What is the reason for closing accounts?
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7. What is the reason for closing accounts?
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- 9. How are the Income Statement and Balance Sheet linked when closing accounts? From Financial Management and Accounting Fundamentals for Construction (2009) TextbookAnswer the following question1) Explain the purpose of GAAP (Generally Accepted Accounting Principles), including the organization currently responsible for the creation and governance of these standards?2) How are assets and liabilities classified as either current or long term? Explain with example. 3) If a business had a net loss for the year, what would be the closing entry to close income summary and transfer the net loss to the capital account? Explain with example.4) The statement of changes in financial position was designed to enable financial statement users to answer questions like these:a) Where did the profit go?b) What do you mean by dividend? Explainc) How was it possible to distribute dividends in the presence of a loss?Services are provided for customers who are sent bills for the amount they owe. For thistransaction, identify the effect on the accounting equation.a. Assets increase and liabilities increase.b. Assets increase and stockholders’ equity increases.c. Liabilities increase and stockholders’ equity decreases.d. Liabilities decrease and assets decrease.
- 6.What is the fundamental accounting equation? 7.What are assets, liabilities, and owner’s equity? 8.What information does the balance sheet contain? 9.What information does the income statement contain? 10.What information does the statement of owner’s equity contain? 11.What information is shown in the heading of a financial statement? 12.Why does the third line of the headings differ on the balance sheet and the income statement"Indicate what impact ( for increase; for decrease) the following transactions would have on the accounting equation, . Table 3.171. How to record an amount due for customer that becomes definitely uncollectible? 2. How to record an amount due for customer that the entity might not be able to collect from customer? CHOICES for number 1 & 2: a. Dr Allowance for Bad Debts and Cr Cash b. Dr Allowance for Bad Debts and Cr Accounts Receivable c. Dr Bad Debt Expense and Cr Allowance for Bad Debts d. Dr Bad Debt Expense and Cr Cash 3. How to recognize the depreciation of an equipment? a. Dr Depreciation Expense and Cr Accumulated Depreciation b. Dr Accumulated Depreciation and Cr Depreciation Expense c. Dr Depreciation Expense and Cr Cash d. Dr Cash and Cr Accumulated Depreciation 4. How to record an expenses for which payment has not been made? a. Dr Expense and Cr Accounts Payable b. Dr Expense and Cr Accrued Expense Payable c. Dr Expense and Cr Cash d. Dr Expense and Cr Account Receivable
- 43. The purchase of supplies on credit to be use on the main office of the entity, will cause a corresponding what effect on corresponding accounts? a. Increase in assets and decrease in liabilities b. Both increase in assets and liabilities c. Increase in liabilities and decrease in assets d. Both decrease in assets and liabilities13. If a business has received cash in advance of services performed and credits a liability account, the adjusting entry needed after the service are performed will be?1.The chart of accounts is a listing of the accounts presently having balances in the general ledger. True or false? 2.. Revenue is the amount of money your business brings in by selling it's products or services to clients. True or false?
- How do accrued but unpaid expenses affect the balance sheet? b) How does accrued but uncollected revenue affect the balance sheet? c) Explain the rules of debit and credit with respect to transactions recorded in five accounts. d) Explain the types of closing entrieThe concept of materiality is an underlying principle of financial reporting.a. Briefly explain the concept of materiality.b. Is $2,500 a “material” dollar amount? Explain.c. Describe two ways in which the concept of materiality may save accountants’ time and effortin making adjusting entries.Identify which of the following accounts would be listed on the companys Post-Closing Trial Balance. A. Accounts Receivable B. Accumulated Depreciation C. Cash D. Office Expense E. Note Payable F. Rent Revenue G. Retained Earnings H. Unearned Rent Revenue