Business High School
Post closing trail balance
As we know that
In the trial balance, it contains two sections. The one is debit that recorded expenses, and assets whereas another one are credit that recorded liabilities, revenues, and the stockholder equity
The post-closing trial balance is that trial balance that is made after passing the closing entries with respect to revenues, expenditure, dividend, net profit or net income.
The motive of this to balance the debit and the credit section which should be zero. Moreover, it is to be carried forward that would become the starting balance of the next accounting period.
Maiko lost her job and she was forced to sell a rental property because she did not have other funds (liquid, emergency, etc) available to meet her financial obligations. What financial principle best applies to this situation?
Answer: The importance of liquidity
The financial principle at play is the importance of liquidity. Liquidity is the ease with which asset can be converted to cash. Maiko's asset has helped her to solve her financial issues she is experiencing after her job loss, therefore this shows the importance of liquidity.
PreFab, a clothing company is selling its goods in the country of Irmana. The clothing is manufactured in PreFab's home country and a tax is levied on it by the government of Irmana. This form of business is an example of _______.A) direct foreign investment B) exporting
PreFab is engaged in exportation of their clothing line from their country where it is produced to Irmana where it is used. Exportation is the process of sending products made in a country to another country where it is consumed. In exportation taxes are paid in the form of duties.
The concept of "human resource management" implies that employees are a _________.a. secondary component of a business. b. troublesome and need to be monitored. c. resources of the employer. d. an unnecessary cost to an employer.
c. resources of the employer.
the name of the flash card is called Ch.1
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Allen Marks is the sole stockholder of Great Marks Company. As of the end of its accounting period, December 31, 2011, Great Marks Company has assets of $940,000 and liabilities of $300,000. During 2012, Allen Marks purchased an additional $65,000 of capital stock and received $45,000 in cash dividends from the business. What is the amount of net income during 2012, assuming that as of December 31, 2012, assets were $995,000, and liabilities were $270,000?
The computation of the net income is shown below:
As we know that
Ending balance of capital account = Beginning balance of capital account + net income - the withdrawn amount + additional amount invested
Ending balance of capital account equal to
= Ending balance of total assets - ending balance of total liabilities
= $995,000 - $270,000
And, the opening balance of capital account equal to
= Opening balance of total assets - opening balance of total liabilities
= $940,000 - $300,000
So, the net income is
$725,000 = $640,000 + net income - $45,000 + $65,000
So, the net income equal to $65,000
Sunland Company has the following account balances at year end:Office supplies $3800Raw materials 27500Work-in-process 59500Finished goods 97500Prepaid insurance 5400What amount should Sunland report as inventories in its balance sheet?1. $188300.2. $97500.3. $101300.4. $184500.
Sunland Company has the following account balances at year end:
- Office supplies $3,800
- Raw materials $27,500
- Work-in-process $59,500
- Finished goods $97,500
- Prepaid insurance $5,400
inventories = raw materials + work in progress + finished goods = $27,500 + $59,500 + $97,500 = $184,500
both office supplies and prepaid insurance are assets, but they are not part of the company's inventory.
_____ are financial intermediaries that obtain funds by accepting checking and savings deposits from individuals, businesses, and other institutions, and then lending those funds to borrowers. a. Common markets
b. Depository institutions
c. Investment banks
d. Securities brokers
Option "B" is the correct answer to the following statement.
Depository Institutions are a type of organization that collects money from the people in the form of their saving or investment.
- Depository Institution Invest this money in the form of loan or long term loan to the other business and institutions.
However, Credit societies are not included in Depository Institutions.
When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls, and fewer Adidas soccer balls. Which of the following best explains Ronaldo's decision to buy more Nike soccer balls? answer choices
the substitution effectthe income effectan increase in the demand for Nike soccer ballsthe price effect
The law of demand states an inverse relationship between price of a good and it's demand implying, if price of a good rises, keeping other factors affecting demand constant, the demand for the good falls.
There exists a direct relationship between price a good and the demand for it's substitute. This means if price of a good falls, the demand for it's substitute shall fall and vice versa.
In the given case, Nike and Adidas soccer balls are perfect substitutes. When price of Nike fell, it's demand rose and lesser Adidas balls were purchased than earlier. This is termed as Substitution Effect.
Chan Sports purchases one year of rent on November 1 for $12,000 ($1,000 per month), debiting Prepaid Rent. On December 31, Chan Sports would record the following year-end adjusting entry: a. Rent Expense 2,000
Prepaid Rent 2,000
b. Rent Expense 10,000
Prepaid Rent 10,000
c. Rent Expense 12,000
Prepaid Rent 12,000
d. No entry is required on December 31 because full cash payment was made on
a. Rent Expense 2,000
Prepaid Rent 2,000
On December 31, Chan Sports would record the following year-end adjusting entry:
a. Rent Expense 2,000
Prepaid Rent 2,000
Because two months Prepaid rent had expired on 31st December and the Prepaid Rent would decrease by $ 2000. The remaining Prepaid rent would be $ 10,000 and rent expense would be $ 2000. So we credit Prepaid Rent $ 2000 and debit Rent Expense $ 2000.
How can trade-offs and opportunity costs be measured?
The terms opportunity cost and trade-off are, in most cases, used interchangeably. Opportunity cost occurs due to scarcity of resources. Individuals have to make choices among the options available to them. The fortified option is the trade-off or the opportunity cost.
Opportunity cost is measured by obtaining the value of the next best alternative. In other words, the cost of the most valuable sacrificed option is the opportunity cost. For example, if a student has $50, he can purchase a meal valued at $45, watch a movie valued at $40 or buy a book for $ 47. assuming he opts to buy the book, the meal becomes the opportunity cost because it represents the next best alternative.
If a good has a price elasticity of demand of - 3, it implies that: a. if the price of the good increases by 3%, the quantity demanded of the good will increase by 1%. b. if the income of the consumer increases by 3%, the quantity demanded of that good will increase by 1%. c. if the price of the good increases by 1%, the quantity demanded of the good will decrease by 3%. d. if the income of the consumer increases by 1%, the quantity demanded of that good will increase by 3%.
c. if the price of the good increases by 1%, the quantity demanded of the good will decrease by 3%.
A price elasticity of -3 indicates that demand is elastic. It negative sign shows that demand has a negative relationship with price. If price of the good increases by 1%, the quantity demanded of the good will decrease by 3%.
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On January 2, 20X1, Schneider Company issues $100,000 of 6% bonds. The market interest rate is 7%. Interest of $3,000 is payable semi-annually on June 30 and December 31. The bonds mature in 5 years. The bond issues for $95,842. On June 30, the company should recognize a discount amortization of ___________.
The answer to this question is $354.47
Firstly, interest payable based on face value of the bond and coupon interest rate is 6%*$100000*6/12,which is $3000 semi annually as given in the question.
However,interest based on market value and market interest rate is $95,842*7%*6/12=$3354.47
In other words, the bond discount amortization is the difference between the two interests as calculated above.
The necessary entries to pass in the books of accounts are stated thus:
DR Interest expense $3354.47
CR Interest payable $3000
CR Bond discount $354.47
Omni Healthcare's analgesic drug Cetaprin has a 40% share in the analgesics market in Terrania. Its closest competitor, Febex, has a 25% share in the market, while three other drugs split the remainder. Which of the following would most indicate that Cetaprin would be classified as a cash cow according to the BCG matrix?
C) The demand for analgesic drugs in the Terranian market is expected to remain stable.
The Boston Consulting Group (BCG) matrix divides product portfolio into four main groups:
- Dogs: Do not generate large amounts of cash and have a small market share or slow growth.
- Question marks: low cash generation but high market growth rate, it is unknown if they will be successful and profitable or not.
- Stars: generate a lot of cash, and their sales and market shares grows steadily.
- Cash cows: generate a lot of cash but their sales aren't growing (stable demand), usually products that are at their maturity stage.
Kim runs a restaurant. She expects her employees to deliver excellent customer service. As a result, the employees often feel pressurized. In the context of the Blake/Mouton leadership grid, which of the following leadership styles is Kim using in this scenario?
C) The authority-compliance style
Kim as well as other managers that follow the authority-compliance style believe that their subordinates are not important members of the organization. What matters is profits, and the higher the better, the needs of the employees are secondary.
This style focuses on exact work rules, arrangements, systems and discipline as a means to succeed. In the short run this leadership style can yield good results, improving employees' performance, but on the long run it doesn't work well, and all the benefits obtained at the beginning fade away.
Not only do businesses see benefits from the protections of ________
Trademarks is the term which is defined as the kind of the intellectual property comprises of the recognizable expression, design or sign, that identifies or acknowledges the services or the products of the specific source from those of others.
It is used to identify the services are mostly known as the service marks. In short, it basically provides the protection to the business, individual or any legal entity, on their design, product and sign. It also benefit the consumers.
Therefore, it not only benefits the businesses from the protection.
Waldman Pools manufactures swimming pool equipment. Waldman estimates total manufacturing overhead costs next year to be $ 1 comma 200 comma 000. Waldman also estimates it will use 40 comma 000 direct labor hours and incur $ 800 comma 000 of direct labor cost next year. Inâ addition, the machines are expected to be run for 30 comma 000 hours. Compute the predetermined manufacturing overhead rate for next year under the following independentâ situations: 1. Assume that the company uses direct labor hours as its manufacturing overhead allocation base. 2. Assume that the company uses direct labor cost as its manufacturing overhead allocation base. 3. Assume that the company uses machine hours as its manufacturing overhead allocation base.
1. $30 per direct labor hours
3. $40 per machine hours
The computation is shown below:
We know that
Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated cost drivers)
In the first case, the predetermined overhead rate equal to
= (Total estimated manufacturing overhead) ÷ (estimated direct labors hours)
= ($1,200,000) ÷ (40,000 direct labor hours)
= $30 per direct labor hours
2, In the second case, the predetermined overhead rate equal to
= (Total estimated manufacturing overhead) ÷ (estimated direct labors cost)
= ($1,200,000) ÷ ($800,000)
3. In the third case, the predetermined overhead rate equal to
= (Total estimated manufacturing overhead) ÷ (estimated machine hours)
= ($1,200,000) ÷ (30,000 machine hours)
= $40 per machine hours
An allocation base, such as direct labor-hours, direct labor dollars, or machine-hours, is used to assign manufacturing overhead to products. Allocation bases are used because: a. It is impossible or difficult to trace these costs to particular jobs (i.e., manufacturing overhead is an indirect cost).
b. Manufacturing overhead consists of many different items ranging from the grease used in machines to the production manager's salary.
c. Many types of manufacturing overhead costs are fixed even though output may fluctuate during the year
a. It is impossible or difficult to trace these costs to particular jobs (i.e., manufacturing overhead is an indirect cost)
The difficulties exist because there is no clear method of measurement to count these particular expenses. Allocation base is used as some sort of prediction of for the cost.
Let's take a look at machine-hours as an example.
The cost of machine-hours supposed to be based on the deterioration of the machine after being used to produce the goods. But you can't really know how much a machine deteriorate after you use it. In order to count this, companys will allocate numbers of goods its produces and allocate it to the calculation of the deterioration. (for example, the company can assume that the machine will siffer $1,000 worth of damage everytime it produced 10,000 goods)
A decrease in the price of eggs from $1.50 to $1.30 per dozen resulted in an increase in egg purchases in two cities. In Philadelphia, daily egg purchases increased from 6000 to 8000 dozens; in nearby Dover, Delaware, daily egg purchases increased from 300 to 400 dozens. The price elasticity of demand is therefore _________.a. greater in the smaller city as would be expected. b. certainly affected by population differences in different markets. c. the same in Philadelphia as in Dover. d. lower in the smaller city as would be expected.
c. the same in Philadelphia as in Dover.
Price elasticity of demand = Change in quantity of demand / Change in the price of product
Price elasticity of demand = (( 6000-8000 ) / 6000 ) / (( $1.5 - $1.3 ) / 1.5 )
Price elasticity of demand = 0.3333 / 0.1333
Price elasticity of demand = -2.5
In nearby Dover
Price elasticity of demand = (( 300 - 400 ) / 300 ) / (( $1.5 - $1.3 ) / 1.5 )
Price elasticity of demand = 0.3333 / 0.1333
Price elasticity of demand = -2.5
The Price elasticity is the same in Philadelphia and Dover So the Correct option is c. the same in Philadelphia as in Dover.
When an individual or organization acquires enough stock ownership and/or the ability to vote on behalf of other shareholders to replace the board of directors against their will, it is known as _______.
a hostile takeover
FIN DSM Chapter 1
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Bank 'n' Roll, Inc. paid $55,000 to employees who worked this month for $30,000 and last month fro $25,000 (recorded last month as a liability in Accrued Expenses Payable). The entry to record the payments includes a __________.
Accrued Expenses Payable $25,000
Salary Expense $30,000
$30,000 is the expense of current month so it's been charged to Salary expense account directly. $25,000 is the accrued expense of last month which was recorded as liability in Accrued Expenses Payable account. A debit entry for Expense and Payment of liability and credit for the payment of cash.
Thornton, Inc. needs to invest five million Nepalese rupees in its Nepalese subsidiary to support local operations. Thornton would like its subsidiary to repay the rupees in one year. Thornton would like to engage in a swap transaction. Thus, Thornton would:a. convert the rupees to dollars in the spot market today and convert rupees to dollars in one year at today's forward rate.b. convert the dollars to rupees in the spot market today and convert dollars to rupees in one year at the prevailing spot rate.c. convert the dollars to rupees in the spot market today and convert rupees to dollars in one year at today's forward rate.d. convert the dollars to rupees in the spot market today and convert rupees to dollars in one year at the prevailing spot rate.
c. convert the dollars to rupees in the spot market today and convert rupees to dollars in one year at today's forward rate.
In the given case, Thornton requires to buy foreign currency i.e Nepalese rupees. So today, it needs to sell it's own currency i.e USD at current spot rate and purchase 5 million Nepalese rupees in return.
Now, since it will be in receipt of Nepalese rupees after one year and since US Dollar being a stronger currency, it is exposed to risk in case of US Dollar further strengthens over the period, the proceeds upon conversion would be lesser, resulting into a loss.
To hedge it's position against such a risk of currency fluctuation, Thornton would enter into a one year forward contract wherein it'll sell Nepalese rupees received after one year at a predetermined forward rate today and thereby limit it's loss.
A Post Closing Trial Balance Is A List Of Permanent Accounts And Their Balances Afterclosing Entries? ›
A post closing trial balance is a list of permanent accounts and their balances afterclosing entries have been journalized and recorded in the accounting system. These accounts will be carried forward and become the opening balances for the next accounting period.What is an post closing trial balance? ›
A post-closing trial balance is a listing of all balance sheet accounts containing non-zero balances at the end of a reporting period. The post-closing trial balance is used to verify that the total of all debit balances equals the total of all credit balances, which should net to zero.Is a post closing trial balance a list of permanent accounts and their balances after all closing entries True False? ›
Answer: True Post Closing Trial Balance is Prepared Afte…Is post closing trial balance closing entries? ›
Post-closing trial balance: The post-closing trial balance is run after closing entries have been completed and serves two purposes. It ensures that debits and credits match while also ensuring that temporary account balances have been reset to zero to begin the new accounting period.What is a post-closing trial balance quizlet? ›
post-closing trial balance. the series of accounting activities included in recording financial information for a fiscal period. accounting cycle. The ending account balances of permanent accounts for one fiscal period are the beginning account balances for the next fiscal period.What are the permanent accounts? ›
Permanent accounts are the ones that continue to record the cumulative balances over time. Accounts receivable is an example of permanent accounts. Other examples of permanent accounts are—asset, liability, equity, accounts payable, inventory, and investments.Is a list of all permanent accounts and their balances after all closing? ›
Answer and Explanation: A list of accounts and their balances at the end of the period, after journalizing and posting the closing entries, is called a post-closing trial balance.Will the post closing trial balance show both temporary and permanent accounts? ›
A post closing trial balance is a trial balance which is prepared after all the temporary accounts in the general ledger have been closed. The post closing trial balance shows the total balance of permanent accounts at thee end of the reporting period.Does a post closing trial balance show the accounts that are permanent or real? ›
A Post-Closing Trial Balance shows the accounts that are permanent or real. These are accounts that can be seen in your balance sheet. The post-closing trial balance is prepared to test if the debit balances equal the credit balances after closing entries are considered.Which of the following accounts is not listed in a post closing trial balance? ›
As a result, the Dividend account will not appear on the post-closing trial balance.
A trial balance summarises the closing balance of the different general ledgers of the company, while a balance sheet summarises the total liabilities, assets, and shareholder's equity in the company.What is the pre and post closing trial balance? ›
The trial balance may be pre-closing or post-closing. A pre-closing trial balance includes balances of both temporary and permanent accounts, and a post-closing trial balance includes the company's closing entries.What is the major purpose of a post closing trial balance ______? ›
The post-closing trial balance is prepared to ensure that total debits and total credit are equal after the closing procedure.What does the post closing trial balance only list trial balances with? ›
A listing of all of the accounts in the general ledger with account balances after the closing entries have been posted. This means that the listing would consist of only the balance sheet accounts with balances.What are the 3 permanent accounts? ›
Include asset, liability, and equity accounts. Don't close at the end of an accounting period. Are reported on the balance sheet.What are the 3 types of permanent accounts? ›
All accounts that are aggregated into the balance sheet are considered permanent accounts; these are the asset accounts, liability accounts, and equity accounts.What are the permanent accounts on a balance sheet? ›
What is a permanent account? A permanent account or a real account is an account whose balance doesn't reset to zero at the end of the accounting period. Instead, the balance is cumulative and carries over from one accounting period to the next. Some common permanent accounts are asset, equity and liability accounts.What contains a list of permanent accounts after the adjusting and closing entries? ›
The post-closing trial balance is the report that lists all the accounts of a company and their balances after all adjustments and closing entries have been made.What accounts remain after the closing process? ›
Permanent accounts are those that appear on the balance sheet, such as asset, liability, and equity accounts. Examples of permanent accounts are cash, marketable securities, accounts receivable, fixed assets, accounts payable, and common stock.What is the list of closing accounts? ›
There are four closing entries; closing revenues to income summary, closing expenses to income summary, closing income summary to retained earnings, and close dividends to retained earnings.
A closing entry entails resetting the balances of temporary accounts and permanent accounts, in which the balance of temporary accounts is zero and the balance of the permanent accounts increase.Are temporary or permanent accounts closed? ›
Temporary accounts, which are also called nominal accounts, are company accounts whose balances are not carried over from one accounting period to another, but are closed, or transferred, to permanent accounts at the end of an accounting period.Which of the following statements is true regarding the post-closing trial balance? ›
Correct Answer: A) Its debits must equal its credits
In every trial balance, including the post-closing trial balance, debits must...
Temporary accounts would not appear on the post-closing trial balance as those accounts have a zero balance after closing.Which of the following accounts is listed in a post-closing trail balance? ›
Answer and Explanation: a. Salaries payable is listed on the post-closing trial balance. Salaries payable is a liability account and carries a balance after closing as the salaries accrued will be paid in the next period.Which account is not a permanent account? ›
Generally, the balance sheet accounts are permanent accounts, except for the owner's drawing account which is a balance sheet account and a temporary account.Which of the items below will not be reflected in the post-closing trial balance? ›
Post-Closing Trial Balance
The post-closing balance includes only balance sheet accounts. You should not include income statement accounts such as the revenue and operating expense accounts. Other accounts such as tax accounts, interest and donations do not belong on a post-closing trial balance report.
Answer and Explanation: Merchandise inventory account and supplies account will be reflected in the post-closing trial balance. It will record the unsold goods of the merchandise and unused supplies.What is a post closing? ›
“Post Closing” is when the title company dots the i's and crosses the t's. This is where all of the documents signed at the closing table are properly filed and/or mailed to the appropriate parties and all necessary payments as itemized on the settlement statement (HUD) are sent out as scheduled.What goes on pre closing trial balance? ›
The Year-End Report No. 7, Pre-Closing Trial Balance, lists the general ledger account balances for real and nominal accounts, including accruals and adjustments, before the nominal accounts are closed to fund balance.
For example, the positive or negative amount that you have in an account at the end of June 30, say Rs. 10,000 will be the closing balance for that account. Now, this amount will be the same at the start of July 1 for that account and it will become the opening balance on July 1.What is the difference between a trial balance and a post-closing trial balance? ›
The main difference between a trial balance and a post-closing trial balance is that the post-closing trial balance includes the balances of all accounts in the general ledger, while the trial balance only includes the balances of those accounts that have been adjusted.What is the difference between pre and post-closing trial balance? ›
The trial balance may be pre-closing or post-closing. A pre-closing trial balance includes balances of both temporary and permanent accounts, and a post-closing trial balance includes the company's closing entries.What is an example of a post-closing entry? ›
For example, if the business had $100,000 in expenses and $150,000 in revenues, the business had a gain of $50,000. This is recorded as a closing entry by debiting the revenue account $150,000, crediting the expense account $100,000 and crediting retained earnings $50,000.What is the difference between a balance sheet and a post-closing trial balance? ›
A trial balance summarises the closing balance of the different general ledgers of the company, while a balance sheet summarises the total liabilities, assets, and shareholder's equity in the company.What type of accounts are left on the post closing trial balance? ›
Only permanent account balances should appear on the post-closing trial balance.What does post closing mean? ›
“Post Closing” is when the title company dots the i's and crosses the t's. This is where all of the documents signed at the closing table are properly filed and/or mailed to the appropriate parties and all necessary payments as itemized on the settlement statement (HUD) are sent out as scheduled.What is pre closing vs post closing? ›
First, pre-closing possession occurs when a purchaser takes possession of a property sometime before the real estate closing. Post-closing possession occurs when a seller retains possession of the property for some period of time after closing.What is the difference between closing and post closing? ›
What is Mortgage Post-closing? Post-closing is a step that follows the mortgage closing process. In this stage, the closed loan package is monitored to ensure all trailing documents are gathered and processed and all investor guidelines (tax, insurance, etc.) are met for loan saleability.