lj unit 4 - 1 The worksheet is a large columnar form that assists in the preparation of an entity's financial statements 2 Amounts in the adjusted trial

lj unit 4 - 1 The worksheet is a large columnar form that...

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1. The worksheet is a large columnar form that assists in the preparation of an entity's financial statements. 2. Amounts in the adjusted trial balance columns of the worksheet are extended to the or columns income statement , balance sheet and retained earnings of the work sheet. 3. Revenue, expense, and dividend accounts must be closed or reduced to zero so amounts are not carried over from one period to the next. These accounts are appropriately known as nominal or temporary accounts. 4. Accounts whose balances are carried forward from period to period are commonly called real or permenant accounts. 5. The income summary account is used only in closing, and summarizes the net income or net loss of a business. 6. The income summary account is closed directly to retained earnings. 7. To determine whether the accounts are still in balance after closing entries have been journalized and posted, accountants often prepare a . post closing trial balance 8. A reversing entry is the exact opposite of an adjusting entry. 9. The operating cycle is the length of time it takes a company to turn Caskh back into cash via investing in inventory and accepting accounts receivable. 10. Current assets should be listed on a balance sheet in order of . liquidity 11. Intangiable assets usually follow property, plant, and equipment on a classified balance sheet. 12. Working capital is computed by subtracting current libilities from current assets . The accountant's worksheet: a. lays the groundwork for formal financial statement preparation.
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