Exam 5: The Accounting Cycle: Reporting Financial Results

[The following information applies to the questions displayed below.] Shown below is a trial balance for Novelty Toys,Inc. ,on December 31,after adjusting entries: -The entry to close Salaries Expense account will:

Stockholders typically prepare the financial statements of publicly owned companies.

Preparation of financial statements Using the Adjusted Trial Balance shown below,prepare (a)an Income Statement and (b)a Statement of Retained Earnings for All Star Repairs.

Accountants refer to the period of time from October 1 - December 31 as "busy season."

Return on equity is a commonly used measure of a company's profitability.

The concept of adequate disclosure requires a company to inform financial statement users of each of the following,except:

The purpose of making closing entries is to:

The return on equity ratio equals net income divided by common stock.

The balance in Income Summary:

The closing entry for an expense account would consist of a:

Retained Earnings at the end of a period:

A current asset must be capable of being converted into cash within a relatively short period of time,usually less than five years.

After all the closing entries have been posted the Income Summary account will have a zero balance.

The current ratio is a measure of liquidity.

The adjusted trial balance contains income statement accounts and balance sheet accounts,while the after-closing trial balance will only have balance sheet accounts.

A statement of retained earnings shows:

An after-closing trial balance consists only of asset,liability,and owners' equity accounts.

Net income for the period equals:

[The following information applies to the questions displayed below.] Shown below is a trial balance for Novelty Toys,Inc. ,on December 31,after adjusting entries: -The entry to close the Fees Earned account will:

Which of the following account titles would not be debited in the process of preparing closing entries for Andrew's Auto Shop?