When an entry for depreciation is made what effect does it have on the financial statements?
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1) When an entry for depreciation is made what effect does it have on the financial statements?
2) What key book is the financial statement prepared from?
3) Do the unadjusted trial balance columns of a worksheet contain the account balances that appear on the financial statements?
4) What is the main or primary difference between deferred and accrued expenses?
5) The entry for depreciation has what overall effect on the financial statement?
6) Are assets, revenues and withdrawals increased by debits?
7) Do owner investments increase the assets and decrease the liabilities of a company?
8) Does a pre-paid expense recorded initially as an expense be adjusted by crediting the asset account?
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1. When an entry for depreciation is made what effect does it have on the financial statements? 5. The entry for depreciation has what overall effect on the financial statement?
(I think Q1 and Q5 are both asking the same thing?)
On the balance sheet: the net book value of Fixed Asset will decrease accordingly, so the total non-current asset balance will decrease too, and the total net assets (liabilities) will also decrease (increase) too
In P/L (or income statement): there will be a depreciation expense.
However, it will have no effect on cash flow statement as it doesn't really have a cash effect.
2. What key book are the financial statements prepared from?
The key book Financial statements are usually prepared from are T/B, Management Accounts
3) Do the unadjusted trial balance columns of a worksheet contain the account balances that appear on the financial statements?
Financial statements are prepared for each accounting period. Transactions are journalized and placed into the ledger. Once all accounts are totalled, the unadjusted trial balance is created.
The unadjusted trial balance is a summary of the ledger. It displays the totals for each account that were determined previously.
However, there are normally adjustments that need to be made. For example:
A firm has $2400 in Prepaid ...
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