Not allowed under generally accepted accounting principles ACCT 2001 Ch 04 Page

Not allowed under generally accepted accounting

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Not allowed_____under generally accepted accounting principles.ACCT 2001: Ch. 04Page 1 of 7LO 1LO 2LO 3
3.Why are adjusting entries needed?4.Types of Adjusting EntriesCategoriesTypesDefinition6.Define the following:ACCT 2001: Ch. 04 Page 2 of 7
Prepaid InsuranceInsurance that the company buys in advance to protect itself from losses due to fire, theft, and unforeseen eventsAssetDepreciationThe process of allocating the cost of an asset to expense over its useful lifeDepreciation Expense = expense account (SE)Accumulated Depreciation*The total amount of depreciation expense taken over the life of the assetContra assetBook ValueThe difference between the cost of adepreciable asset and its related accumulated depreciationn/aUnearned RevenuesCash received and a liability recorded before services are performedLiability * Statement Presentation for Depreciation:Appears just after the account it offsets (Equipment) on the balance sheet.

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