Jeremy Joji Financial Accounting Chapter 4 Problems 7/24/20
2. A worksheet, as stated in the book, is a multiple-column form used in the adjustment process and
in preparing financial statements. It is a working tool. (155)
8. Post-closing trial balances, containing only permanent balance sheet accounts, show
the equality of permanent account balances carried forward into the next accounting period. (166)
11. The first journalizing step in sequence is journalizing transactions. After, there is journalizing and
posting adjusting entries, then journalizing and posting closing entries. (169)
12. In sequence, the first trial balance is a regular trial balance. Next is an adjusted trial balance, then
a post-closing trial balance. (169)
13. Correcting entries are unnecessary in certain situations, while adjusting entries are an integral
part of the accounting cycle. Adjusting entries are also only posted at the end of an accounting period,
vs. only posting correcting entries in the event of error. Furthermore, adjusting entries always affect at
least one balance sheet and income statement account. Correcting entries on the other hand can have
any combination of accounts. (171)
14. For assets, classifications are current assets, long-term investments, property/plant and
equipment, and intangible assets. For Liabilities and Stockholders’ Equity, classifications are current
liabilities, long term liabilities, and stockholders’ equity. (174)
15. The operating cycle is the average time it takes for a company to purchase inventory, sell it on
account, and collect profits. It most commonly takes less than a year. (174)
16. Current assets are the assets the company plans on converting to cash, or assets planned to be
used up after one year/their operating cycle. When arranging items within the current assets section,
they usually list these items in order in which the company expects them to be converted to cash.
(174)
17. Long-term investments are meant to be sold or converted to cash in the future, while property,
plant and equipment are permanent and used by the company to generate profit. (I could not find the
answer in the textbook, so this is my own answer)