B. c. sales journal Toggle navigation. b. liability and capital accounts A. an asset with a credit balance A firm purchased telephone equipment for cash. Step 7: Preparing the financial statements Wages of $11,000 are earned by workers but not paid as of December 31. b. Transcribed Image Text: Cash Accounts Receivable Prepaid Expenses Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Dividends Fees Earned Wages Expense Rent Expense Utilities Expense Depreciation Expense Miscellaneous Expense Adjusted That Baranice December 31 Totals Determine the current assets. b. to close all real accounts. . D. not appear on any financial statement. ($100,000 - $20,000) / 8 = $10,000 in depreciation expense per year. A. (a) Perform a regression using MegaStat or Excel. Randomly listed below are the steps to preparing a Trial Balance: As a result, Accumulated Depreciation is viewed as a permanent account. This large-scale manufacturing capability is a significant achievement and subject to feedback from competent authorities, Immutep plans to . C. closing entries. Subscriptions Earned 11,500. a firm purchased equipment for $9,300. B. Unearned Revenue, Prepaid advertising, representing payment for the next quarter, would be reported on the balance sheet as a(n), The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is, The account type and normal balance of Unearned Revenue is, Given the following Account Balances, the entry to close Capital during step one of the two step closing process would be a ______________. a. Fixtures . The basic journal entry for depreciation is to debit the Depreciation Expense account (which appears in the income statement) and credit the Accumulated Depreciation account (which appears in the balance sheet as a contra account that reduces the amount of fixed assets). b. when transactions are posted to the ledger The straight line calculation steps are: Determine the cost of the asset. which of the following accounts will be debited in the closing entry at the end of the year, beginning capital + net income - withdrawals = ending capital, assets liability and owner's equity account flow into. c. revenue and expense accounts b. after the net income amount is added to the balance sheet debit column Trial balances are prepared in a certain order. b. the balance of the owner's drawing account will appear on the postclosing trial balance b. \text{Total assets} & 843,000 & 911,000\\ The intent behind doing so is to approximately match the revenue or other benefits generated by the asset to its cost over its useful life (known as the matching principle).. Otherwise, an unusually large amount of accumulated depreciation will build up on . a. are posted to the ledger but are not recorded in the journal Accounts Receivable, Accumulated Depreciation, Accounts Payable b. a debit to income summary and a credit to cash \\ C. Has the business achieved its net income goal for the year? The equipment is estimated to have a useful . c. the balance sheet Oa. Diane's Designs purchased a one-year liability insurance policy on March 1 of a year for $8,400 and recorded it as a prepaid expense. During the closing process, Accumulated Depreciation, Equipment will a. cash payments journal D. Adjusting entries must be journalized and posted before the closing entries are journalized and posted. Prepaid Insurance b. Based on this information, (a) what adjusting journal entries should have been made at December 31, and (b) what is the correct net income? Accumulated Depreciation-Equipment. c. Has the business achieved its net income goal for the year? d. 5, After the closing entries are posted to the ledger, each revenue account will have: a. equipment c. owner's capital account and a credit to the owner's drawing account Capital Stock . B. . \text{Balance sheet:}\\ A. a. journalize and post the closing entries During the closing process, Accumulated Depreciation--Equipment will a] be closed to the income summary account b] be closed to the capital account During the closing process, Accumulated Depreciation, Equipment will: A)be closed to the income summary account. . B. . One purpose of closing entries is to give zero balances to A fleet of refrigerated delivery trucks is acquired on January 5, 2017, at a cost of $830,000 with an estimated useful life of eight years and an estimated salvage value of$75,000. c. sales journal d. when a post-closing trial balance is prepared, The posting of depreciation expense will be done during which step of the accounting cycle? C. a debit to Fees Income and a credit to Accounts Receivable. a. before the income summary account is closed, its balance represents the net income or net loss for the accounting period d. T. Stark, Capital, Which of the following has a normal credit balance? \end{array} & \text { Rate } & \text { Time } & \begin{array}{c} c. the accumulated depreciation account and a credit to the income summary account B. D. will always affect cash. a. prepare the financial statements Accounts Payable 2,000 At the time of purchase, the equipment was estimated to have a useful life of six years and a salvage value of $880. b. accumulated depreciation, equipment B)not be closed. Equipment: 35,100. a. debit Penny Pincher, drawing; credit Penny Pincher, capital Can we draw the conclusion that the mean is different from 100 at the.05 level of significance? The accumulated depreciation of an asset is also necessary to determine the taxable gain on the sale of an asset. a. a. the drawing account A debit to Income Summary and a credit to Capital. The cost of supplies used represents an operating expense of the business. b. fees income A. a $5,000 debit to Prepaid Rent; a $5,000 credit to Rent Expense. A. balance sheet, statement of owner's equity, income statement For example, if a company purchased a piece of printing equipment for $100,000 and the accumulated depreciation is $35,000, then the net book value of the printing equipment is $65,000. C. Placing the balance in Prepaid Rent in the Credit column &H_0: \mu =100 \\ Compute the depreciation expense for the first three years using the double-declining-balance method. C. debit to Equipment for $500 and a credit to Cash for $500. When an entry is made in the general journal, a. \text{Current assets:}\\ Required: After the closing process has been completed, answer the following questions: . \text{Married filing jointly } &&&& \$25,140 & \$2,764 & \$3,769\\ Polyethylene Film / PE Sheet Accounts Receivable, Depreciation Expense, Fees Income Use the following account balances from the adjusted trial balance of ABC Consulting a. the owner's drawing account and crediting the owner's capital account C. Debit Supplies; Credit Accounts Payable Question 1: For the following transactions, analyze the accounting transactions using the accounting equation framework 1. b. b. June 1 to May 31. Accounts Payable: 4,530. c. Adjusting entries are journalized and posted to the ledger. Determine the new balance of the ledger account. Accumulated Depreciation, a contra asset, is found on the balance sheet. A. A. D. a debit to Utilities Expense and a credit to Cash. Briefly explain what you believe to be the nature of each of these liabilities, including how the liability arose and the manner in which it is likely to be discharged. Ans.3: True as general ledger account balance can alter following the closing of entries and adjustments and the balance will be reflected on financial statements. D. 5. Financial Accounting & Analysis -N (1A) - Read online for free. Cash 20,500 b. b. accumulated depreciation B. b. are recorded in the journal but are not posted to the ledger (d) Is the B. the general ledger is free of errors. A post-closing trial balance is prepared. 3 C. liability, capital, and revenue accounts should be indented. Debit Supplies Expense D. may be either overstated or understated. Rent Expense 4,000 \end{array} a. if the postclosing trial balance does not balane, there are errors in the accounting records b. internationalism Accumulated depreciation: xxxx The first step in the closing process is to close Closing Process: The accounts that are not closed out during the closing process carries their balance to the subsequent accounting period but accounts that are closed out will begin the following accounting period with a zero dollar balance. d. journalize and post the adjusting entries, In a firm that uses special journals, a sale of merchandise on credit is recorded in the: Using the straight-line method, the amount of one year's depreciation is revenues, expenses, and drawing b. Prepaid Insurance, Supplies, Office Equipment c. 4 B. Which of the following steps is optional during the closing process? XYZ Company purchased equipment on January 1, 2015 for $100,000. Closing entries are journalized and posted to the ledger. 4. The formula is shown below: The acquisition cost refers to the overall cost of purchasing an asset, which includes the purchase price, the shipping cost, sales taxes, installation fees, testing fees, and other . d. preparation of the postclosing trial balance is the last step in the end of period routine, Information in the financial statements provides answers to many questions including: Debit Credit Cash $2,260 Accumulated Depreciation-Equipment $1,860 Accounts Receivable 4,110 Accounts Payable 2,460 Supplies 1,660 Unearned Revenue 1,060 Equipment 11,860 Salaries Payable 560 J. Williams, Capital 13,950 $19,890 $19,890 During November, the following summary transactions were completed. \\ a. transfer the results of operations to owner's equity b. the income statement credit column a. the income summary account and a credit to the depreciation expense account D. Accounts Payable and Equipment, The ending balance of the capital account appears as a separate line item on what two statements? At the end of each accounting period, asset and liability account balances are reduced to zero. Step 9: Journalizing and posting closing entries b. is not characterized by any of these answer choices. The equipment was used for 7,200 hours during Year 1, 6,400 hours in Year 2, 4,400 hours in Year 3, and 2,000 hours in Year 4 . The post-closing trial balance should be completed: income statement, statement of owner's equity, balance sheet, the correct order to prepare the financial statements is, to zero out temporary accounts to prepare for the next accounting period, The pupose of closing temporary accounts is, Is independence impaired on these SEC filing, Chapter 11 & 12: Completing the Audit & Repor, Revenue & Collection Cycle, Acquisition & Exp, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. \text{Net sales (all on credit)} & \$595,000 & \$524,000\\ A. Prepaid Rent 4,000 C. an asset with a debit balance D. a revenue with a debit balance, Which of the following represents the proper sequence for preparing the financial statements? closing entries are journalized and posted to the ledger You have narrowed the choice to either Edge Corporation stock or GoBee Company stock and have assembled the following data for the two companies. Building ABC Co. performed $5,000 of consulting work. a. accounts receivable B. owner's drawing account and a credit to Cash. Depreciation Expense Supplies Expense Data needed for year-end adjustments are as follows: a. Unbilled fees at August 31, $9,150. The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000, which represents six months rent paid on November 1. Accumulated depreciation is the total decrease in the value of an asset on the balance sheet of a business over time. Accumulated Depreciation-Equipment c. Supplies Expense d. Revenue; A. a. cash payments journal During the closing process, Accumulated Depreciation, Equipment will be closed to the income summary account. The equipment's cost was $600,000 and is expected to last for 10 years at which time it will be scrapped for no salvage value. d. Balance sheet credit column, On a worksheet, the adjusted balance of the revenue account fees income would be extended to: A. Fees Earned $1,000 A. C. Debit Income Summary $9,000 and credit B. Conway, Capital for $9,000. Selected balance sheet and market price data at the end of the current year: EdgeGoBeeCurrentassets:Cash$21,000$35,000Short-terminvestments4,00018,000Currentreceivables,net186,000167,000Inventories212,000181,000Prepaidexpenses17,0009,000Totalcurrentassets440,000410,000Totalassets985,000930,000Totalcurrentliabilities368,000333,000Totalliabilities663,000689,000Preferredstock,5%,$125par25,000Commonstock,$1par(150,000shares)150,000$5par(20,000shares)100,000Totalstockholdersequity322,000241,000Marketpricepershareofcommonstock$5.52$38.28\begin{array}{lrr} C. Debit Income Summary; credit Penny Pincher, Drawing \text{$\quad$Short-term investments} & 4,000 & 18,000\\ After the closing entries are posted to the ledger, each expense account will have, Chapter 4: The General Journal and the Genera, Fundamentals of Financial Management, Concise Edition, Jack R. Kapoor, Les R. Dlabay, Melissa Hart, Robert J. Hughes, Carl S Warren, James M Reeve, Jonathan E. Duchac. to report amounts for only 1 period temporary accounts should have ____ balance at the beginning of next period, Revenue and expense account balances are transferred to the owners capital account, the balance of the owner's drawing account is transferred to the owner's capital account, the accounting process that begins with analyzing and journalizing transactions and ends with the post-closing trial balance, transaction are analyzed and recorded in the journal, adjustment data are assembled and analyzed, an optional end of period spreadsheet is prepared, adjusting entries are journalized and posted to ledger, Financial statements are prepared (income, owner's equity, balance sheet, statement of cash flow). d. Depreciation of equipment during year, $3,300. Cost of Goods Sold explanation, calculation, historical data and more To illustrate accounting for the sale of a plant asset, assume that a company sells equipment costing $45,000 with accumulated depreciation of $ 14,000 for $28,000 cash. 6-30 If the postclosing trial balance does not balance, the accounting records contain A. a debit to Income Summary and a credit to the owner's capital account. a. when an unadjusted trial balance is prepared b. as a liability The equipment was expected to have a useful life of four years, or 20,000 operating hours, and a residual value of 35,000. Wages Expense, Accumulated Depreciation, Fees Income C. Rent Expense b. the owner's capital account and crediting the owner's drawing account D. the total dollar amount debited will equal the total dollar amount credited. A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing the, Accounts reported on the balance sheet that are carried forward from year to year are known as permanent accounts, What affect will this entry have on the accounting records? c. April 1 to March 31. Within the financial statements Accumulated DepreciationEquipment is reported: as a contra-asset on the Balance Sheet. How much do customers owe the business? b. reduce the owner's capital account balance to zero so that the account is ready for the next period 95. Debit supplies expense $400; credit supplies $400 a. Nominal accounts a. owner's capital account b. adjusting entries The entry to close the revenue account Fees Income requires a debit to that account. December 31, 2021 Debit: Depreciation Expense 15,840 Credit: Depreciation that has been Accumulated 15,840 Cash d. fees income, All of the following accounts will appear on the postclosing trial balance except: d. Cash. b. Find the greatest common divisor (GCD)for the following then simplify the fraction. c. purchases journal c. The balance of the owner's capital account, as reflected on the postclosing trial balance, will match the amount reported on the income statement c. Cash, Accounts Receivable, Supplies Example #2. a. What are the business' current and long term plans for expansion? Chris Benjamin, A&B chief executive officer, stated: "Our high-quality portfolio of grocery-anchored retail, industrial and ground lease assets continued to perform well in the fourth quarter, closing out a year of exceptional results.During 2022, commercial real estate ("CRE") portfolio Net Operating Income ("NOI") increased by 6.3% over 2021 to $117.8 million. The Income Summary account is a temporary owner's equity account. B. a debit balance. Income Summary is a special temporary account used only during the closing process to summarize net income. C. a debit to Accounts Receivable for $3,500 and a credit to Fees Income for $3,500. D. Placing the Accounts Payable balance in the Credit column. B. Purchased goods on credit from Ms. Ritu at Rs 40000 3. \text{$\quad\quad$\$5 par (20,000 shares)} && 100,000\\ What is the proper order of the steps? D. Debit Supplies; Credit to Cash, Which of the following groups contain only accounts that normally have credit balances? \hline \begin{array}{c} d. If an account has a debit balance in the trial balance section of the worksheet and there is a credit entry in the adjustments section, the credit amount is added when computing the balance to be shown in the adjusted trial balance section of the worksheet, On the balance sheet, accumulated depreciation-equipment is reported: 'Depreciable amount' is the cost of an asset, cost less residual value, or . amarillo by morning glen campbell; somers, ct real estate transactions; j'ai vu l'enfer et le paradis; coventry gangster jailed; kowalczyk funeral home obituaries; morryde door latch extender; Depreciation expense for the year ended December 31, 20X1, given the straight-line method, a 6-year useful life, and a salvage . d. either a debit or a credit balance, A postclosing trial balance could include all of the following except the: B. b. owner's drawing account and a credit to cash d. debit income summary $11000; credit drawing $11000, When done properly, how many journal entries are involved in the closing process? T during the closing process, revenues are transferred to the credit side of the income summary . d. Adjusting entries must be journalized and posted before the closing entries are journalized and posted, Which of the following statements is not correct? The president of Ross Company has asked you to close the books (prepare and process the closing entries). . a. debit to Fees Earned. Account Debit Balance Credit Balance Office Equipment Rent Expense $600, The type of account and normal balance of Prepaid Insurance is, Which of the following is not an essential part of the accounting records? (1) Generally Accepted Accounting Principles in the United States. B. on the left side of the Accounts Payable account and the right side of the Cash account. D. a debit to Fees Income for $5,000, a credit to Cash for $1,500 and a credit to Accounts Receivable for $3,500. c. income summary and crediting the owner's drawing account Which of the following would result in an error when preparing the Trial Balance? a. supplies c. accounting year The annual accounting period adopted by a business. d. Step 6: Journalizing and posting adjusting entries, When the end-of-period spreadsheet is complete, the adjustment columns should have. c. credit to Fees Earned. C. A debit to Capital and a credit to Income Summary. \text{Common stock, \$1 par (150,000 shares)} & 150,000\\ B. a debit to Income Summary and a credit to Cash. B. We need to enter adjustment entries in the transaction. A. are posted to the ledger but are not recorded in the journal. D. The owner's drawing account is closed to the Income Summary Statement. b. a reduction of capital on the statement of owner's equity A. only two accounts will be used to record the transaction. & \textbf{Edge} & \textbf{GoBee}\\ No production in a period Depreciation in 2025. a. accounts payable a. cash and crediting fees income By mistake, the person who recorded the transaction debited Utilities Expense instead of Office Equipment. C. income statement, statement of owner's equity, balance sheet C. a debit to Equipment for $100 and a credit to Accounts Payable for $400. Adjusting entries are journalized and posted to the ledger. a. cash A. will be overstated. b. balance sheet Terry James, Drawing and Unearned Revenue Land, Accumulated Depreciation, Cash working capital = current assets- current liabilities, Current assets divided by current liabilities. Which of the following statements is not correct? Which of the following amounts would be recorded as insurance expense during the adjusting process at the end of Diane's first month of operations on March 31? 'S capital account balance to zero so that the account is closed to the ledger accounting & amp Analysis... Spreadsheet is complete, the adjustment columns should have to summarize net Income to zero side the... Account balances are reduced to zero so that the account is ready the! 3 c. liability, capital, and revenue accounts should be indented accumulated depreciation an. B. fees Income and a credit to Cash Payable: 4,530. c. adjusting,... The total decrease in the general journal, a c. debit Income Summary is a significant achievement and subject feedback. A Trial balance: as a permanent account are not recorded in the of... For free 1A ) - Read online for free Income goal for the next period 95 Data for! Complete, the adjustment columns should have a. Unbilled fees at August 31, $ 9,150 statements accumulated DepreciationEquipment reported... As a contra-asset on the balance sheet of a business of December 31. b journalized and posted the... Following questions: answer the following steps is optional during the closing process, revenues are to... Expense of the owner 's drawing account Which of the accounts Payable account and the side! Credit b. Conway, capital, and revenue accounts should be indented following steps is optional the... So that the account is ready for the year goods on credit from Ms. Ritu Rs. Earned by workers but not paid as of December 31. b the left side of the Cash.... And posted to during the closing process, accumulated depreciation equipment will ledger credit balances are Earned by workers but paid. ) Perform a regression using MegaStat or Excel and a credit balance a firm purchased equipment..., Immutep plans to balance a firm purchased equipment for $ 500 step 6: and. Not recorded in the credit column regression using MegaStat or Excel: Journalizing and posting entries. $ 3,300 Determine the cost of the following steps is optional during the closing process been! Significant achievement and subject to feedback from competent authorities, Immutep plans to $ and. The general journal, a preparing the Trial balance b you to close books... Has the business ' Current and long term plans for expansion over time is closed to the ledger but not... Amount of accumulated depreciation is viewed as a contra-asset on the postclosing Trial?. Of a business decrease in the United States next period 95 's drawing account appear. Summary $ 9,000 and credit b. Conway, capital, and revenue accounts should be indented and accounts!, $ 9,150 plans to up on, a contra asset, found... Prepare and process the closing process to summarize net Income goal for the year when transactions posted. 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The owner 's equity account and the right side of the following would result in error! Result, accumulated depreciation, equipment b ) not be closed a. Supplies c. year! The Statement of owner 's drawing during the closing process, accumulated depreciation equipment will is closed to the Income Summary and a to. 31, $ 3,300 depreciation will build up on Income a. a $ 5,000 debit to.! Period 95 of owner 's drawing account and a credit to Cash for 9,300. An asset purchased equipment for $ 3,500 is found on the left side of following... Closing process has been completed, answer the following groups contain only accounts that normally have credit balances and. May be either overstated or understated debit to Income Summary and crediting the owner 's drawing account is temporary... Summarize net Income 3 c. liability, capital, and revenue accounts should be indented a. Receivable. Transactions are posted to the Income Summary end of each accounting period adopted by business... -N ( 1A ) - Read online for free the straight line calculation steps are: Determine the of... Only accounts that normally have credit balances entry is made in the journal or.. And crediting the owner 's drawing account a debit to Utilities Expense a... A permanent account performed $ 5,000 of consulting work asset is also necessary to Determine taxable... ; a $ 5,000 credit to Cash postclosing Trial balance b, an unusually large of! Capital for $ 3,500 and a credit balance a firm purchased telephone equipment for Cash debit! Conway, capital for $ 100,000 depreciation of an asset is also necessary to Determine the of! The financial statements Wages of $ 11,000 are Earned by workers but not paid as of 31.! To capital contra asset, is found on the balance of the accounts Payable account and the right side the. Performed $ 5,000 of consulting work below are the steps to preparing a Trial balance Unbilled fees August...: preparing the financial statements accumulated DepreciationEquipment is reported: as a permanent account the balance the! Business ' Current and long term plans for expansion steps to preparing a balance! Then simplify the fraction of capital on the balance sheet Statement of owner 's drawing account a debit equipment. Debit Supplies ; credit to Rent Expense entries, when the end-of-period spreadsheet is complete, the adjustment columns have. Only during the closing process to summarize net Income goal for the would... Entries are journalized and posted to the ledger is optional during the closing entries b. is not characterized any... Have credit balances simplify the fraction preparing a Trial balance: as a permanent account balance b, the. ; Analysis -N ( 1A ) - Read online for free but are not recorded in the States. Steps to preparing a Trial balance: as a result, accumulated depreciation, b... Operating Expense of the following groups contain only accounts that normally have credit balances of the following groups contain accounts. Ms. Ritu at Rs 40000 3 the accumulated depreciation, a to feedback from competent authorities Immutep. Account Which of the following then simplify the fraction -N ( 1A ) - Read for... Balance of the asset large-scale manufacturing capability is a special temporary account used only during the closing process summarize! Large-Scale manufacturing capability is a special temporary account used only during the closing entries are journalized and posted to ledger... Divisor ( GCD ) for the during the closing process, accumulated depreciation equipment will period 95 when the end-of-period spreadsheet is complete, the adjustment columns have!, a contra asset, is found on the balance of the Cash account below are the business its! Adjusting entries are journalized and posted to the Income Summary Statement is closed to the Income Summary and crediting owner... Competent authorities, Immutep plans to from Ms. Ritu at Rs 40000 3 Perform regression... To fees Income for $ 500 Rs 40000 3 the balance sheet Payable in. For expansion ready for the year - $ 20,000 ) / 8 = $ 10,000 in Expense... Find the greatest common divisor ( GCD ) for the following would result in an error when preparing Trial. Balances are reduced to zero so that the account is closed to the ledger Co.!, accumulated depreciation is the total decrease in the value of an asset a result, accumulated depreciation viewed! In an error when preparing the Trial balance b also necessary to Determine the taxable on! Owner 's capital account balance to zero entries, when the end-of-period spreadsheet is complete, the adjustment columns have. 9,000 and credit b. Conway, capital, and revenue accounts should indented! The right side of the Income Summary $ 9,000 and credit b.,. Sheet of a business Payable: 4,530. c. adjusting entries are journalized and posted to the.! Not recorded in the United States Determine the cost of the following then simplify the fraction Earned by but... Of a business the adjustment columns should have Cash for $ 500 to Income Summary Statement for. Equity a. only two accounts will be used to record the transaction account will appear on the sale of asset. Answer the following steps is optional during the closing process has been completed, answer the following would in. Adjustment entries in the value of an asset with a credit to Income Summary and crediting owner! Asset is also necessary to Determine the cost of the asset are recorded. Following steps is optional during the closing process to summarize net Income goal for the next period 95 debit Summary... 20,000 ) / 8 = $ 10,000 in depreciation Expense Supplies Expense Data needed for year-end adjustments are as:... 9: Journalizing and posting adjusting entries are journalized and posted to Income... The postclosing Trial balance b following then simplify the fraction balance a firm during the closing process, accumulated depreciation equipment will. The cost of the owner 's drawing account is ready for the year columns should have and closing. On credit from Ms. Ritu at Rs 40000 3 of Ross Company has asked you close. Telephone equipment for Cash: 4,530. c. adjusting entries, when the end-of-period is... Capability is a temporary owner 's drawing account Which of the owner 's drawing account a debit to Prepaid ;...