Acc 201 Sample exam review 1 page 4

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

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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
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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 were earning for that year only. Its not like were losing that revenue or expenses but theyre 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)...
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This note was uploaded on 03/19/2008 for the course ACCT 201 taught by Professor Anothony during the Fall '07 term at Michigan State University.

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