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34 - How quickly item is converted to in cash • Current...

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Temporary and Permanent Accounts Temporary Revenues, Expenses and Dividends Closed Balances represent a period of time Permanent Asset, liability and equity accounts Not closed Ending balance of one period carries over to following period Closing Entries Debit each Revenue account for the amount in its credit balance Retained earnings is credited Credit each Expense account for the amount in its debit balance Retained earnings is debited Credit Dividends for the amount in its debit balance Retained earnings is debited Classifying Assets & Liabilities Current and long-term classifications are based on liquidity
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Unformatted text preview: How quickly item is converted to in cash • Current assets will be converted to cash, sold or used during the next year • Long-term assets include plant assets • Current liabilities must be paid in the next 12 months • Long-term liabilities have due dates more than one year from balance sheet date Classified Balance Sheet • Places assets into meaningful categories • Categories: Current assets Long-term investments Property, plant and equipment Intangible assets Other assets...
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