Ch04 completing the accounting cycle, intro accounting, 21st edition warren reeve fess eng

ChapterChapter 44
Completing theCompleting the
Accounting CycleAccounting Cycle
Accounting, 21st
Edition
Warren Reeve Fess
PowerPoint Presentation by Douglas Cloud
Professor Emeritus of Accounting
Pepperdine University
© Copyright 2004 South-Western, a division
of Thomson Learning. All rights reserved.
Task Force Image Gallery clip art included in this
electronic presentation is used with the permission of
NVTech Inc.

Some of the action has been automated,
so click the mouse when you see this
lightning bolt in the lower right-hand
corner of the screen. You can point and
click anywhere on the screen.
Some of the action has been automated,
so click the mouse when you see this
lightning bolt in the lower right-hand
corner of the screen. You can point and
click anywhere on the screen.

1. Review the seven basic steps of the accounting cycle.
2. Prepare a work sheet.
3. Prepare financial statements from a work sheet.
4. Prepare adjusting and closing entries from a work sheet.
5. Explain what is meant by the fiscal year and the natural
business year.
6. Analyze and interpret the financial solvency of a
business by computing working capital and the current
ratio.
ObjectivesObjectivesObjectivesObjectives
After studying thisAfter studying this
chapter, you shouldchapter, you should
be able to:be able to:
After studying thisAfter studying this
chapter, you shouldchapter, you should
be able to:be able to:

Seven Basic Steps of the
Accounting Cycle
Seven Basic Steps of the
Accounting Cycle
1. Transactions are analyzed and recorded in the journal.
2. Transactions are posted to the ledger.
3. A trial balance is prepared, adjustment data are
assembled, and an optional work sheet is completed.
4. Financial statements are prepared.
5. Adjusting entries are journalized and posted.
6. Closing entries are journalized and posted.
7. A post-closing trial balance is prepared.

Assets are commonly divided into classes
and that two of these classes are current
assets and property, plant, and equipment.
Assets are commonly divided into classes
and that two of these classes are current
assets and property, plant, and equipment.

That’s correct. Cash and other
assets that are expected to be
converted into cash, sold, or
used up usually in less than a
year are current assets.
That’s correct. Cash and other
assets that are expected to be
converted into cash, sold, or
used up usually in less than a
year are current assets.

For example?For example?
Well… besides cash, there’s
notes receivable, accounts
receivable, supplies, and
other prepaid items.
Well… besides cash, there’s
notes receivable, accounts
receivable, supplies, and
other prepaid items.

So, assets that have a life
over a year are listed under
property, plant, and
equipment.
So, assets that have a life
over a year are listed under
property, plant, and
equipment.
There are some exceptions, but
that’s basically correct. Assets
such as office equipment,
machinery, buildings, and land
would appear under that heading.
There are some exceptions, but
that’s basically correct. Assets
such as office equipment,
machinery, buildings, and land
would appear under that heading.

Liabilities due usually within one
year or less and that are to be paid
out of current assets are called
current liabilities.
Liabilities due usually within one
year or less and that are to be paid
out of current assets are called
current liabilities.
√ Accounts payable
√ Wages payable
√ Interest payable
√ Unearned fees

Liabilities not due for
more than a year usually
are long-term liabilities.
Liabilities not due for
more than a year usually
are long-term liabilities.
Mortgage note
payable
Mortgage payable
Bond payable

The work sheet is a useful
device for understanding the
flow of accounting data from
the unadjusted trial balance to
the financial statements.
The work sheet is a useful
device for understanding the
flow of accounting data from
the unadjusted trial balance to
the financial statements.

The Work SheetThe Work Sheet
Trial Balance
Accounts Dr Cr Dr Cr Dr Cr
Adjustments Adjusted TB
Prepared from the general ledger.
Accounts are listed in the following
order: assets, liabilities, owner’s
equity, revenues, and expenses.
Prepared from the general ledger.
Accounts are listed in the following
order: assets, liabilities, owner’s
equity, revenues, and expenses.

Adjustments are entered here.
Two possibilities:
1. Deferrals – Existing balances are
changed.
2. Accruals – New information is
entered.
Adjustments are entered here.
Two possibilities:
1. Deferrals – Existing balances are
changed.
2. Accruals – New information is
entered.
Trial Balance

Adjustments are combined with
the trial balance. Account
balances are now adjusted.
Adjustments are combined with
the trial balance. Account
balances are now adjusted.
Trial Balance

Cash 2,065
Accounts Receivable 2,220
Supplies 2,000
Prepaid Insurance 2,400
Land 20,000
Office Equipment 1,800
Accounts Payable 900
Unearned Rent 360
Chris Clark, Capital 25,000
Chris Clark, Drawing 4,000
Fees Earned 16,340
Wages Expense 4,275
Rent Expense 1,600
Utilities Expense 985
Supplies Expense 800
Miscellaneous Expense 455
42,600 42,600
Account Title Debit Credit Debit Credit Debit Credit
Adjusted
Trial Balance Adjustments Trial Balance
NetSolutions
Work Sheet
For the Two Months Ended December 31, 2005
The UnadjustedThe Unadjusted
Trial BalanceTrial Balance
The UnadjustedThe Unadjusted
Trial BalanceTrial Balance
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

(a) The(a) The SuppliesSupplies account has a debit ofaccount has a debit of
$2,000. A count of supplies at the end of$2,000. A count of supplies at the end of
the period reveals that $760 is on hand.the period reveals that $760 is on hand.
Therefore, $1,240 in supplies was usedTherefore, $1,240 in supplies was used
during the two-month period.during the two-month period.
(a) The(a) The SuppliesSupplies account has a debit ofaccount has a debit of
$2,000. A count of supplies at the end of$2,000. A count of supplies at the end of
the period reveals that $760 is on hand.the period reveals that $760 is on hand.
Therefore, $1,240 in supplies was usedTherefore, $1,240 in supplies was used
during the two-month period.during the two-month period.

Cash 2,065
Supplies 2,000
Land 20,000
Unearned Rent 360
Fees Earned 16,340
Wages Expense 4,275
Rent Expense 1,600
Supplies Expense 800
42,600 42,600
Adjusted
NetSolutions
Work Sheet
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
(a) 1,240
(a) 1,240

(b)(b)TheThe Prepaid InsurancePrepaid Insurance account has aaccount has a
debit balance of $2,400, whichdebit balance of $2,400, which
represents prepayment of insurance forrepresents prepayment of insurance for
24 months beginning December 1.24 months beginning December 1.
Thus, the insurance expense for thisThus, the insurance expense for this
month is $100 ($2,400 ÷ 24).month is $100 ($2,400 ÷ 24).
(b)(b)TheThe Prepaid InsurancePrepaid Insurance account has aaccount has a
debit balance of $2,400, whichdebit balance of $2,400, which
represents prepayment of insurance forrepresents prepayment of insurance for
24 months beginning December 1.24 months beginning December 1.
Thus, the insurance expense for thisThus, the insurance expense for this
month is $100 ($2,400 ÷ 24).month is $100 ($2,400 ÷ 24).

Cash 2,065
Supplies 2,000 (a) 1,240
Land 20,000
Unearned Rent 360
Fees Earned 16,340
Wages Expense 4,275
Rent Expense 1,600
Supplies Expense 800 (a) 1,240
42,600 42,600
Adjusted
NetSolutions
Work Sheet
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Insurance Expense (b) 100
Accounts are added as needed.
(b) 100

(c) The(c) The Unearned RentUnearned Rent account has a creditaccount has a credit
balance of $360, which represents thebalance of $360, which represents the
receipt of three-months’ rent beginningreceipt of three-months’ rent beginning
with December 1. Thus, the rent revenuewith December 1. Thus, the rent revenue
for December is $120.for December is $120.
(c) The(c) The Unearned RentUnearned Rent account has a creditaccount has a credit
balance of $360, which represents thebalance of $360, which represents the
receipt of three-months’ rent beginningreceipt of three-months’ rent beginning
with December 1. Thus, the rent revenuewith December 1. Thus, the rent revenue
for December is $120.for December is $120.
FOR
REN
T

Cash 2,065
Supplies 2,000 (a) 1,240
Prepaid Insurance 2,400 (b) 100
Land 20,000
Unearned Rent 360
Fees Earned 16,340
Wages Expense 4,275
Rent Expense 1,600
42,600 42,600
Adjusted
NetSolutions
Work Sheet
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
(c) 120
Rent Revenue (c) 120

(d) Wages accrued but not paid at(d) Wages accrued but not paid at
the end of December total $250.the end of December total $250.
(d) Wages accrued but not paid at(d) Wages accrued but not paid at
the end of December total $250.the end of December total $250.

Cash 2,065
Supplies 2,000 (a) 1,240
Land 20,000
Unearned Rent 360 (c) 120
Fees Earned 16,340
Wages Expense 4,275
Rent Expense 1,600
42,600 42,600
Adjusted
NetSolutions
Work Sheet
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Wages Payable (d) 250
(d) 250

(e) Fees accrued at the end of(e) Fees accrued at the end of
December, but not recorded,December, but not recorded,
total $500.total $500.
(e) Fees accrued at the end of(e) Fees accrued at the end of
December, but not recorded,December, but not recorded,
total $500.total $500.

Cash 2,065
Supplies 2,000 (a) 1,240
Land 20,000
Fees Earned 16,340
Wages Expense 4,275 (d) 250
Rent Expense 1,600
42,600 42,600
Adjusted
NetSolutions
Work Sheet
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
(e) 500
(e) 500

(f) Depreciation of the office(f) Depreciation of the office
equipment is $50 for December.equipment is $50 for December.
(f) Depreciation of the office(f) Depreciation of the office
equipment is $50 for December.equipment is $50 for December.

Cash 2,065
Accounts Receivable 2,220 (e) 500
Supplies 2,000 (a) 1,240
Land 20,000
Fees Earned 16,340 (e) 500
Rent Expense 1,600
42,600 42,600
Adjusted
NetSolutions
Work Sheet
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Depreciation Expense (f) 50
Accum. Depreciation (f) 50

Cash 2,065
Supplies 2,000 (a) 1,240
Land 20,000
Rent Expense 1,600
42,600 42,600
Adjusted
NetSolutions
Work Sheet
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
To make more
space, let’s remove
the heading.
To make more
space, let’s remove
the heading.

Cash 2,065
Supplies 2,000 (a) 1,240
Land 20,000
Rent Expense 1,600
42,600 42,600
Adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
2,260 2,260
SummedSummed
andand
ruledruled
SummedSummed
andand
ruledruled
31

Next, the unadjusted Trial
Balance columns and the
Adjustments columns are
combined to determine the
amounts displayed in the
Adjusted Trial Balance.
Next, the unadjusted Trial
Balance columns and the
Adjustments columns are
combined to determine the
amounts displayed in the
Adjusted Trial Balance.

Cash 2,065
Supplies 2,000 (a) 1,240
Land 20,000
Rent Expense 1,600
42,600 42,600
Adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
2,260 2,260
33

Cash 2,065 2,065
Accounts Receivable 2,220 (e) 500 2,720
Supplies 2,000 (a) 1,240 760
Prepaid Insurance 2,400 (b) 100 2,300
Land 20,000 20,000
Office Equipment 1,800 1,800
Accounts Payable 900 900
Unearned Rent 360 (c) 120 240
Chris Clark, Capital 25,000 25,000
Chris Clark, Drawing 4,000 4,000
Fees Earned 16,340 (e) 500 16,840
Wages Expense 4,275 (d) 250 4,525
Rent Expense 1,600 1,600
Utilities Expense 985 985
Supplies Expense 800 (a) 1,240 2,040
Miscellaneous Expense 455 455
42,600 42,600
Adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Insurance Expense (b) 100 100
Rent Revenue (c) 120 120
Wages Payable (d) 250 250
Depreciation Expense (f) 50 50
Accum. Depreciation (f) 50 50
2,260 2,260 43,400 43,400
34

Revenue and expense balances in
the Adjusted Trial Balance column
are extended to the Income
Statement column.
Revenue and expense balances in
the Adjusted Trial Balance column
are extended to the Income
Statement column.
Adjusted TB
Income State. Balance Sheet

Asset, liability, owner’s equity, and
drawing balances in the Adjusted
Trial Balance column are extended
to the Balance Sheet column.
Asset, liability, owner’s equity, and
drawing balances in the Adjusted
Trial Balance column are extended
to the Balance Sheet column.
Adjusted TB
Income State. Balance Sheet

To make room on the slides for
the Income statement and
Balance Sheet columns, the
Trial Balance and Adjustments
columns have been removed.
To make room on the slides for
the Income statement and
Balance Sheet columns, the
Trial Balance and Adjustments
columns have been removed.

Cash 2,065
Supplies 760
Land 20,000
Unearned Rent 240
Fees Earned 16,840
Wages Expense 4,525
Rent Expense 1,600
Supplies Expense 2,040
Adjusted
Trial Balance Income Statement Balance Sheet
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Insurance Expense 100
Rent Revenue 120
Wages Payable 250
Depreciation Expense 50
Accum. Depreciation 50
43,400 43,400
38

Now, let’s extend the balances
from the Adjusted Trial
Balance column.
Now, let’s extend the balances
from the Adjusted Trial
Balance column.

Cash 2,065 2,065
Accounts Receivable 2,720 2,720
Supplies 760 760
Prepaid Insurance 2,300 2,300
Land 20,000 20,000
Unearned Rent 240 240
Fees Earned 16,840 16,840
Wages Expense 4,525 4,525
Supplies Expense 2,040 2,040
Adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Insurance Expense 100 100
Rent Revenue 120 120
Wages Payable 250 250
Depreciation Expense 50 50
Accum. Depreciation 50 50
43,400 43,400
40

These four
columns are
summed.
These four
columns are
summed.

Cash 2,065 2,065
Accounts Receivable 2,720 2,720
Supplies 760 760
Prepaid Insurance 2,300 2,300
Land 20,000 20,000
Fees Earned 16,840 16,840
Wages Expense 4,525 4,525
Supplies Expense 2,040 2,040
Adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Insurance Expense 100 100
Rent Revenue 120 120
Depreciation Expense 50 50
Accum. Depreciation 50 50
43,400 43,400 9,755 16,960 33,645 26,440
42

The difference between the
Income Statement column
totals is the net income (or net
loss) for the period.
Income Statement column
totals is the net income (or net

Balance Sheet column totals
is also the income (or net
Balance Sheet column totals
is also the income (or net

9,755 16,960 33,645 26,440
7,205 7,205
16,960 16,960 33,645 33,645
Income Statement Balance Sheet
Net IncomeNet Income Net IncomeNet Income

NetSolutions
Income Statement
For Two Months Ended December 31, 2005
Fees earned $16,840
Rent revenue 120
Total revenues $16,960
Expenses:
Wages expense $ 4,525
Supplies expense 2,040
Rent expense 1,600
Utilities expense 985
Insurance expense 100
Depreciation expense 50
Miscellaneous expense 455
Total expenses 9,755
Net income $ 7,205
Every amount on this income statement was taken from the
Income Statement column of the work sheet.

NetSolutions
Statement of Owner’s Equity
Chris Clark, Capital, November 1, 2005 $ 0
Investment on November 1, 2005 $25,000
Net income for November and December 7,205
$32,205
Less withdrawals 4,000
Increase in owner’s equity 28,205
Chris Clark, Capital, December 31, 2005 $28,205Either from theEither from the
incomeincome
statement or thestatement or the
work sheet.work sheet.
Either from theEither from the
incomeincome
statement or thestatement or the
work sheet.work sheet.
From theFrom the
Balance SheetBalance Sheet
debit column ofdebit column of
the work sheet.the work sheet.
From theFrom the
Balance SheetBalance Sheet
debit column ofdebit column of
the work sheet.the work sheet.

NetSolutions
Balance Sheet
December 31, 2005
Assets Liabilities
Current assets: Current liabilities:
Cash $ 2,065 Accounts payable $900
Accounts receivable 2,720 Wages payable 250
Supplies 760 Unearned rent 240
Prepaid insurance 2,300 Total liabilities $ 1,390
Total current assets $ 7,845
Property, plant, and
equipment:
Land $20,000
Office equip. $1,800
Less accum.
depreciation 50 1,750 Owner’s Equity
Total property, plant Chris Clark, Capital 28,205
and equipment 21,750 Total liabilities and
Total assets $29,595 owner’s equity $29,595
Assets Liabilities
Current assets: Current liabilities:
Cash $ 2,065 Accounts payable $900
Accounts receivable 2,720 Wages payable 250
Supplies 760 Unearned rent 240
Prepaid insurance 2,300 Total liabilities $ 1,390
Total current assets $ 7,845
Property, plant, and
equipment:
Land $20,000
Office equip. $1,800
Less accum.
depreciation 50 1,750 Owner’s Equity
Total property, plant Chris Clark, Capital 28,205
and equipment 21,750 Total liabilities and
Total assets $29,595 owner’s equity $29,595
From theFrom the
StatementStatement
of Owner’sof Owner’s
EquityEquity
From theFrom the
StatementStatement
of Owner’sof Owner’s
EquityEquity

Adjusting and Closing EntriesAdjusting and Closing EntriesAdjusting and Closing EntriesAdjusting and Closing Entries
Adjusting entries are
recorded in the journal at the
end of the accounting
period.
Adjusting entries are
recorded in the journal at the
end of the accounting
period.

If a work sheet has been
prepared, the data for
these entries are in the
Adjustments columns.
If a work sheet has been
prepared, the data for
these entries are in the
Adjustments columns.

OWNER’S CAPITALOWNER’S CAPITAL
The Closing ProcessThe Closing ProcessThe Closing ProcessThe Closing Process
Income Summary
11
Revenues are
transferred to
Income Summary22
Expenses are
transferred to
Income Summary
33 Net Income or Net Loss is
transferred to Owner’s Capital
44
Drawings are transferred to
Owner’s Capital

OWNER’S CAPITALOWNER’S CAPITAL
Income Summary
11
Revenues are
transferred to
Income Summary22
Expenses are
transferred to
Income Summary
33 Net Income or Net Loss is
transferred to Owner’s Capital
44
Drawings are transferred to
Owner’s Capital
TheThe Income SummaryIncome Summary
account does not appear onaccount does not appear on
the financial statements.the financial statements.
TheThe Income SummaryIncome Summary
account does not appear onaccount does not appear on
the financial statements.the financial statements.

Wages Expense
Bal. 4,525
Rent Expense
Bal. 1,600
Depreciation Expense
Bal. 50
Utilities Expense
Bal. 985
Supplies Expense
Bal. 2,040
Insurance Expense
Bal. 100
Miscellaneous Expense
Bal. 455
Fees Earned
Bal. 16,840
Rent Revenue
Bal. 120
Chris Clark, Capital
Bal. 25,000
Chris Clark, Drawing
Bal. 4,000
Income Summary
Note:Note: TheThe
balances shownbalances shown
are adjustedare adjusted
balances beforebalances before
closing. Theclosing. The
followingfollowing
sequencesequence
demonstrates thedemonstrates the
closing process.closing process.
Note:Note: TheThe
balances shownbalances shown
are adjustedare adjusted
balances beforebalances before
closing. Theclosing. The
followingfollowing
sequencesequence
demonstrates thedemonstrates the
closing process.closing process.

Wages Expense
Bal. 4,525
Rent Expense
Bal. 1,600
Bal. 50
Utilities Expense
Bal. 985
Supplies Expense
Bal. 2,040
Insurance Expense
Bal. 100
Bal. 455
Fees Earned
Bal. 16,840
Rent Revenue
Bal. 120
Bal. 25,000
Bal. 4,000
Income Summary
Debit each revenue
account for the
amount of its
balance, and credit
Income Summary
for the total
revenue.
16,840
120
16,960

Wages Expense
Bal. 4,525
Rent Expense
Bal. 1,600
Bal. 50
Utilities Expense
Bal. 985
Supplies Expense
Bal. 2,040
Insurance Expense
Bal. 100
Bal. 455
Bal. 25,000
Bal. 4,000
Income Summary
Debit Income
Summary for the
total expenses and
credit each expense
account for its
balance.
Fees Earned
Bal. 16,840
Rent Revenue
Bal. 120
16,840
120
16,9609,775
455
100
2,040
985
50
1,600
4,525

Wages Expense
Bal. 4,525
Rent Expense
Bal. 1,600
Bal. 50
Utilities Expense
Bal. 985
Supplies Expense
Bal. 2,040
Insurance Expense
Bal. 100
Bal. 455
Bal. 25,000
Bal. 4,000
Income Summary
Debit Income
Summary for the
amount of its
balance (in this
case, the net
income) and credit
the capital account.
Fees Earned
Bal. 16,840
Rent Revenue
Bal. 120
16,840
120
16,9609,775
455
100
2,040
985
50
1,600
4,525
7,205
7,205

Wages Expense
Bal. 4,525
Rent Expense
Bal. 1,600
Bal. 50
Utilities Expense
Bal. 985
Supplies Expense
Bal. 2,040
Insurance Expense
Bal. 100
Bal. 455
Bal. 25,000
Bal. 4,000
Income Summary
Debit the capital
account for the
balance of the
drawing account,
and credit drawing
for the same
amount.
Fees Earned
Bal. 16,840
Rent Revenue
Bal. 120
16,840
120
16,9609,775
455
100
2,040
985
50
1,600
4,525
7,205
7,205
4,000
4,000

Wages Expense
Bal. 4,525
Rent Expense
Bal. 1,600
Bal. 50
Utilities Expense
Bal. 985
Supplies Expense
Bal. 2,040
Insurance Expense
Bal. 100
Bal. 455
Bal. 25,000
Bal. 4,000
Income Summary
Fees Earned
Bal. 16,840
Rent Revenue
Bal. 120
16,480
120
16,9609,775
445
100
2,040
985
50
1,600
4,525
7,205
7,205
4,000
4,000
Close RevenuesClose Revenues
Close ExpensesClose Expenses
Close Income SummaryClose Income Summary
Close DrawingClose Drawing
16,84016,840
120120
16,96016,960
4,5254,525
1,6001,600
5050
985985
2,0402,040
100100
455455
9,7759,775
7,2057,205
7,2057,205
4,0004,000
4,0004,000
Review of the Closing ProcessReview of the Closing ProcessReview of the Closing ProcessReview of the Closing Process

After the closing entries
are posted, all of the
temporary accounts have
zero balances.
After the closing entries
are posted, all of the
temporary accounts have
zero balances.

Post-closing Trial BalancePost-closing Trial BalancePost-closing Trial BalancePost-closing Trial Balance
NetSolutions
Post-Closing Trial Balance
December 31, 2005
Cash 2 065 00
Accounts Receivable 2 720 00
Supplies 760 00
Prepaid Insurance 2 300 00
Land 20 000 00
Office Equipment 1 800 00
Accumulated Depreciation 50 00
Chris Clark, Capital 28 205 00
29 645 00 29 645 00

Financial Analysis forFinancial Analysis for
NetSolutionsNetSolutions
Working
Capital = $7,845 – $1,390
Working
Capital =
Current
Assets
–
Current
Liabilities
Working
Capital = $6,455

Current
Ratio =
Current
Assets
÷
Current
Liabilities
Current
Ratio = $7,845 ÷ $1,390
Current
Ratio = 5.6

This ratio implies that
NetSolutions is able to pay
its current liabilities.
This ratio implies that
NetSolutions is able to pay
its current liabilities.

Current
ratio = $7,845 ÷ $1,390
Current
ratio =
Current
Assets
÷
Current
Liabilities
Current
ratio = 5.6

NetSolutions can use the current ratio
to make comparisons across
companies and with industry averages.
NetSolutions can use the current ratio
to make comparisons across
companies and with industry averages.

The EndThe End
Chapter 4Chapter 4

Ch04 completing the accounting cycle, intro accounting, 21st edition warren reeve fess eng

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

En vedette

En vedette (20)

Similaire à Ch04 completing the accounting cycle, intro accounting, 21st edition warren reeve fess eng

Similaire à Ch04 completing the accounting cycle, intro accounting, 21st edition warren reeve fess eng (20)

Plus de Trisdarisa Soedarto, MPM, MQM

Plus de Trisdarisa Soedarto, MPM, MQM (10)

Dernier

Dernier (20)

Ch04 completing the accounting cycle, intro accounting, 21st edition warren reeve fess eng