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ACC Chapter Four


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Classified balance sheet
A balance sheet that contains a number of standard classifications or sections
Closing entries
Entries made at the end of an accounting period to transfer balances of temporary accounts to a permanent stockholders' equity account
Correcting entries
Entries to correct errors made in recording transactions
Current assets
Cash and other resources that are ressonably expecterd to be realized in cash or sold or consumed in the business within one year or the operating cycles, whichever is longer
Current liabilities
Obligations reasonably expected to be paid from existing current assets or through the creation of other current liabilities within the next year or operating cycle, whichever is longer
Income Summary
A temporary accountyed used in closing revenue and expense accounts
Intangible assets
Noncurrent resources that do not have physical subtance
The ability of a company to pay obligations that are expeted to become due within the next year or operating cycle
Long-term investment
Resources not expected to be realized in cash within the next year or operating cycle
Long-term liabilities
Obligations expeted to be paid after one year
Operating cycle
The average time rquired to go from cash to cash in producing revenues
Permanent (real) accounts
Balance sheet accounts whose balancear carried foward to the next accounting period
Post-closing trial balance
A list of permanent accounts and their blances after closing entries have been journalized and posted
Property, plant, and equipment
Assets of a relatively permanent nature that are being used in the business not intended for resale
Reversing entry
An enry made at the beginning of the next accounting period that is the exact opposite of the adjusting entry made in the previous period
Stockholders' equity
The ownership claim of shareholders n total assets
Temporary (nominal) accounts
Revenue, expense, and dividends accounts whose balances are transferred to retained earnings at the end of an accounting period
Work sheet
A multiple-column form that may be used in the adjustment process and in preparing financial statements

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