1) How are leasehold improvements classified in a classified balance sheet. Choo

Question

1) How are leasehold improvements classified in a classified balance sheet.
Choose one.
A) Long terms assets.
B) They are not classified.
C) Current assets.

2) Which of the following account for the difference between the
adjusted trial balance and the post closing trial balance?
Choose two.
A) Permanent accounts are excluded.
B) The retained earnings account is closed out.
C) The retained earnings account is properly updated.
D) Temporary accounts are excluded.

3) Which of the following are prepared from the worksheet?
Choose three.
A) Statement of retained earnings.
B) Income statement
C) Balance sheet
D) Bank statement
E) Trial balance

4) Put the headings in the order in which they are normally
found in a worksheet.
A) Trial balance
B) Adjustments
C) Income statement
D) Statement of retained earnings
E) Adjusted trial balance
F) Balance sheet

Can you explain the answers.

Explanation / Answer

Questin 1 OPTION A

A classified balance sheet presents information about an entity's assets, liabilities, and shareholders' equity that is aggregated (or "classified") into subcategories of accounts. It is extremely useful to include classifications, since information is then organized into a format that is more readable than a simple listing of all the accounts that comprise a balance sheet. When information is aggregated in this manner, a balance sheet user may find that useful information can be extracted more readily than would be the case if an overwhelming number of line items were presented. The most common classifications used within a classified balance sheet are:

Fixed assets generally implies

So leasehold improvements are classified under fixed assets that is, long term assets.

Question 2 OPTION A and OPTION C

Once the income statement accounts have been closed, net income is determined and dividends for the period are subtracted from net income. The resulting amount is considered retained earnings, or the amount of funds still on hand after paying for all expenses. A company can choose to keep those funds for future use, pay back investors or pay towards the principal of notes or accounts payable. The retained earnings reported on the adjusted trial balance is the amount left over from the previous period, whereas the amount reported on the post-closing trial balance includes the previous amount plus the retained earnings for the current period.

Question 3 Option A,B,C

Worksheets are prepared at the end of an accounting period and usually include a list of accounts, account balances, adjustments to each account, and each account’s adjusted balance all sorted in financial statement order. As you can imagine, after a worksheet is completely filled out, preparing financial statements manually is quite simple. Most of the preparation work goes into drafting the worksheets.

So financial statement include balance sheet,income statement,statement of retained earnings,cash flow statement.

Question 4 OPTION A,B,E,C,D,F.

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