Concept explainers
(a)
Worksheet: A worksheet is the summary of accounting information that is prepared to ensure that the accounts are recorded correctly for financial statements preparation. It reflects the temporary and permanent account both.
To prepare: The worksheet for Company T.
(b)
Income Statement: Income statement is a part of financial statements. It depicts the profit or loss, a company has, in a financial year. The balances of revenues and expense accounts from
Owners’ Equity Statement: Statement of
Classified
To prepare: The income statement, owners’ equity statement and classified balance sheet for Company T.
(c)
Closing Entries: Journal entries, which transfer the balances from temporary accounts to income summary or retained earnings account, are called closing entries. The revenues accounts are debited and the expenses are credited in these entries because their balances are transferred.
To record: The closing entries for Company T as on December 31, 2017.
(d)
To prepare: The ledger accounts at the end of December, 2017.
(e)
To prepare: Post-closing trial balance for Company T.
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Chapter 4 Solutions
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