Chapter 4 (Week 3)

Question 1

Closing entries

Answer 1

Journal entries posted at the end of an accounting period to reset temporary accounts to zero
Recorded in the general journal

Question 2

What accounts are closed in closing entries?

Answer 2

Temporary accounts
- Revenue
- Expense
- Dividends

Question 3

Reversing entry

Answer 3

Exact opposite of the adjusting entry made in the previous period
It is done at the start of an accounting period to reverse the adjusting entry

Question 4

Intangible assets

Answer 4

Long lived assets that don’t have physical substance yet often are very valuable

Question 5

Property plant and Equipment

Answer 5

Assets with relatively long useful lives that a company is currently using in operating the business

Question 6

Long term investments

Answer 6

Assets a company plans to hold for an extended period, usually longer than one year, to generate income or gain value over time
- Investment in shares and bonds
- Non current assts
- Long term notes receivables

Question 7

Current assets

Answer 7

Assets that a company expects to convert to cash or use up within one year

Question 8

Non current liabilities

Answer 8

Obligations that a company expects to pay after one year
- Notes, mortgages, bonds payable

Question 9

Current liabilities

Answer 9

Obligations that the company is to pay within the coming year or its operating cycle, whichever is longer