508658886,
-0.0773986354470253,
0.00984794832766056,
-0.04575262... | CC BY-NC-SA 4.0 license)
The first entry requires revenue accounts close to the Income Summary account. To get a zero balance in a
revenue account, the entry will show a debit to revenues and a credit to Income Summary. Printing Plus has
$140 of interest revenue and $10,100 of service revenue, each with a credit balance on the adjusted trial
balance. The closing entry will debit both interest revenue and service revenue, and credit Income Summary.
The T-accounts after this closing entry would look like the following.
292
Chapter 5 Completing the Accounting Cycle
Notice that the balances in interest revenue and service revenue are now zero and are ready to accumulate
revenues in the next period. The Income Summary account has a credit balance of $10,240 (the revenue sum).
The second entry requires expense accounts close to the Income Summary account. To get a zero balance in | {"file_type": ".pdf", "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00"} |
c44904a3-6f18-4505-83a9-3726fdabce89 | [
-0.03663325309753418,
0.053914088755846024,
-0.01505529135465622,
-0.025291774421930313,
0.012967153452336788,
-0.004108642227947712,
0.03135661035776138,
0.025480281561613083,
0.00931242760270834,
0.022938113659620285,
0.035051677376031876,
-0.08729866147041321,
-0.0010552604217082262,
-0... | The second entry requires expense accounts close to the Income Summary account. To get a zero balance in
an expense account, the entry will show a credit to expenses and a debit to Income Summary. Printing Plus
has $100 of supplies expense, $75 of depreciation expense–equipment, $5,100 of salaries expense, and $300 of
utility expense, each with a debit balance on the adjusted trial balance. The closing entry will credit Supplies
Expense, Depreciation Expense–Equipment, Salaries Expense, and Utility Expense, and debit Income Summary.
The T-accounts after this closing entry would look like the following.
Notice that the balances in the expense accounts are now zero and are ready to accumulate expenses in the
next period. The Income Summary account has a new credit balance of $4,665, which is the difference between
revenues and expenses (Figure 5.5). The balance in Income Summary is the same figure as what is reported on
Printing Plus’s Income Statement. | {"file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "uploaded_via": "batch_uploader"} |
ae4b7d99-0af8-4ab2-ab9b-0fea724dc201 | [
-0.01844310574233532,
0.05137602984905243,
-0.005936716217547655,
-0.02120388299226761,
0.01218442153185606,
0.0006013248930685222,
0.0292656347155571,
-0.0006546542863361537,
0.040559202432632446,
-0.013868932612240314,
0.05468933284282684,
-0.09058850258588791,
0.03116864152252674,
-0.04... | revenues and expenses (Figure 5.5). The balance in Income Summary is the same figure as what is reported on
Printing Plus’s Income Statement.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
293
Figure 5.5
Income Statement for Printing Plus. (attribution: Copyright Rice University, OpenStax, under CC
BY-NC-SA 4.0 license)
Why are these two figures the same? The income statement summarizes your income, as does income
summary. If both summarize your income in the same period, then they must be equal. If they do not match,
then you have an error.
The third entry requires Income Summary to close to the Retained Earnings account. To get a zero balance in
the Income Summary account, there are guidelines to consider.
•
•
If the balance in Income Summary before closing is a credit balance, you will debit Income Summary and | {"batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019-04-24T10:32:54-05:00"} |
eb6b4734-9c8d-4f15-a96e-ba619720d287 | [
-0.024431534111499786,
0.033640142530202866,
-0.00549537967890501,
-0.037825025618076324,
0.011595483869314194,
0.05855737254023552,
0.03494101017713547,
0.04997694492340088,
0.04666857421398163,
-0.012170981615781784,
0.042794644832611084,
-0.03517136350274086,
-0.03344317898154259,
-0.06... | the Income Summary account, there are guidelines to consider.
•
•
If the balance in Income Summary before closing is a credit balance, you will debit Income Summary and
credit Retained Earnings in the closing entry. This situation occurs when a company has a net income.
If the balance in Income Summary before closing is a debit balance, you will credit Income Summary and
debit Retained Earnings in the closing entry. This situation occurs when a company has a net loss.
Remember that net income will increase retained earnings, and a net loss will decrease retained earnings. The
Retained Earnings account increases on the credit side and decreases on the debit side.
Printing Plus has a $4,665 credit balance in its Income Summary account before closing, so it will debit Income
Summary and credit Retained Earnings.
The T-accounts after this closing entry would look like the following. | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "batch_upload": true, "file_type": ".pdf", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
d61a475c-404c-4dca-9a36-82b260ea9373 | [
-0.01568610966205597,
0.04981349781155586,
0.012163379229605198,
-0.0010195604991167784,
0.027536960318684578,
0.016622260212898254,
0.051134899258613586,
-0.015921706333756447,
0.11850114166736603,
0.01985149458050728,
0.09300108999013901,
-0.037424273788928986,
-0.02580944448709488,
-0.0... | Summary and credit Retained Earnings.
The T-accounts after this closing entry would look like the following.
Notice that the Income Summary account is now zero and is ready for use in the next period. The Retained
Earnings account balance is currently a credit of $4,665.
294
Chapter 5 Completing the Accounting Cycle
The fourth entry requires Dividends to close to the Retained Earnings account. Remember from your past
studies that dividends are not expenses, such as salaries paid to your employees or staff. Instead, declaring
and paying dividends is a method utilized by corporations to return part of the profits generated by the
company to the owners of the company—in this case, its shareholders.
If dividends were not declared, closing entries would cease at this point. If dividends are declared, to get a zero
balance in the Dividends account, the entry will show a credit to Dividends and a debit to Retained Earnings. As | {"total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_type": ".pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader"} |
d239f4c0-1fcd-435c-9f5f-977dc731c4e5 | [
-0.031526051461696625,
0.05315606668591499,
0.014737102203071117,
-0.02289436012506485,
0.04646354541182518,
0.03576606139540672,
0.05573808029294014,
0.02805083431303501,
0.06039348244667053,
0.03044082224369049,
0.05772344022989273,
-0.031494028866291046,
-0.036292996257543564,
-0.079945... | balance in the Dividends account, the entry will show a credit to Dividends and a debit to Retained Earnings. As
you will learn in Corporation Accounting, there are three components to the declaration and payment of
dividends. The first part is the date of declaration, which creates the obligation or liability to pay the dividend.
The second part is the date of record that determines who receives the dividends, and the third part is the date
of payment, which is the date that payments are made. Printing Plus has $100 of dividends with a debit
balance on the adjusted trial balance. The closing entry will credit Dividends and debit Retained Earnings.
The T-accounts after this closing entry would look like the following.
Why was income summary not used in the dividends closing entry? Dividends are not an income statement
account. Only income statement accounts help us summarize income, so only income statement accounts
should go into income summary. | {"creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "batch_upload": true, "file_type": ".pdf", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader"} |
490b203c-3693-4277-849f-30694fc09e61 | [
0.008168148808181286,
0.075050950050354,
0.014496134594082832,
0.013808658346533775,
0.03802815079689026,
0.03907300904393196,
0.05007622763514519,
0.0261683389544487,
0.07718535512685776,
-0.0017045092536136508,
0.055379725992679596,
-0.02543538250029087,
-0.026444971561431885,
-0.0671584... | account. Only income statement accounts help us summarize income, so only income statement accounts
should go into income summary.
Remember, dividends are a contra stockholders’ equity account. It is contra to retained earnings. If we pay out
dividends, it means retained earnings decreases. Retained earnings decreases on the debit side. The
remaining balance in Retained Earnings is $4,565 (Figure 5.6). This is the same figure found on the statement
of retained earnings.
Figure 5.6
Statement of Retained Earnings for Printing Plus. (attribution: Copyright Rice University,
OpenStax, under CC BY-NC-SA 4.0 license)
The statement of retained earnings shows the period-ending retained earnings after the closing entries have
been posted. When you compare the retained earnings ledger (T-account) to the statement of retained
earnings, the figures must match. It is important to understand retained earnings is not closed out, it is only | {"file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529"} |
81129d92-9677-4dd4-9daa-fe610076e0f1 | [
0.016106603667140007,
0.06498389691114426,
-0.01268775574862957,
0.004183979704976082,
0.008271358907222748,
0.04779045656323433,
0.08133503794670105,
-0.00958200078457594,
0.04811655357480049,
0.02667704038321972,
0.08352291584014893,
-0.015340521931648254,
-0.01349717378616333,
-0.048514... | earnings, the figures must match. It is important to understand retained earnings is not closed out, it is only
updated. Retained Earnings is the only account that appears in the closing entries that does not close. You
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
295
should recall from your previous material that retained earnings are the earnings retained by the company
over time—not cash flow but earnings. Now that we have closed the temporary accounts, let’s review what the
post-closing ledger (T-accounts) looks like for Printing Plus.
T-Account Summary
The T-account summary for Printing Plus after closing entries are journalized is presented in Figure 5.7.
296
Chapter 5 Completing the Accounting Cycle
Figure 5.7
T-Account Summary. (attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0
license) | {"upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)"} |
6c687220-7144-440f-8f49-17168ba44b6a | [
0.011183184571564198,
0.02391033060848713,
-0.007911838591098785,
-0.038299281150102615,
0.0038417296018451452,
0.0003792366187553853,
0.007867286913096905,
0.040722791105508804,
0.06657835841178894,
0.03803952783346176,
0.014222915284335613,
-0.03683462366461754,
-0.0024083727039396763,
-... | Chapter 5 Completing the Accounting Cycle
Figure 5.7
T-Account Summary. (attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0
license)
Notice that revenues, expenses, dividends, and income summary all have zero balances. Retained earnings
maintains a $4,565 credit balance. The post-closing T-accounts will be transferred to the post-closing trial
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
297
balance, which is step 9 in the accounting cycle.
T H I N K I T T H R O U G H
Closing Entries
A company has revenue of $48,000 and total expenses of $52,000. What would the third closing entry be?
Why?
Y O U R T U R N
Frasker Corp. Closing Entries
Prepare the closing entries for Frasker Corp. using the adjusted trial balance provided.
Solution
298
Chapter 5 Completing the Accounting Cycle
5.2 Prepare a Post-Closing Trial Balance | {"creator": "DocBook XSL Stylesheets V1.79.1", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader"} |
69b86943-2309-4680-a931-755a74bad2f2 | [
-0.08734485507011414,
0.01745963655412197,
-0.01610800065100193,
-0.06569854170084,
-0.012900310568511486,
-0.019083373248577118,
-0.07320675253868103,
0.025510266423225403,
0.04219382628798485,
0.05643216148018837,
0.010057798586785793,
-0.056211184710264206,
-0.05790403485298157,
-0.1085... | Prepare the closing entries for Frasker Corp. using the adjusted trial balance provided.
Solution
298
Chapter 5 Completing the Accounting Cycle
5.2 Prepare a Post-Closing Trial Balance
The ninth, and typically final, step of the process is to prepare a post-closing trial balance. The word “post” in
this instance means “after.” You are preparing a trial balance after the closing entries are complete.
Like all trial balances, the post-closing trial balance has the job of verifying that the debit and credit totals are
equal. The post-closing trial balance has one additional job that the other trial balances do not have. The post-
closing trial balance is also used to double-check that the only accounts with balances after the closing entries
are permanent accounts. If there are any temporary accounts on this trial balance, you would know that there
was an error in the closing process. This error must be fixed before starting the new period. | {"upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1"} |
36fd6cce-ce96-4def-b4e0-b7926a931c3e | [
-0.01040768064558506,
0.033219464123249054,
-0.025666575878858566,
-0.05318731814622879,
-0.021324846893548965,
0.001816852600313723,
-0.012810872867703438,
0.02917024865746498,
-0.0013363913167268038,
0.08048322796821594,
0.08544637262821198,
-0.023205194622278214,
-0.013928413391113281,
... | was an error in the closing process. This error must be fixed before starting the new period.
The process of preparing the post-closing trial balance is the same as you have done when preparing the
unadjusted trial balance and adjusted trial balance. Only permanent account balances should appear on the
post-closing trial balance. These balances in post-closing T-accounts are transferred over to either the debit or
credit column on the post-closing trial balance. When all accounts have been recorded, total each column and
verify the columns equal each other.
The post-closing trial balance for Printing Plus is shown in Figure 5.8.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
299
Figure 5.8
Printing Plus’s Post-Closing Trial Balance. (attribution: Copyright Rice University, OpenStax, under
CC BY-NC-SA 4.0 license) | {"moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1"} |
fbba77f7-1e7c-4771-a8a4-665fb7be3483 | [
-0.011535354889929295,
0.03163253888487816,
-0.008758164010941982,
0.00792618002742529,
0.0170406773686409,
0.03774452582001686,
-0.0007044413941912353,
-0.014151598326861858,
0.06503389030694962,
0.045706506818532944,
0.0993536189198494,
0.030554555356502533,
-0.026479436084628105,
-0.121... | 299
Figure 5.8
Printing Plus’s Post-Closing Trial Balance. (attribution: Copyright Rice University, OpenStax, under
CC BY-NC-SA 4.0 license)
Notice that only permanent accounts are included. All temporary accounts with zero balances were left out of
this statement. Unlike previous trial balances, the retained earnings figure is included, which was obtained
through the closing process.
At this point, the accounting cycle is complete, and the company can begin a new cycle in the next period. In
essence, the company’s business is always in operation, while the accounting cycle utilizes the cutoff of
month-end to provide financial information to assist and review the operations.
It is worth mentioning that there is one step in the process that a company may or may not include, step 10,
reversing entries. Reversing entries reverse an adjusting entry made in a prior period at the start of a new | {"producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf"} |
039a2b23-2699-4f91-b93f-c75c8f4ebf2b | [
-0.009027074091136456,
0.06060945242643356,
0.046473078429698944,
0.0038606661837548018,
-0.05718514695763588,
0.05825698748230934,
0.011314122937619686,
-0.010901737958192825,
-0.008787473663687706,
0.08549787104129791,
-0.02946392074227333,
0.028363440185785294,
0.004338901489973068,
-0.... | reversing entries. Reversing entries reverse an adjusting entry made in a prior period at the start of a new
period. We do not cover reversing entries in this chapter, but you might approach the subject in future
accounting courses.
Now that we have completed the accounting cycle, let’s take a look at another way the adjusted trial balance
assists users of information with financial decision-making.
L I N K T O L E A R N I N G
If you like quizzes, crossword puzzles, fill-in-the-blank, matching exercise, and word scrambles to help
you learn the material in this course, go to My Accounting Course (https://openstax.org/l/
50MyAcctCourse) for more. This website covers a variety of accounting topics including financial
accounting basics, accounting principles, the accounting cycle, and financial statements, all topics
introduced in the early part of this course.
300
Chapter 5 Completing the Accounting Cycle
C O N C E P T S I N P R A C T I C E | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1"} |
a0eefb89-0dc5-4c60-b788-c2f7f248ced4 | [
-0.014566692523658276,
0.053480230271816254,
-0.016849316656589508,
-0.04046843573451042,
-0.07465057075023651,
-0.04952073097229004,
0.03713593631982803,
0.012143818661570549,
0.04197177663445473,
0.010284969583153725,
0.0012689547147601843,
0.017094464972615242,
-0.00282291485927999,
-0.... | introduced in the early part of this course.
300
Chapter 5 Completing the Accounting Cycle
C O N C E P T S I N P R A C T I C E
The Importance of Understanding How to Complete the Accounting Cycle
Many students who enroll in an introductory accounting course do not plan to become accountants.
They will work in a variety of jobs in the business field, including managers, sales, and finance. In a real
company, most of the mundane work is done by computers. Accounting software can perform such tasks
as posting the journal entries recorded, preparing trial balances, and preparing financial statements.
Students often ask why they need to do all of these steps by hand in their introductory class, particularly
if they are never going to be an accountant. It is very important to understand that no matter what your
position, if you work in business you need to be able to read financial statements, interpret them, and | {"uploaded_via": "batch_uploader", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
b566962e-a008-4fc1-a794-ac058708d237 | [
0.022612126544117928,
0.07195289433002472,
-0.04857910796999931,
-0.027923565357923508,
-0.025177057832479477,
0.031861815601587296,
0.011268994770944118,
0.04061417654156685,
0.1082194522023201,
-0.04332668334245682,
-0.04042404517531395,
0.0071551743894815445,
-0.07310862094163895,
-0.08... | position, if you work in business you need to be able to read financial statements, interpret them, and
know how to use that information to better your business. If you have never followed the full process
from beginning to end, you will never understand how one of your decisions can impact the final
numbers that appear on your financial statements. You will not understand how your decisions can
affect the outcome of your company.
As mentioned previously, once you understand the effect your decisions will have on the bottom line on
your income statement and the balances in your balance sheet, you can use accounting software to do
all of the mundane, repetitive steps and use your time to evaluate the company based on what the
financial statements show. Your stockholders, creditors, and other outside professionals will use your
financial statements to evaluate your performance. If you evaluate your numbers as often as monthly, | {"moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
f4449b50-fd30-4959-b66f-d61b79964972 | [
-0.015227499417960644,
0.02153587155044079,
-0.011122598312795162,
-0.004505989141762257,
0.04317401722073555,
0.0509595088660717,
0.06638124585151672,
0.05219925940036774,
0.01688101701438427,
-0.021525373682379723,
-0.00796497706323862,
-0.0515250600874424,
-0.02982247993350029,
-0.09052... | financial statements to evaluate your performance. If you evaluate your numbers as often as monthly,
you will be able to identify your strengths and weaknesses before any outsiders see them and make any
necessary changes to your plan in the following month.
5.3 Apply the Results from the Adjusted Trial Balance to Compute Current
Ratio and Working Capital Balance, and Explain How These Measures
Represent Liquidity
In The Adjustment Process, we were introduced to the idea of accrual-basis accounting, where revenues and
expenses must be recorded in the accounting period in which they were earned or incurred, no matter when
cash receipts or outlays occur. We also discussed cash-basis accounting, where income and expenses are
recognized when receipts and disbursements occur. In this chapter, we go into more depth about why a
company may choose accrual-basis accounting as opposed to cash-basis accounting.
L I N K T O L E A R N I N G | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "batch_upload": true, "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)"} |
46f4fd7a-a643-4759-89a7-fb72d2835c37 | [
-0.027687689289450645,
-0.02718944475054741,
-0.012582131661474705,
-0.036357004195451736,
0.0034097065217792988,
0.003795321797952056,
0.04375341534614563,
0.021610192954540253,
0.07725438475608826,
0.0240334440022707,
0.043591734021902084,
-0.03431428596377373,
-0.06401187181472778,
0.01... | company may choose accrual-basis accounting as opposed to cash-basis accounting.
L I N K T O L E A R N I N G
Go to the Internal Revenue Service’s website, and look at the most recently updated Pub 334 Tax Guide
for Small Business (https://openstax.org/l/50IRSPub334) to learn more about the rules for income tax
preparation for a small business.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
301
Cash Basis versus Accrual Basis Accounting
There are several reasons accrual-basis accounting is preferred to cash-basis accounting. Accrual-basis
accounting is required by US generally accepted accounting principles (GAAP), as it typically provides a better
sense of the financial well-being of a company. Accrual-based accounting information allows management to
analyze a company’s progress, and management can use that information to improve their business. Accrual | {"producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_type": ".pdf", "uploaded_via": "batch_uploader", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
d569df31-6944-4149-b877-392605ced4a8 | [
-0.04374187812209129,
-0.03725380077958107,
-0.011684564873576164,
-0.05548366531729698,
-0.0022461088374257088,
-0.025231901556253433,
0.05922539159655571,
-0.005299527198076248,
0.08729133009910583,
-0.009331796318292618,
0.04936644062399864,
-0.03074583224952221,
-0.05456554889678955,
0... | analyze a company’s progress, and management can use that information to improve their business. Accrual
accounting is also used to assist companies in securing financing, because banks will typically require a
company to provide accrual-basis financial income statements. The Internal Revenue Service might also
require businesses to report using accrual basis information when preparing tax returns. In addition,
companies with inventory must use accrual-based accounting for income tax purposes, though there are
exceptions to the general rule.
So why might a company use cash-basis accounting? Companies that do not sell stock publicly can use cash-
basis instead of accrual-basis accounting for internal-management purposes and externally, as long as the
Internal Revenue Service does not prevent them from doing so, and they have no other reasons such as
agreements per a bank loan. Cash-basis accounting is a simpler accounting system to use than an accrual- | {"batch_upload": true, "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "creationdate": "2019-04-24T10:32:54-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "producer": "Prince 11 (www.princexml.com)"} |
2748f78c-bb4c-47e9-b0b6-08ffdf580784 | [
-0.03378409147262573,
0.04720871150493622,
-0.012604905292391777,
0.037183668464422226,
0.012397106736898422,
-0.01944621652364731,
0.06138408184051514,
0.010343274101614952,
0.03937323018908501,
0.07303030788898468,
0.051377080380916595,
-0.07004169374704361,
0.036743778735399246,
-0.0019... | agreements per a bank loan. Cash-basis accounting is a simpler accounting system to use than an accrual-
basis accounting system when tracking real-time revenues and expenses.
Let’s take a look at one example illustrating why accrual-basis accounting might be preferred to cash-basis
accounting.
In the current year, a company had the following transactions:
January to March Transactions
Date
Transaction
Jan. 1
Annual insurance policy purchased for $6,000 cash
Jan. 8
Sent payment for December’s electricity bill, $135
Jan. 15
Performed services worth $2,500; customer asked to be billed
Jan. 31
Electricity used during January is estimated at $110
Feb. 16
Realized you forgot to pay January’s rent, so sent two months’ rent, $2,000
Feb. 20
Performed services worth $2,400; customer asked to be billed
Feb. 28
Electricity used during February is estimated at $150
Mar. 2
Paid March rent, $1,000
Mar. 10 | {"total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7} |
35ac9068-121c-471a-b8aa-693b3c92a82e | [
-0.004725051112473011,
0.04110455885529518,
0.004669199697673321,
0.03711593896150589,
-0.017500512301921844,
0.006256781052798033,
-0.018135687336325645,
0.02668958529829979,
0.029450995847582817,
0.05977773293852806,
0.012538095936179161,
-0.01266771461814642,
-0.013900776393711567,
-0.0... | Feb. 20
Performed services worth $2,400; customer asked to be billed
Feb. 28
Electricity used during February is estimated at $150
Mar. 2
Paid March rent, $1,000
Mar. 10
Received all money owed from services performed in January and February
Mar. 14
Performed services worth $2,450. Received $1,800 cash
Mar. 30
Electricity used during March is estimated at $145
Table 5.1
302
Chapter 5 Completing the Accounting Cycle
I F R S C O N N E C T I O N
Issues in Comparing Closing Procedures
Regardless of whether a company uses US GAAP or International Financial Reporting Standards (IFRS),
the closing and post-closing processes are the same. However, the results generated by these processes
are not the same. These differences can be seen most easily in the ratios formulated from the financial
statement information and used to assess various financial qualities of a company. | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7} |
968208db-c34d-4c14-95cf-0463d61106e3 | [
-0.04688785597681999,
0.0042863525450229645,
-0.014215290546417236,
-0.06349079310894012,
0.012412665411829948,
-0.018355997279286385,
-0.03638453409075737,
-0.02031675912439823,
0.09374216198921204,
0.04410506784915924,
0.026158735156059265,
-0.027228379622101784,
-0.08193586021661758,
0.... | are not the same. These differences can be seen most easily in the ratios formulated from the financial
statement information and used to assess various financial qualities of a company.
You have learned about the current ratio, which is used to assess a company’s ability to pay debts as they
come due. How could the use of IFRS versus US GAAP affect this ratio? US GAAP and IFRS most
frequently differ on how certain transactions are measured, or on the timing of measuring and reporting
that transaction. You will later learn about this in more detail, but for now we use a difference in
inventory measurement to illustrate the effect of the two different sets of standards on the current ratio.
US GAAP allows for three different ways to measure ending inventory balances: first-in, first-out (FIFO);
last-in, first-out (LIFO); and weighted average. IFRS only allows for FIFO and weighted average. If the | {"moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1"} |
5e9c6492-9773-4847-b540-009c8e4aec31 | [
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0.024444669485092163,
0.07006187736988068,
-0.0015220013447105885,
-0.05643818527460098,
-... | last-in, first-out (LIFO); and weighted average. IFRS only allows for FIFO and weighted average. If the
prices of inventory being purchased are rising, the FIFO method will result in a higher value of ending
inventory on the Balance Sheet than would the LIFO method.
Think about this in the context of the current ratio. Inventory is one component of current assets: the
numerator of the ratio. The higher the current assets (numerator), the higher is the current ratio.
Therefore, if you calculated the current ratio for a company that applied US GAAP, and then recalculated
the ratio assuming the company used IFRS, you would get not only different numbers for inventory (and
other accounts) in the financial statements, but also different numbers for the ratios.
This idea illustrates the impact the application of an accounting standard can have on the results of a
company’s financial statements and related ratios. Different standards produce different results. | {"producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
1b4468ee-3cdd-47e5-a4a6-6dded0f0e674 | [
-0.05755547061562538,
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-0.019917570054531097,
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-0.04052901268005371,
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0.010772028006613255,
0.017425470054149628,
0.07511686533689499,
-0.025320056825876236,
0.0021365752909332514,
-0... | company’s financial statements and related ratios. Different standards produce different results.
Throughout the remainder of this course, you will learn more details about the similarities and
differences between US GAAP and IFRS, and how these differences impact financial reporting.
Remember, in a cash-basis system you will record the revenue when the money is received no matter when
the service is performed. There was no money received from customers in January or February, so the
company, under a cash-basis system, would not show any revenue in those months. In March they received
the $2,500 customers owed from January sales, $2,400 from customers for February sales, and $1,800 from
cash sales in March. This is a total of $6,700 cash received from customers in March. Since the cash was
received in March, the cash-basis system would record revenue in March.
In accrual accounting, we record the revenue as it is earned. There was $2,500 worth of service performed in | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf"} |
7109cf60-9490-4b1b-adef-6e8c0df7cdb2 | [
-0.056540947407484055,
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0.03691218048334122,
0.05747387185692787,
-0.02397151105105877,
0.04658575356006622,
-0.0299... | received in March, the cash-basis system would record revenue in March.
In accrual accounting, we record the revenue as it is earned. There was $2,500 worth of service performed in
January, so that will show as revenue in January. The $2,400 earned in February is recorded in February, and
the $2,450 earned in March is recorded as revenue in March. Remember, it does not matter whether or not the
cash came in.
For expenses, the cash-basis system is going to record an expense the day the payment leaves company
hands. In January, the company purchased an insurance policy. The insurance policy is for the entire year, but
since the cash went to the insurance company in January, the company will record the entire amount as an
expense in January. The company paid the December electric bill in January. Even though the electricity was
used to earn revenue in December, the company will record it as an expense in January. Electricity used in | {"producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019-04-24T10:32:54-05:00"} |
9b0770ec-6435-488d-96e2-629e93bda46e | [
0.023080315440893173,
0.04854351282119751,
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0.06953568011522293,
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0.021771352738142014,
0.018878618255257607,
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0.04073352739214897,
0.04636097326874733,
-0.031974297016859055,
0.056792620569467545,
-0.0... | used to earn revenue in December, the company will record it as an expense in January. Electricity used in
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
303
January, February, and March to help earn revenue in those months will show no expense because the bill has
not been paid. The company forgot to pay January’s rent in January, so no rent expense is recorded in January.
However, in February there is $2,000 worth of rent expense because the company paid for the two months in
February.
Under accrual accounting, expenses are recorded when they are incurred and not when paid. Electricity used
in a month to help earn revenue is recorded as an expense in that month whether the bill is paid or not. The
same is true for rent expense. Insurance expense is spread out over 12 months, and each month 1/12 of the | {"file_size_mb": 156.7, "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf"} |
213814ad-2422-438b-bafc-58c0fef5c11b | [
0.0158710815012455,
-0.030377184972167015,
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0.048141270875930786,
0.07624039053916931,
0.029007738456130028,
0.045813970267772675,
0.023642659187316895,
0.0622873455286026,
0.0020777378231287003,
0.002019415842369199,
-0.04656769707798958,
0.012584383599460125,
0.06046... | same is true for rent expense. Insurance expense is spread out over 12 months, and each month 1/12 of the
total insurance cost is expensed. The comparison of cash-basis and accrual-basis income statements is
presented in Figure 5.9.
Figure 5.9
Cash Basis versus Accrual Basis Accounting. (attribution: Copyright Rice University, OpenStax,
under CC BY-NC-SA 4.0 license)
C O N C E P T S I N P R A C T I C E
Fundamentals of Financial Ratios
One method used by everyone who evaluates financial statements is to calculate financial ratios.
Financial ratios take numbers from your income statements and/or your balance sheet to evaluate
important financial outcomes that will impact user decisions.
There are ratios to evaluate your liquidity, solvency, profitability, and efficiency. Liquidity ratios look at
your ability to pay the debts that you owe in the near future. Solvency will show if you can pay your bills | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "file_size_mb": 156.7} |
ece5c2eb-1f40-45b5-96b7-1227b30e40ca | [
0.02154974639415741,
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-0.03624095767736435,
0.04103443771600723,
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-0.10421738773584366,
0.006179422605782747,
-0.03738199919462204,
-0.01077375840395689,
0.04364171251654625,
0.02176572009921074,
-0.016316872090101242,
-0.04... | your ability to pay the debts that you owe in the near future. Solvency will show if you can pay your bills
not only in the short term but also in the long term. Profitability ratios are calculated to see how much
profit is being generated from a company’s sales. Efficiency ratios will be calculated to see how efficient a
company is using its assets in running its business. You will be introduced to these ratios and how to
interpret them throughout this course.
Compare the two sets of income statements. The cash-basis system looks as though no revenue was earned in
the first two months, and expenses were excessive. Then in March it looks like the company earned a lot of
revenue. How realistic is this picture? Now look at the accrual basis figures. Here you see a better picture of
what really happened over the three months. Revenues and expenses stayed relatively even across periods. | {"file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
3d63dd59-2458-4ed0-8438-0a2b8646629d | [
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0.0050196400843560696,
0.055542584508657455,
-0.04363398998975754,
0.03702818974852562,
... | what really happened over the three months. Revenues and expenses stayed relatively even across periods.
This comparison can show the dangers of reporting in a cash-basis system. In a cash-basis system, the timing
of cash flows can make the business look very profitable one month and not profitable the next. If your
company was having a bad year and you do not want to report a loss, just do not pay the bills for the last
month of the year and you can suddenly show a profit in a cash-basis system. In an accrual-basis system, it
304
Chapter 5 Completing the Accounting Cycle
does not matter if you do not pay the bills, you still need to record the expenses and present an income
statement that accurately portrays what is happening in your company. The accrual-basis system lends itself
to more transparency and detail in reporting. This detail is carried over into what is known as a classified
balance sheet.
The Classified Balance Sheet | {"upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055} |
522183a1-79e5-42c4-9f59-3324185f9838 | [
-0.03903131186962128,
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-0.08207044750452042,
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0.04331253841519356,
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0.016428142786026,
-0.007478678598999977,
0.07420782744884491,
-0.01833616942167282,
-0.030928023... | to more transparency and detail in reporting. This detail is carried over into what is known as a classified
balance sheet.
The Classified Balance Sheet
A classified balance sheet presents information on your balance sheet in a more informative structure, where
asset and liability categories are divided into smaller, more detailed sections. Classified balance sheets show
more about the makeup of our assets and liabilities, allowing us to better analyze the current health of our
company and make future strategic plans.
Assets can be categorized as current; property, plant, and equipment; long-term investments; intangibles;
and, if necessary, other assets. As you learned in Introduction to Financial Statements, a current asset (also
known as a short-term asset) is any asset that will be converted to cash, sold, or used up within one year, or one
operating cycle, whichever is longer. An operating cycle is the amount of time it takes a company to use its | {"file_type": ".pdf", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00"} |
d967a73b-8150-4a8b-b175-b07a2876a03b | [
-0.006644473411142826,
0.019998662173748016,
0.0005340880015864968,
-0.012932130135595798,
-0.007995584048330784,
-0.04248708114027977,
-0.050624579191207886,
-0.04191847890615463,
0.004160033538937569,
0.014297530986368656,
0.07569520175457001,
0.04331811144948006,
0.014203744009137154,
-... | operating cycle, whichever is longer. An operating cycle is the amount of time it takes a company to use its
cash to provide a product or service and collect payment from the customer (Figure 5.10). For a merchandising
firm that sells inventory, an operating cycle is the time it takes for the firm to use its cash to purchase
inventory, sell the inventory, and get its cash back from its customers.
Figure 5.10 Operating Cycle. (credit left: modification of “All Sales Final” by Dan Keck/Flickr, Public Domain;
credit center: modification of “Money Wallet Finance” by “Goumbik”/Pixabay, CC0; credit right: modification of
“Inventory for Seasonal Decoration” by Mirko Tobias Schäfer/Flickr, CC BY 2.0)
L I N K T O L E A R N I N G
Newport News Shipbuilding is an American shipbuilder located in Newport News, Virginia. According to
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
305 | {"creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
7b9e9cf1-da6e-4070-9f2b-9781f0ccc976 | [
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0.048493463546037674,
0.017410513013601303,
0.04360933229327202,
0.08914491534233093,
0.016... | This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
305
information provided by the company, the company has designed and built 30 aircraft carriers in the past
75 years. That is 30 carriers in 75 years. Newport News constructed the USS Gerald R. Ford. It took the
company eight years to build the carrier, christening it in 2013. The ship then underwent rigorous testing
until it was finally delivered to its home port, Naval Station Norfolk in 2017. That is 12 years after work
commenced on the project.
With large shipbuilding projects that take many years to complete, the operating cycle for this type of
company could expand beyond a year mark, and Newport News would use this longer operating cycle
when dividing current and long-term assets and liabilities.
Learn more about Newport News and its parent company Huntington Ingalls Industries | {"uploaded_via": "batch_uploader", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "batch_upload": true, "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf"} |
1648e8a2-da81-40b2-8a77-8d5d51b5bd57 | [
0.0403188094496727,
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0.06659195572137833,
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0.08429709076881409,
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0.043233733624219894,
0.04852711781859398,
0.01889529637992382,
0.018493659794330597,
0.0237... | when dividing current and long-term assets and liabilities.
Learn more about Newport News and its parent company Huntington Ingalls Industries
(https://openstax.org/l/50IngallsShip) and see a time-lapse video of the construction of the carrier
(https://openstax.org/l/50ShipBuilding) . You can easily tell the passage of time if you watch the snow
come and go in the video.
If an asset does not meet the requirements of a current asset, then it is classified as a long-term asset. It can
be further defined as property, plant, and equipment; a long-term investment; or an intangible asset
(Figure 5.11). Property, plant, and equipment are tangible assets (those that have a physical presence) held
for more than one operating cycle or one year, whichever is longer. A long-term investment is stocks, bonds,
or other types of investments that management intends to hold for more than one operating cycle or one | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
a414e798-d893-4f0a-8a75-f17ea74ebf7b | [
-0.0002967357577290386,
0.01356804370880127,
-0.039853546768426895,
-0.06826206296682358,
0.05767862871289253,
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0.025173336267471313,
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-0.011485200375318527,
0.03721904754638672,
-0.003259176854044199,
0.015836553648114204,
-... | or other types of investments that management intends to hold for more than one operating cycle or one
year, whichever is longer. Intangible assets do not have a physical presence but give the company a long-
term future benefit. Some examples include patents, copyrights, and trademarks.
Liabilities are classified as either current liabilities or long-term liabilities. Liabilities also use the one year, or
one operating cycle, for the cut-off between current and noncurrent. As we first discussed in Introduction to
Financial Statements, if the debt is due within one year or one operating cycle, whichever is longer, the liability
is a current liability. If the debt is settled outside one year or one operating cycle, whichever is longer, the
liability is a long-term liability.
306
Chapter 5 Completing the Accounting Cycle
Figure 5.11
Asset Classification Flowchart. A flowchart for asset classification can assist with financial | {"batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
925f9edb-953e-4df9-9d5e-94dace7deb99 | [
0.018389757722616196,
0.04166650027036667,
-0.0835988000035286,
-0.08234254270792007,
0.037514664232730865,
0.02895701676607132,
0.030168989673256874,
0.025005679577589035,
-0.019283806905150414,
0.057039033621549606,
0.04078957438468933,
-0.0012040419969707727,
0.044314898550510406,
-0.01... | liability is a long-term liability.
306
Chapter 5 Completing the Accounting Cycle
Figure 5.11
Asset Classification Flowchart. A flowchart for asset classification can assist with financial
reporting. (attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Y O U R T U R N
How to Classify Assets
Classify each of the following assets as current asset; property, plant, and equipment; long-term
investment; or intangible asset.
A. machine
B. patent
C. supplies
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
307
D. building
E.
investment in bonds with intent to hold until maturity in 10 years
F. copyright
G.
land being held for future office
H. prepaid insurance
I. accounts receivable
J.
investment in stock that will be held for six months
Solution
A. property, plant, and equipment. B. intangible asset. C. current asset. D. property, plant, and | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "batch_upload": true, "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
bbe4bbab-2ba5-4779-9709-791ac7dd0a43 | [
0.015014992095530033,
-0.012107258662581444,
-0.009383562952280045,
-0.03180236369371414,
-0.01015310175716877,
0.03164902701973915,
0.00930805690586567,
-0.021635884419083595,
0.0009012970258481801,
0.06125333532691002,
0.013327119871973991,
0.07893086224794388,
0.0022801298182457685,
-0.... | I. accounts receivable
J.
investment in stock that will be held for six months
Solution
A. property, plant, and equipment. B. intangible asset. C. current asset. D. property, plant, and
equipment. E. long-term investment. F. intangible asset. G. long-term investment. H. current asset. I.
current asset. J. current asset.
The land is considered a long-term investment, because it is not land being used currently by the
company to earn revenue. Buying real estate is an investment. If the company decided in the future that
it was not going to build the new office, it could sell the land and would probably be able to sell the land
for more than it was purchased for, because the value of real estate tends to go up over time. But like
any investment, there is the risk that the land might actually go down in value.
The investment in stock that we only plan to hold for six months will be called a marketable security in
the current asset section of the balance sheet. | {"uploaded_via": "batch_uploader", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1"} |
977ae6f2-d2de-4763-b7f6-e825ab9377db | [
-0.0680580586194992,
0.05099762603640556,
-0.08119869977235794,
0.030138907954096794,
0.03265305981040001,
0.028870513662695885,
0.014991666190326214,
-0.045179665088653564,
0.08735053241252899,
-0.027148304507136345,
0.07139427214860916,
0.10306805372238159,
-0.007595393806695938,
-0.0805... | The investment in stock that we only plan to hold for six months will be called a marketable security in
the current asset section of the balance sheet.
As an example, the balance sheet in Figure 5.12 is classified.
308
Chapter 5 Completing the Accounting Cycle
Figure 5.12
Classified Balance Sheet for Magnificent Landscaping Service. (attribution: Copyright Rice
University, OpenStax, under CC BY-NC-SA 4.0 license)
C O N T I N U I N G A P P L I C A T I O N A T W O R K
Interim Reporting in the Grocery Industry
Interim reporting helps determine how well a company is performing at a given time during the year.
Some companies revise their earnings estimates depending on how profitable the company has been up
until a certain point in time. The grocery industry, which includes both private and publicly traded
companies, performs the same exercise.
However, grocery companies use such information to inform other important business decisions. | {"creationdate": "2019-04-24T10:32:54-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "uploaded_via": "batch_uploader", "total_pages": 1055, "file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1"} |
b264646e-1082-4634-9a30-a2367a56458a | [
0.0389920137822628,
0.03768451511859894,
-0.03758734464645386,
-0.018246598541736603,
0.022329552099108696,
0.023814059793949127,
0.01924893446266651,
0.0326186940073967,
0.07896703481674194,
-0.009795909747481346,
0.08682670444250107,
0.07553749531507492,
-0.017565416172146797,
-0.0881419... | companies, performs the same exercise.
However, grocery companies use such information to inform other important business decisions.
Consider the last time you walked through the grocery store and purchased your favorite brand but
found another item out of stock. What if the next time you shop, the product you loved is no longer
carried, but the out-of-stock item is available?
Grocery store profitably is based on small margins of revenue on a multitude of products. The bar codes
scanned at checkout not only provide the price of a product but also track how much inventory has been
sold. The grocery store analyzes such information to determine how quickly the product turns over,
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 5 Completing the Accounting Cycle
309
which drives profit on small margins. If a product sells well, the store might stock it all of the time, but if a | {"upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00"} |
bdf8f51f-41c5-4fc3-8d1a-6827637265f3 | [
-0.003467524191364646,
0.013233190402388573,
-0.09587033092975616,
-0.016894569620490074,
0.04424326494336128,
0.033345483243465424,
0.09606451541185379,
0.02998097613453865,
0.07443099468946457,
-0.04768355190753937,
-0.008847108110785484,
-0.024090150371193886,
-0.037234533578157425,
-0.... | 309
which drives profit on small margins. If a product sells well, the store might stock it all of the time, but if a
product does not sell quickly enough, it could be discontinued.
Using Classified Balance Sheets to Evaluate Liquidity
Categorizing assets and liabilities on a balance sheet helps a company evaluate its business. One way a
company can evaluate its business is with financial statement ratios. We consider two measures of liquidity,
working capital, and the current ratio. Let’s first explore this idea of liquidity.
We first described liquidity in Introduction to Financial Statements as the ability to convert assets into cash.
Liquidity is a company's ability to convert assets into cash in order to meet short-term cash needs, so it is very
important for a company to remain liquid. A critical piece of information to remember at this point is that most
companies use the accrual accounting method to determine and maintain their accounting records. This fact | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true} |
bff71a1b-d902-40f0-8935-d1042d41987a | [
0.0021865114104002714,
0.04538615420460701,
0.019245166331529617,
0.014123544096946716,
-0.020598016679286957,
-0.05192422494292259,
0.037653472274541855,
-0.02371079847216606,
0.01752534694969654,
-0.0326809398829937,
0.0372949056327343,
-0.0003538273158483207,
-0.04576081037521362,
0.003... | companies use the accrual accounting method to determine and maintain their accounting records. This fact
means that even with a positive income position, as reflected by its income statement, a company can go
bankrupt due to poor cash flow. It is also important to note that even if a company has a lot of cash, it may still
be in bankruptcy trouble if all or much of that cash is borrowed. According to an article published in Money
magazine, one in four small businesses fail because of cash flow issues.[1] They are making a profit and seem
financially healthy but do not have cash when needed.
Companies should analyze liquidity constantly to avoid cash shortages that may result in a need for a short-
term loan. Intermittently taking out a short-term loan is often expected, but a company cannot keep coming
up short on cash every year if it is going to remain liquid. A seasonal business, such as a specialized holiday | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting"} |
82e0ea5d-68fa-4176-a86b-228b785767d6 | [
-0.013484301045536995,
-0.011151891201734543,
0.0252408217638731,
-0.0257413350045681,
-0.01049857772886753,
-0.02577906660735607,
0.05495796725153923,
0.02521454356610775,
0.023536810651421547,
-0.037537381052970886,
0.012360259890556335,
0.031206509098410606,
-0.04175183176994324,
-0.032... | up short on cash every year if it is going to remain liquid. A seasonal business, such as a specialized holiday
retailer, may require a short-term loan to continue its operations during slower revenue-generating periods.
Companies will use numbers from their classified balance sheet to test for liquidity. They want to make sure
they have enough current assets to pay their current liabilities. Only cash is used to directly pay liabilities, but
other current assets, such as accounts receivable or short-term investments, might be sold for cash, converted
to cash, or used to bring in cash to pay liabilities.
E T H I C A L C O N S I D E R A T I O N S
Liquidity Is as Important as Net Worth
How does a company like Lehman Brothers Holdings, with over $639 billion in assets and $613 billion in
liabilities, go bankrupt? That question still confuses many, but it comes down to the fact that having | {"creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_size_mb": 156.7} |
c7312274-551a-441b-9f6a-cd434e870c3b | [
-0.024927059188485146,
0.028047747910022736,
-0.05439694970846176,
-0.015681307762861252,
-0.030789650976657867,
0.007747958414256573,
0.08412724733352661,
0.059580083936452866,
0.06984637677669525,
-0.017217479646205902,
0.048597417771816254,
0.034494899213314056,
-0.005448999349027872,
-... | liabilities, go bankrupt? That question still confuses many, but it comes down to the fact that having
assets recorded on the books at their purchase price is not the same as the immediate value of the
assets. Lehman Brothers had a liquidity crisis that led to a solvency crisis, because Lehman Brothers
could not sell the assets on its books at book value to cover its short-term cash demands. Matt Johnston,
in an article for the online publication Coinmonks, puts it simply: “Liquidity is all about being able to
access cash when it’s needed. If you can settle your current obligations with ease, you’ve got liquidity. If
you’ve got debts coming due and you don’t have the cash to settle them, then you’ve got a liquidity
crisis.”[2] Continuing this Coinmonks discussion, the inability to timely pay debts leads to a business entity
Elaine Pofeldt. “5 Ways to Tackle the Problem That Kills One of Every Four Small Businesses.” Money. May 19, 2015. http://time.com/money/ | {"uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00"} |
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