art 2 Short Answers. (55pts) Please type your response and pay attention to your
ID: 2547033 • Letter: A
Question
art 2 Short Answers. (55pts) Please type your response and pay attention to your spelling and grammatical rules. 1) You have switched you company accounting records to QuickBooks using the EasyStep Interview window and QuickBooks Setup window. What would you do to customize the Chart of Accounts List created by QuickBooks? (15pts) 2) You are reviewing the new company file you created in QuickBooks using EasyStep Interview and QuickBooks Setup, and you notice there are no balances in the revenue and expense accounts. Why is this, and how would you correct it? (20pts) You have created an Inventory account and a Cost of Goods Sold account, but every time you add a new inventory part item to the ltem List, QuickBooks creates an 3) Inventory Asset account and Cost of Goods Sold account. Why does this happen and how can you correct it? (20pts)Explanation / Answer
1. As this is nothing but a migration from one software to another software, all the ledger balance with their grouping head has to be transferred first so that there wont be any difference in trail balance.
2. As the closing balances consist the balance of only balance sheet items and the Profit and loss items are used for calculating profit or loss and it transferred to reserve & surplus. so the balance of P&L will not arise.
3. This happens beacause as soon as the inventory is received we account it using goods receipt note/material receipt note which goes to cost of goods sold when the goods are sent to production.
cost of goods sold is nothing but Opening stock+Purchases-Closing stock, so as and when we purchase if it is moving to Cost of goods sold finally the balance in cost of goods sold is only purchase.
During the year end we can adjust with inventory differences and arrive Cost of goods sold using above formula.
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