Listed below are nine technical terms used in this chapter:

Liquidity

Nominal accounts

Real accounts

Adequate disclosure

After-closing trial balance

Closing entries

Income summary

Interim financial statements

Dividends

Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer “None” if the statement does not describe any of the items.

a. The accounting principle intended to assist users in interpreting financial statements.

b. A term used to describe a company’s ability to pay its obligations as they come due.

c. A term used in reference to accounts that are closed at year-end.

d. A term used in reference to accounts that are not closed at year-end.

e. A document prepared to assist management in detecting whether any errors occurred imposing the closing entries.

f. A policy decision by a corporation to distribute a portion of its income to stockholders.

g. The process by which the Retained Earnings account is updated at year-end.

h. Entries made during the accounting period to correct errors in the original recording of complex transactions.