Reversing entries are optional.

A company borrows $125,000 from the Arctic Bank and receives the loan proceeds in cash. This represents a(n):

After posting the entries to close all revenue and expense accounts, the Income Summary account of Cleaver Auto Services has a $4,000 debit balance. This result implies that Cleaver earned a net income of $4,000.

A company made no adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31. Which of the following statements is true?

Tony’s TV Repairs receives $1,500 from a client billed in a previous month for services provided. Which of the following general journal entries will Tony’s TV Repairs make to record this transaction?

Financial statements can be prepared directly from the information in the adjusted trial balance.

The balance sheet reports the financial position of a company at a point in time.

Andrea Apple opened Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company’s books: Andrea invested $13,500 cash in the business in exchange for common stock. Andrea contributed $20,000 of photography equipment to the business. The company paid $2,100 cash for an insurance policy covering the next 24 months. The company received $5,700 cash for services provided during January. The company purchased $6,200 of office equipment on credit. The company provided $2,750 of services to customers on account. The company paid cash of $1,500 for monthly rent. The company paid $3,100 on the office equipment purchased in transaction #5 above. Paid $275 cash for January utilities. Based on this information, the balance in the cash account at the end of January would be:

In preparing statements from the adjusted trial balance, the balance sheet must be prepared first.

At the beginning of the current year, Nashua Company’s total assets were $248,000 and its total liabilities were $175,000. During the year, the company reported total revenues of $93,000, total expenses of $76,000 and dividends of $5,000. There were no other changes in equity during the year and total assets at the end of the year were $260,000. Nashua Company’s debt ratio at the end of the current year is: