Pioneer Advertising's adjusted trial balance in Illustration 4-4 shows a balance for Supplies of $1,000 and for Prepaid Insurance of $550. How would these be classified on the balance sheet?
Explanation
Supplies and prepaid insurance represent costs paid in advance for goods or services that will be consumed in the near future (within one year or the operating cycle). Therefore, they are classified as current assets on a classified balance sheet.
Other questions
According to the textbook, which of the following is an accurate statement regarding the accounting worksheet?
Which step in preparing a worksheet involves entering all ledger accounts with balances into the appropriate columns?
In a worksheet, when extending the adjusted trial balance amounts to the financial statement columns, where is the Owner's Drawings account balance extended?
When completing a worksheet, how is net income recorded if total credits in the Income Statement columns exceed total debits?
What is the primary purpose of preparing a post-closing trial balance?
Which of the following accounts would NOT appear in a post-closing trial balance?
Which of the following describes the difference between permanent and temporary accounts?
What is the correct sequence for the four closing entries?
In the closing process, if a company has a net loss for the period, the journal entry to close the Income Summary account would involve which of the following?
What is a key difference between correcting entries and adjusting entries?
Which of the following asset categories on a classified balance sheet includes assets with relatively long useful lives that a company is currently using in operating the business?
The operating cycle of a company is defined as:
On a classified balance sheet, current assets are usually listed in which order?
Based on the worksheet for Pioneer Advertising in Illustration 4-6, what is the total of the debit column for the Income Statement?
If a company uses an optional reversing entry, when is this entry typically made?
The closing entry for the Owner's Drawings account involves which of the following?
What does the term 'liquidity' refer to?
On May 10, Mercato Co. recorded a $50 cash collection on account from a customer as a debit to Cash and a credit to Service Revenue. The error was discovered on May 20. What is the correct correcting entry?
According to Illustration 4-21, Franklin Company's classified balance sheet shows total current assets of $22,100 and total current liabilities of $16,050. What is the company's working capital?
Which of the following is NOT one of the required steps in the accounting cycle as shown in Illustration 4-15?
What is the purpose of an optional reversing entry?
Which types of adjusting entries are most often reversed?
Assets that a company expects to convert to cash or use up within one year or its operating cycle, whichever is longer, are called:
Using the data for Hercules Company's adjusted trial balance on page 180, what is the journal entry to close the revenue accounts?
Based on the Hercules Company adjusted trial balance on page 180, what is the total amount of expenses to be closed to Income Summary?
Using the information for Hercules Company on pages 180-181, which entry correctly closes the Income Summary account?
On May 18, Mercato Co. purchased equipment on account for $450, but the transaction was incorrectly journalized as a debit to Equipment $45 and a credit to Accounts Payable $45. How would this error be corrected?
Which of the following is NOT a standard classification in a classified balance sheet?
Obligations that a company expects to pay AFTER one year are classified as:
What is the primary benefit of preparing financial statements from a worksheet?
When a reversing entry is made for accrued salaries, what is the effect on the Salaries and Wages Expense account at the beginning of the new period?
Which of the following is an example of an intangible asset?
The balance in the Owner's Capital account on a worksheet represents:
If the Income Statement columns of a worksheet show total debits of $49,900 and total credits of $48,500, the company has a:
Which of the following is a long-term investment?
After closing entries are posted, the balance in the Owner's Capital account will be equal to:
The closing entry for expense accounts involves:
From the worksheet for Pampered Pet Service on page 183, what is the amount of the net loss for August?
From the Pampered Pet Service balance sheet on page 184, calculate the company's working capital.
If an optional reversing entry for accrued salaries was made on November 1 for $1,200, what would the journal entry be to pay the full salary amount of $4,000 on November 9?
What type of account is Accumulated Depreciation?
If a company has total assets of $61,400 and owner's equity of $34,050, what are its total liabilities?
A company purchases a building, intending to use it for operations. This asset would be classified on the balance sheet under:
The journalizing and posting of closing entries is a required step in the accounting cycle that generally takes place:
Which of the following is NOT an advantage of using a worksheet in the accounting cycle?
In a classified balance sheet, which of the following would be classified as a current liability?
What is the purpose of closing the Owner's Drawings account?
If a company has a reversing entry for accrued interest revenue of $200 (debit Service Revenue, credit Accounts Receivable) on Nov 1, and on Nov 10 collects $500 cash which includes the accrued amount, what is the entry on Nov 10?
Which of the following steps in the accounting cycle is performed last?