All of the following statements are correct, EXCEPT:
a. |
Temporary accounts are closed at the end of the accounting period to retained earnings. |
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b. |
Asset, liability, and stockholders' equity accounts are referred to as permanent accounts. |
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c. |
Adjusting entries are necessary when cash flow and the economic transaction occur in the same accounting period |
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d. |
Revenue, expense, and dividend accounts are described as temporary accounts. |
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e. |
Closing entries prepare accounting records for the next accounting period. At the end of the accounting period, an adjusting entry is made to reflect revenues earned (performance obligations have been satisfied), but cash is not yet collected. This is required due to which method of accounting?
|
1.
Answer is c. Adjusting entries are necessary when cash flow and the
economic transaction occur in the same accounting period
When Cash flow and economic transactions occur in same accounting
period, there is no adjustment required
2.
Answer is a. Accrual basis of accounting
Revenues are recognized when earned not when cash collected
As per HOMEWORKLIB RULES we are supposed to answer 1 question, i have answered 2, so kindly post other questions separately
All of the following statements are correct, EXCEPT: a. Temporary accounts are closed at the end...
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