College Accounting (Book Only): A Career Approach
12th Edition
ISBN: 9781305084087
Author: Cathy J. Scott
Publisher: Cengage Learning
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Chapter 5, Problem 2A
To determine
Explain the necessity of closing entries.
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Your uncle owns a small sole proprietorship. He does his own bookkeeping, although he didn't finish the chapter on closing entries before he opened his business. He mentions that closing entries look like they take a long time. He wonders why he should bother to do them, because all he looks at is the checkbook. What would you say to convince him that closing entries are necessary?
You have just picked up a new client who is very anxious about his expenses. The client considers his in house accounting services to be too high and he feels that he could save some time and money in that area by telling his accounting staff not to do closing entries. It is your job, in this discussion, to explain to your new client the importance of doing the closing entries and why they are worth doing.
After graduating from Berkeley College and passing your CPA exam, you have opened up an accounting firm that offers tax and consulting services to clients. You have just picked up a new client who is very anxious about his expenses. The client considers his in house accounting services to be too high and he feels that he could save some time and money in that area by telling his accounting staff not to do closing entries. It is your job, in this discussion, to explain to your new client the importance of doing the closing entries and why they are worth doing.
Chapter 5 Solutions
College Accounting (Book Only): A Career Approach
Ch. 5 - What is the third step in the accounting cycle?...Ch. 5 - Which of the following accounts would be closed...Ch. 5 - If Income from Services had a 20,400 credit...Ch. 5 - Which of the following accounts would appear on a...Ch. 5 - Under the cash basis of accounting, which of the...Ch. 5 - Prob. 6QYCh. 5 - Number in order the following steps in the...Ch. 5 - List the steps in the closing procedure in the...Ch. 5 - What is the purpose of closing entries? What is a...Ch. 5 - What are real accounts? What are nominal accounts?...
Ch. 5 - What is the purpose of the Income Summary account?...Ch. 5 - What is the purpose of the post-closing trial...Ch. 5 - Write the third closing entry to transfer the net...Ch. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - Classify the following accounts as real...Ch. 5 - The ledger accounts after adjusting entries for...Ch. 5 - As of December 31, the end of the current year,...Ch. 5 - The Income Statement columns of the work sheet of...Ch. 5 - The Income Statement columns of the work sheet of...Ch. 5 - After all revenue and expenses have been closed at...Ch. 5 - Identify whether the following accounts would be...Ch. 5 - Prob. 8ECh. 5 - Indicate with an X whether each of the following...Ch. 5 - Prepare a statement of owners equity for The...Ch. 5 - Prob. 1PACh. 5 - The partial work sheet for Ho Consulting for May...Ch. 5 - The account balances of Bryan Company as of June...Ch. 5 - Williams Mechanic Services prepared the following...Ch. 5 - Prob. 1PBCh. 5 - Prob. 2PBCh. 5 - Prob. 4PBCh. 5 - Toms Catering Services prepared the following work...Ch. 5 - Rather than going directly to college, some...Ch. 5 - Prob. 2ACh. 5 - The post-closing trial balance submitted to you by...Ch. 5 - You are preparing a post-closing trial balance for...Ch. 5 - The bookkeeper has completed a work sheet and has...Ch. 5 - This problem is designed to enable you to apply...Ch. 5 - This problem is designed to enable you to apply...Ch. 5 - Prob. 1CP
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