What is the dual purpose of the closing process?

Q: how do you determine when goodwill will be written off under the impairment rules

A: Goodwill:Goodwill is the good reputation developed by a company over years. This is recorded as an…

Q: Differentiate between “loss carryback” and “loss carryforward.”Which can be accounted for with the…

A:

Q: Explain the dual purpose of closing process.

A: The closing entries serve to transfer the balances out of certain temporary accounts and into…

Q: What is the basis for distinguishing between operating and nonoperating items?

A:

Q: Define closing entries and their purpose.

A: Closing Entries: Closing entries are those journal entries which are passed to transfer the balances…

Q: What is a special order? How does operating capacity affect a special order? In what scenario would…

A: A special order mean a sales order which is in addition to the sales to regular customers of a…

Q: What is the difference between adjusting entries and correcting entries? Which method is better and…

A: Difference between adjusting entries and correcting entries:Usually, adjusting entries are needed at…

Q: what is disinvestment ?

A: Disinvestment:  Disinvestment means selling off the assets such as manufacturing plant, a division,…

Q: Define the term End-of-Period Convention?

A: Cash flows refer to the amount of cash that is either invested or received by the company during the…

Q: Which decision is called the abandonment decision?

A: Answer: The decisions relating to the company that provides flexibility to discontinue the project…

Q: Explain the closing process.

A: Closing Process:   Closing process is a process which consists of journalizes the closing entries of…

Q: What is meant by Wraparound filing?

A: Financial reporting: Financial reporting is the procedure used to communicate the information…

Q: What is nonoperating assets?

A: Non-operating assets are the assets that are not required or in use for normal business activity.…

Q: Define the term Loss Contingencies.

A: A loss contingency is incurred by the business based on the result of a future event, such as…

Q: What does the elimination process accomplish?

A: Intercompany elimination:   Intercompany elimination refers to the process in which the transactions…

Q: Briefly explain the concepts of temporary difference and permanent difference

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Q: assess the reasonableness of opening balances

A: Opening balance of accounts are closing balances of those accounts brought forward to current…

Q: What are the Basic Concepts and Terminology of Replacement-Analysis?a

A: Assets: Assets are those items that provide value for money and future economic benefit for an…

Q: What is the equipment replacement?

A: Under replacement, one is focused with equipment and machinery that worsens with the passage of…

Q: What is the closing process?

A: Closing Process: Closing process is a process which consists of journalizes the closing entries of…

Q: Distinguish between cumulative or noncumulative?

A: cumulative and noncumulative preferred is assumed since the key term is not given.

Q: What Constitutes a Discontinued Operation?

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: What is the unadjusted trial balance?

A: Trial balance is the summary of all general ledger accounts being used in the business. It shows…

Q: What are reversing entries? Are they required by GAAP?

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Q: How do fixed asset systems differ from purchases systems?

A: Definition: Purchase system: The identification and procurement of the inventory needs for the…

Q: What are the different stages of the Double Entry System?

A: The accounting is a process to identify the business transactions, classify the business…

Q: When are loss contingencies recorded?

A: Definition:   Contingent liability: This is an uncertain obligation which might be incurred on a…

Q: Owner s withdrawal may be classified as

A: Owners withdrawal is part of balance sheet it is reported in equity section of balance. It is…

Q: What exactly is impairment? Could you provide an example?

A: THE ANSWER:

Q: What is eviction?

A: Eviction as per law is the process of civil nature in which court allows landlord to legally remove…

Q: What do you mean by roll-forward procedure and rollover method? Difference between roll-forward…

A: Roll Forward Procedure The roll-forward process means checks that will be carried out in the…

Q: Explain the Redemption process?

A: The question is based on the concept of redemption, which is mainly used for repayment of fixed…

Q: When should the defender be replaced?

A: When should the defender be replaced?

Q: What are some types of divestitures?

A: A divestiture or divestment is the disposal of the company’s assets or a through sale, exchange,…

Q: What is indentures?

A: An indenture is a legal contract that states the advantages and commitments of two or more parties…

Q: Define impairment? Give an example?

A: Impairment: The intangible assets which have indefinite lives are not amortized but are tested…

Q: What are the differences between adjunct account and a contra account?

A: Definition:An adjunct account increases the book value of a liability account.A contra Account…

Q: What are the steps in the closing process?

A: Closing process:The accounting information of business is recorded based on an accounting period.…

Q: Methods and rules to be followed in case of reconstitution?

A: Solution- It is often noticed that a partnership firm undergoes restructuring. These changes are…

Q: Define divestiture

A: Introduction: A divestiture might happen when a business unit is thought to be redundant afterward…

Q: What was the value of closing work in progress?

A: Closing work in Progress can be calculated for those jobs which are not completed. And the jobs…

Q: Define and explain Closing process and closing entries?.

A: Closing entries means the entries to be made on the closing of any particular period . All revenue…

Q: What is the definition of “retrospective application”?

A: The first book that the company will prepare is the journal book in which all the transactions of…