When a business suffers a net loss, the journal entry to close the income summary account would be to debit income summary and credit capital. True or false.
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When a business suffers a net loss, the
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- At the time companies write off accounts receivable, there is no effect on net income. true or falseAll of the following about expense recognition principle are false, except: a. Business requests a loan from a bank. O b. Business buys a building. O C. Business receives the utility bill. Od. Business pays cash in advance for an insurance policy. CLEAR MY CHOICEThe closing entry for an expense account would include a debit to: O The expense account and a credit to Net Income. O Net Income and a credit to the expense account. Retained Earnings and a credit to the expense account. O The expense account and a credit to Retained Earnings. None of the above.
- True or False for the following statements: 1. Accounting can be defined as an information system that provides reports to users about the economic activities and condition of a business. 2. An account receivable is typically classified as a revenue, not an asset. 3. The allowance for doubtful accounts is an estimate based on past experience of the corporation. 4. Using FIFO method to calculate inventory can decrease tax payment. 5. The accounting equation can be expressed as Assets - Liabilities = Owner's Equity 6. If the liabilities owed by a business total S300,000 and owners equity is equal to $300,000, then the assets also total $300,000. 7. An account receivable is a claim against a customer arising from a sale on account. 8. The unit of measure concept requires that economic data be recorded in a common unit of measurement like RMB and U.S. dollar. 9. Paying off an account payable increases liabilities. 10. The normal balance of cash account is a debit.Which of the following statements regarding T accounts is accurate? the left side of the T account is the credit side T accounts are only used for assets and liabilities, but not owner's equity accounts T accounts are not used to analyze transactions quickly Or T accounts are not used to maintain financial recordsWhat do the terms 'debit' and 'credit' mean from an accounting perspective? What are the two primary rules of debits and credits? How do these impact the various types of accounts (assets, liabilities, expenses, revenues, distributions to owners, and equity)? How do they help ensure that an illogical journal entry cannot be made? Provide at least one example of an illogical entry. Why would this be illogical?
- A closing entry would never include a: O debit to a revenue account and a credit to Income Summary. O debit to an asset account and a credit to a liability account. O debit to Income Summary and a credit to Retained Earnings. O credit to an expense account and a debit to Income Summary.If the company reports a net loss for the period, then the closing entries will result in an overall ____ to Retained Earnings. A. Debit B. CreditAll of the following about expense recognition principle are false, except: O a. Business buys a building. O b. Business requests a loan from a bank. O c. Business pays cash in advance for an insurance policy. O d. Business receives the utility bill.
- When using the allowance method, failure to record bad debt expense would have what effect on the accounting equation?: Assets Liabilities Stockholder's Equity A. No Effect No Effect No Effect В. Overstated No Effect Overstated С. Understated No Effect Understated D. Overstated Overstated Overstated Е. No Effect Understated Overstated Which of the following statements is FALSE?What accounts are considered temporary? Describe the process to close these temporary accounts? list the steps in the accounting cycle and describe the importance of each step ? What is liquidity? What is solvency? How are these evaluated in a business ?What are Outstanding Expenses? A. Expenses which are not paid off in the current balance sheet. B . The necessary purchases that keep a business going from day-to-day. C. Type of expense that is due but has not been paid. D. None of the above.
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