10 Questions
Which type of accounts are considered real (permanent) accounts?
Asset, liability, and equity accounts
What kind of events are generally the source or cause of changes in assets, liabilities, and equity?
External or internal events
What is the purpose of periodically closing nominal accounts?
To transfer balances to real accounts
What does a ledger contain?
All asset, liability, equity, revenue, and expense accounts
Why are real accounts sometimes referred to as permanent accounts?
Because they remain open indefinitely
What is the purpose of a subsidiary ledger?
Containing details related to a specific general ledger account
When are adjusting entries typically made in accounting?
At the end of an accounting period to update accounts to an accrual basis
What is the primary purpose of a post-closing trial balance?
To show the financial position of the company after closing entries
In accounting, what does it mean when an account shows a debit balance?
The total of debit amounts exceeds the total credits in the account
What is the purpose of closing entries in accounting?
To reduce all nominal accounts to zero and transfer net income or loss
Learn about how accounting information systems collect and process transaction data, and how events can impact assets, liabilities, and equity. Explore the factors that shape accounting information systems in different businesses.
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