Accounting Equation
The effect on Stockholder's Equity when depreciation is recorded for the year
What is Decrease?
This account is “closed” or reset to zero during the closing process
What is Dividends?
A prepaid expenses account is an example of this
What is an Asset?
The effect on the accounting equation: A Company purchases supplies on account.
What is Assets increase and Liabilities increase?
The purpose of the closing entry
What is to reset the balance in revenue and to update the balance in retained earnings?
The effect on the accounting equation: A company paid $38,000 of its accounts payable in cash
What is, Assets would decrease $38,000, liabilities would decrease $38,000, and equity remains unchanged?
Rent Revenue, Fees Earned and Miscellaneous Expense are examples of this kind of account in relation to the closing process.
What is temporary/nominal accounts?
The effect on the accounting equation: Recorded the adjusting entry for 3 months of a 12-month insurance policy that were used by the end of the fiscal year. The payment of the 12-month policy was originally recorded as Prepaid Insurance.
What is Assets decrease and Equity decreases?
The total assets at the end of the month:
During its first month of operations, Donald Company borrowed $100,000 from a bank, and then purchased equipment costing $40,000 by paying cash of $20,000 and signing a long term note for the remaining amount.
During the month, the company also purchased Inventory for $30,000 on credit, performed services for clients for $10,000 on account, paid $15,000 cash for accounts payable, and paid $30,000 cash for utilities.
What is $115,000?