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1 year ago

How is a Trial Balance used?

1 answer:

3 0

In order to create balance sheets and other financial accounts, trial balances are a crucial document for auditors. To identify any accounting problems, a trial balance is performed to ensure that the general ledger accounts' debit and credit column totals match.

<h3>What purpose does a trial balance serve?</h3>

Any mathematical mistakes that have occurred in a double entry accounting system can be found using a trial balance. There shouldn't be any arithmetic errors in the ledgers if the sum of the debits and credits equals the total of the trial balance.

<h3>What exactly does a trial balance contain?</h3>

It varies. A trial balance can be used by businesses to monitor their financial status, and they may create multiple different types of trial balances over the course of the fiscal year. All of the significant accounting items, including as assets, liabilities, equity, revenues, expenses, gains, and losses, may be included in a trial balance.

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The greenhouse effect is caused solely by human activity.<br> a. True<br> b. False

notsponge [240]

False. Things like volcanoes can cause the greenhouse effect.

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3 years ago

The first budget customarily prepared as part of an entity's master budget is the

ladessa [460]

I am pretty sure it is sales budget

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3 years ago

On January 1, 20X6, Plus Corporation acquired 90 percent of Side Corporation for $180,000 cash. Side reported net income of $30,

LenKa [72]

Answer:

1) b) $25,000

2) d. $203,400

Explanation:

Ref Particulars Amount

a Fair value of entity 200,000

b Total value without patent 175,000

c=a-b Patent 25,000

Therefore, the increase in the fair value of patents held by Side is;

b) $25,000

Fair value of consideration given:

Ref Particulars Amount

Stock 0

Cash 180,000

a Total consideration 180,000

b Stake acquired 90%

c=a/b Fair value of subsidiary 200,000

d=100%-b Minority interest 10%

e=c*d Fair value of minority interest 20,000

On acquisition date

Value of subsidiary without patent

Common stock 100,000

Paid in capital -

Retained earnings 60,000

Fair value adjustment:

Patent -

Equipment 10,000

Land 5,000

Fair value without patent 175,000

Particulars Investment

Acquisition date 180,000

Add: share of net income 54,000

Less: Dividends 18,000

Less: Fair value amortization 12,600

Balance Jan 1, 20X8 203,400

{Share of earnings for 2 years = 30,000 × 2 × 90% = 54,000 }

{Share of dividends for 2 years = 10,000 × 2 × 90% = 18,000 }

{Fair value amortization for 2 years = 7,000 × 90% × 2 = 12,600}

Therefore Balance as at Jan 1, 20X8 is

d) $203,400

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3 years ago

DJH Enterprises has 3 departments. Operating results for 2019 are as follows:

konstantin123 [22]

Answer:

DJH Enterprises

The effect of eliminating Department 2 will increase the total operating income to $27,000 from $5,000.

Explanation:

a) Data and Calculations:

Operating Results for 2019 for the three departments:

Department 1 Department 2 Department 3 Total

('000)

Sales $670,000 $322,000 $856,000 $1,848

Variable costs 445,000 287,000 602,000 1,334

Contribution margin $225,000 $35,000 $254,000 $514

Direct fixed expenses $120,000 $27,000 $163,000 $310

Common fixed expenses 75,000 30,000 94,000 199

Total fixed expenses $195,000 $57,000 $257,000 509

Operating income (loss) $30,000 ($22,000) ($3,000) $5

Loss-making departments eliminated:

Department 1 Department 3 Total

Sales $670,000 $856,000 $1,526,000

Variable costs 445,000 602,000 1,047,000

Contribution margin $225,000 $254,000 $479,000

Direct fixed expenses $120,000 $163,000 $283,000

Common fixed expenses 75,000 94,000 169,000

Total fixed expenses $195,000 $257,000 $452,000

Operating income (loss $30,000 ($3,000) 27,000

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3 years ago

A credit entry:

blagie [28]

Answer: e. Decreases asset and expense accounts, and increases liability, common stock, and revenue accounts.

Explanation:

Let's evaluate each of the options as follows:

a. Is always a decrease in an account - This is false because a credit entry increases liability, common stock and revenue accounts.

b. Is recorded on the left side of a T-account - Although in modern day accounting, the use of T-account has been relegated to the background. However, if entries are to be recorded using the T-account, all debits are posted to the left side while all credits are recorded on the right side of the account.

c. Increases asset and expense accounts, and decreases liability, common stock, and revenue accounts - It does not increase asset and expense accounts, rather it reduces them. The opposite applies to liability, common stock, and revenue accounts.

d. Is always an increase in an account - This is false.

Therefore, option e is correct because a credit entry reduces asset and expense accounts, and increases liability, common stock and revenue accounts.

3 0

3 years ago

Read 2 more answers