Closing entries do what? What is an NSF check and how does it affect a bank rec?

Question

Closing      entries do what?

What      is an NSF check and how does it affect a bank rec?

Look      at chapter 10 blackboard exercises – know how to do and calculate the      adjusting entry for a note and how to calculate the amount of interest      expense

What      are advantages and disadvantages of the corporate form of organization?

What      do a DR and CR balance mean in the income summary account?

How is      an after closing trial balance different from an adjusted trial balance?

What      is the Lower of cost or market rule and what does it apply to?

What      are the two principles of GAAP applied for adjusting entries?

What      is petty cash? (chapter 7) what does a petty cash fund do?

  Know      how to calculate the gross profit rate

What      is the difference between current and long term liabilities?

Explanation / Answer

Closing Entry : is used to transfer data temporary data to permanent account

NSF Check: is bounced check due to non sufficient fund , in bank reco it should add back due to not clearing

For claculate the interest multiply notes to its yearly interest rate.

Income Statement DR means loss CR means profit

Adjusted trail balance is after adjusting closing entries

Lower cost or market value whichever is lower is rule and it apply on inventory valuation

Petty cash is cash for regular exepenses

Gross profit= Sales- Cost of goods sold

Current liabilties is payable with in oner year but long term liablities is payable after one year ( more than one year)

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