Johnson Company’s accounting period is one year, from July 1 to June 30 of the following year. On what date will Johnson Company prepare its adjusting entries and its closing entries?Chapter 4 Discussion Questions

1. What are the Learning Objectives for this chapter?

2. Johnson Company’s accounting period is one year, from July 1 to June 30 of the following year. On what date will Johnson Company prepare its adjusting entries and its closing entries?

3. For each of the following types of accounts, indicate whether it will get closed at the end of the accounting period. Write the word “yes” or “no” next to each one.
a. Asset accounts
b. Liability accounts
c. Owner’s capital account
d. Owner’s drawing account
e. Revenue accounts
f. Expense accounts
g. Income Summary account

4. Explain what it means to “close” an account.

5. The closing process consists of four steps…fill in the blanks below.
a. Close __________ into __________.
b. Close __________ into __________.
c. Close __________ into __________.
d. Close __________ into __________.

6. Describe what figure will end up on the right side of the Income Summary account.

7. And what figure will end up on the left side of the Income Summary account?

8. After closing the only Owner’s Equity account that remains open is the __________ account.

9. Name 5 current assets, and put them in the correct order.

10. Name four plant assets. Which assets get depreciated?

11. Name 5 current liabilities–what makes them “current?”

12. What does the current ratio measure? How is it calculated?

13. Suppose a company has a debt ratio of 90%. Would you be concerned about that company’s ability to pay its debts?

14. Can you name 5 accounts that would not appear on the post closing trial balance?

15. Are there any questions you have after studying this chapter? Please post them on the discussion board.

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