{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Acc 201 Sample exam review 1 page 4

Acc 201 Sample exam review 1 page 4 - profitable we were...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Adjusting Entries update revenue and expenses, and updating, correcting errors to permanent accounts 1. Expense Permanent Account (Liab. Or Asset) 2. Unearned Revenue Revenue Closing Process: CLOSE ALL TEMPORARY ACCOUNTS: REVENUES, EXPENSES, GAINS, LOSSES, DIVIDENDS We close temporary account because they’re only used to measure revenue, expenses, or dividends that we paid or received for one fiscal year. So revenue, for example, can be measured for one year to determine if we sold more than last year or to see how
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: profitable we were for one year, therefore at the end of the year we close it to move the account balance to zero so that next year we can determine how much revenue we’re earning for that year only. It’s not like we’re losing that revenue or expenses but they’re being transferred to the permanent account of retained earnings. Revenue (-R, -SE) Retained Earnings (+SE) Retained Earnings (-SE) Expenses (-E, +SE) Retained Earnings (-SE) Dividends (+SE)...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online