Question: At the end of the period it is necessary to close all temporary accounts. (1) Explain why this process is required (15 points) and (2) provide an example of the closing of an expense account, Salary Expense in
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Question: At the end of the period it is necessary to close all temporary accounts. (1) Explain why this process is required (15 points) and (2) provide an example of the closing of an expense account, Salary Expense in the form of a journal entry. (10 points)(Points : 25)
Question: (TCO 2) In accounting it is necessary to understand which accounts have a debit balance and which accounts have a credit balance. (1) Name 2 accounts that have a normal debit balance (10 points). (2) Name 2 accounts that have a normal credit balance (10 points). (3) Give an example of a journal entry when a company purchases land for $5000 by paying cash using the debit/credit rules. (5 points)(Points : 25)
Question: (TCO 4) Inventory valuation methods determine the cost of goods sold and the inventory balance. (1) Describe the difference between the LIFO, FIFO and average cost methods of accounting for inventory (15 points). (2) Give an example of the application of each method – LIFO, FIFO and Average Cost (10 points). (Points : 25)
Question: (TCO 4) Inventory valuation methods determine the cost of goods sold and the inventory balance. (1) Explain how the Last in First out (LIFO) method is applied (15 points) and (2) provide an example of the impact that this method of inventory valuation will have on Gross Profit. (10 points)(Points : 25)
Question: (TCO 1) The Balance Sheet is sometimes referred to as a snap-shot of the financial position of the business on a particular date. Name the three major components of the Balance Sheet (15 points) and provide an example of an account that would be found in each major component (10 points). (Points : 25)
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