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Chapter4Terms - Classified balance sheet A balance sheet...

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Classified balance sheet A balance sheet that contains standard classifications or sections. Closing entries Entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent stockholders' equity account, Retained Earnings. Correcting entries Entries to correct errors made in recording transactions. Current assets Assets that a company expects to convert to cash or use up within one year. Current liabilities Obligations that a company expects to pay from existing current assets within the coming year. Income Summary A temporary account used in closing revenue and expense accounts. Intangible assets Noncurrent assets that do not have physical substance. Liquidity The ability of a company to pay obligations expected to be due within the next year. Long-term investments Generally, (1) investments in stocks and bonds of other companies that companies normally hold for many years, and (2) long-term assets, such as land and buildings, not currently being used in operations.
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