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How do ledger and journal entries interact with one another?

How do ledger and journal entries interact with one another?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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How do ledger and journal entries interact with one another? Explain how the ledger provides the information needed to prepare the balance sheet. Distinguish between a temporary and a permanent account. Explain how the ledger provides the information needed to prepare the operating statement. What is the main purpose of the statement of cash flows? What are the three categories used within the statement of cash flows? Why are these categories important for understanding an organization's cash situation? Differentiate between the direct and the indirect methods for preparing and presenting the statement of cash flows. Explain why health care organizations need both an operating statement and a cash flow statement.
Transcribed Image Text:How do ledger and journal entries interact with one another? Explain how the ledger provides the information needed to prepare the balance sheet. Distinguish between a temporary and a permanent account. Explain how the ledger provides the information needed to prepare the operating statement. What is the main purpose of the statement of cash flows? What are the three categories used within the statement of cash flows? Why are these categories important for understanding an organization's cash situation? Differentiate between the direct and the indirect methods for preparing and presenting the statement of cash flows. Explain why health care organizations need both an operating statement and a cash flow statement.
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