ACC 240 Study Guide - Final Guide: Financial Statement, General Ledger, Retained Earnings
Closing is the process of transferring the temporary account balances to the Retained Earnings account
at the end of the accounting period. Which of the following are temporary accounts?
Revenue, expense, and dividend accounts
The temporary accounts include revenue, expense, and dividend accounts. At the beginning of the
accounting period, the temporary accounts have zero balances. Asset, liability, and equity accounts are
permanent accounts. Permanent account balances carry forward from one accounting period to the
next.
Buccaneer Corporation paid $6,000 in cash dividends to its owners. Which of the following answers in
this horizontal financial statements model reflects how this payment of cash dividends would affect
Buccaneer Corporation's financial statements?
Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow
Cash N. Pay + C. Stk. + Ret. Ear.
(6,000) = n/a + n/a + (6,000) n/a - n/a = n/a (6,000) FA
Moore Company provided services to customers for $8,000 cash. Which of the following answers in this
horizontal financial statements model reflects how this event would affect Moore Company's financial
statements?
Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow
Cash N. Pay + C. Stk. + Ret. Ear.
8,000 = n/a + n/a + 8,000 8,000 - n/a = 8,000 8,000 OA
Radford Company was started on January 2, 2016. During its first year of operations, Radford Company
provided $86,000 in consulting services to its clients on account and collected $69,000 of this amount.
Use the horizontal financial statements model to record these transactions and determine which of the
following statements is incorrect.
Total assets increased by $69,000.
Sturgis Company began its operations on March 1, 2016. The following information is from Sturgis
Company's accounting records for 2016.
1. Acquired $40,000 from the issuance of common stock.
2. Provided $130,000 of services on account.
3. Purchased $3,200 of supplies on account.
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4. Collected $112,000 from accounts receivable.
5. Paid $64,000 for salaries expense.
6.
Adjusted the records to reflect the use of supplies. A physical count indicated that $700 of the supplies
was still on hand on December 31, 2016.
Record the transactions in general ledger accounts under an account equation and select the correct
statement.
Ending cash balance is $88,000.
On December 31, 2016, Hanover Corporation had the following account balances:
Cash $ 24,000
Service Revenue 73,000
Advertising Expense 12,000
Accounts Receivable 20,000
Salaries Payable 2,000
Land 15,000
Retained Earnings, 1/1/2015 18,000
Salaries Expense 28,000
Common Stock 10,000
Dividends 4,000
What is Hanover's balance in Retained Earnings after the temporary accounts are closed at the end of its
2016 accounting period?
$47,000
At the beginning of 2016, Stillwater Company had a $250 balance in its Supplies account. During the
year the company paid $1,500 cash for additional supplies. The physical count of supplies on hand at the
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Document Summary
Closing is the process of transferring the temporary account balances to the retained earnings account at the end of the accounting period. The temporary accounts include revenue, expense, and dividend accounts. At the beginning of the accounting period, the temporary accounts have zero balances. Asset, liability, and equity accounts are permanent accounts. Permanent account balances carry forward from one accounting period to the next. Buccaneer corporation paid ,000 in cash dividends to its owners. Which of the following answers in this horizontal financial statements model reflects how this payment of cash dividends would affect. Ear. (6,000) = n/a + n/a + (6,000) n/a - n/a = n/a (6,000) fa. Moore company provided services to customers for ,000 cash. 8,000 = n/a + n/a + 8,000 8,000 - n/a = 8,000 8,000 oa. Radford company was started on january 2, 2016.
