Exam 3: Accrual Accounting Income

The basic defect of cash-basis accounting is that the cash basis ignores important information.

Sendik's Food Store has the following Adjusted Trial Balance as of March 31,2019.Determine the current ratio.Round your answer to two decimal places.

A company started the year with $200 of supplies.During the year,the company purchased an additional $1,400 of supplies.There were $600 of supplies on hand at the end of the year.An adjusting entry prepared at the end of the accounting period includes a:

Closing entries:

Accounts that relate to a limited period of time are called:

The adjustment for an accrued revenue:

The adjustments columns of the Trial Balance Worksheet summarize the:

On October 1,McReady Company paid six months' insurance in advance totaling $3,600.The policy begins on October 1.An adjusted trial balance prepared on December 31 would include a balance in the Prepaid Insurance account of:

In an unadjusted trial balance,the accounts are not yet ready for the preparation of the company's financial statements.

All of the following accounts are closed EXCEPT for:

Prepaid Rent and Unearned Service Revenue are examples of accounts that do not need to be adjusted at the end of the accounting period.

Complete the following chart to show the required adjusting entries for the following situations:

Prepaid expenses will become ________ when their future benefits expire.

The only way for a business to know for certain how well it performed is to shut down,sell the assets,pay the liabilities,and return any leftover cash to the owners.

Indicate if the account is a current asset (CA),long-term asset (LTA),current liability (CL),long-term liability (LTL),or stockholders' equity(SE):

The revenue principle requires that a business record revenue when the business:

The net income or loss is calculated on which financial statement?

The Trial Balance Worksheet does NOT have columns for:

Why is it necessary to close the books at the end of the accounting period?

Christine's Cleaning Services,Inc.has the following adjusted trial balance as of March 31,2017.Prepare a classified balance sheet as of that date.