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Suspense account is created as a temporary account for balancing the trial balance.
Errors in accounting are depicted through trial balance when it comes unbalanced.
For temporary rectification the unknown balance amount is treated as suspense amt and it can either be debit(Expense) or credit(Income).
The unknown balance amount will be set-off during identification of the error via reversal entries.
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When posting closing entries do you post each expense and each revenue amount to income summary so that each account is cleared out for the next period?
You journalize and post each income or expense individually to its own income/expense account, but use the total of all the income or expense accounts to jounalize/post to the income summary.
Is a income tax benefit account a contra account of income tax expense?
The answer is no.A contra account to the "Income Tax Benefit (Deferred)" would be a "Income Tax Charge (Deferred)".
Why does expense account require a debit entry to increase equity?
A debit to an equity account, or in this case an expense account, will increase the expense account. An increase to this account means the more expenses you have. The more expenses mean the less money you earn and therefore you make less money in your income statement because revenues - expenses = income
What entries can properly close a temporary account debit income summary credit?
Standard closing entries: Close Revenue accounts to Income Summary by debiting Revenue and crediting Income Summary. Close Expense accounts to Income Summary by debiting Income Summary and crediting Expense accounts. Close Income Summary to Capital account by debiting Income Summary and crediting Capital account. Close Withdrawals account to Capital account by debiting Capital account and crediting Withdrawals account.
What accounts will be closed by debiting the Income Summary account?
Depreciation Expense
The entry to close the appropriate insurance account at the end of the accounting period is what?
Insurance account is expense account and expense account is closed in income summary account. Insurance account should be credited where as income summary account should be debited
When posting closing entries do you post each expense and each revenue amount to income summary so that each account is cleared out for the next period?
You journalize and post each income or expense individually to its own income/expense account, but use the total of all the income or expense accounts to jounalize/post to the income summary.
Is a income tax benefit account a contra account of income tax expense?
The answer is no.A contra account to the "Income Tax Benefit (Deferred)" would be a "Income Tax Charge (Deferred)".
What account type is salary?
Salary is an expense for business and that's why shown under income statement as an expense.
Why does expense account require a debit entry to increase equity?
A debit to an equity account, or in this case an expense account, will increase the expense account. An increase to this account means the more expenses you have. The more expenses mean the less money you earn and therefore you make less money in your income statement because revenues - expenses = income
What accounts will be closed by debiting the Income Summary account?
Depreciation Expense
What entries can properly close a temporary account debit income summary credit?
Standard closing entries: Close Revenue accounts to Income Summary by debiting Revenue and crediting Income Summary. Close Expense accounts to Income Summary by debiting Income Summary and crediting Expense accounts. Close Income Summary to Capital account by debiting Income Summary and crediting Capital account. Close Withdrawals account to Capital account by debiting Capital account and crediting Withdrawals account.
Is depreciation expense is nominal account?
Yes depreciation is a nominal account and used to allocated the portion of fixed cost to income statement as an expense for that specific period.
How do you calculate the Bad Debt Expense on the income statement report?
credit the account receivable and debit the bad debt expense.
What is general ledger suspense?
A general ledger suspense account is used to temporarily record items for which the accounting is not clear.For example, if a company records an expense, without keeping adequate documentation, the bookkeeper may need to record the item in the "suspense" account. Once adequate documentation is found, the item would be reclassified into its proper account.
What is A temporary account used in closing revenue and expense accounts called?
The answer is income summary.
What should rent be classified as on a balance sheet?
Rent is not a balance sheet account, it is an expense, hence an income statement account.
