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MGAB01H3 Chapter : Work Sheet

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ochretortoise616
27 Oct 2010
School
UTSC
Department
Financial Accounting
Course
MGAB01H3
Professor
Liang Chen

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MGAB01H3 Full Course Notes
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MGAB01H3 Full Course Notes
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Document Summary

A work sheet is a multiple-column form that may be used in the adjustment process and in preparing financial statements. As its name suggests, the work sheet is a working tool for the accountant. A work sheet is not a permanent accounting record; it is neither a journal nor a part of the general ledger. Financial statements, for example, can be easily prepared from the work sheet, reducing errors. At the end of the accounting period, temporary accounts are closed and made ready for the next accounting period. Temporary accounts relate to a single accounting period. In contrast, permanent accounts consist of all balance sheet accounts, including the. Temporary account balances are transferred to the equity account of the 43078 capital. Closing entries formally record in the ledger the transfer of net income (or net loss) Closing entries produce a zero balance in each temporary account.

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Related Questions

Financial Statements and the Closing Process Discussion

As the first quarter at your restaurant draws to a close, you must prepare your accounting records for a new period and a fresh start. Share with your classmates which accounts are permanent, which accounts are temporary, and why the closing entries must be completed in order for a new period to begin.

TRUE or FALSE

  1. Accumulated Depreciation is a permanent account.
  2. The dividends account is a temporary account.
  3. The accumulated depreciation is closed to the income summary account.
  4. Office equipment is an example of a current asset account.
  5. The amount of the net income for a period appears on both the income statement and the balance sheet for the period.
  6. Generally accepted accounting principles require accrual-basis accounting.
  7. Unearned revenue is a liability.
  8. The financial statement is prepared from the unadjusted trial balance.
  9. After analyzing transactions, the next step is to post the transaction in the ledger.
  10. Prepaid insurance is an example of a current asset. 

A post-closing trial balance will show

a. the amount of net income (or loss) for the period.

b. only temporary account balances.

c. zero balances for all accounts.

d. only permanent account balances.