Define: Generally Accepted Accounting Principles and Accrual Basis

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Define the terms assets, liabilities, and equity. Are these terms related in any way? If so, how?2
Assets2
Liabilities2
Owners' Equity2
What is the purpose of an account? What is the purpose of a ledger? Explain the following terms as they relate to a T account:2
(a) Debit side2
(b) Credit side2
How is profit determined under (a) the cash basis of accounting and (b) the accrual basis of accounting?3
Why are adjusting entries necessary? Surely they cause too much delay in preparing financial statements, and the financial effect of any entries made is immaterial in the long run.’ Respond to this criticism.4

Compare and contrast the purposes of adjusting entries and closing entries4
References:

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Define the terms assets, liabilities, and equity. Are these terms related in any way? If so, how? Assets
An asset is anything of value that your company owns, which is including cash. Assets get recorded on the balance sheet in terms of their dollar values. There are several types of assets, which are current assets, investments, capital assets, intangible assets. Liabilities

Anything a company owes to people or businesses other than its owners is considered a liability. There are two types of liabilities, which are current liabilities, and long-term liabilities. Owners' Equity

Owners' equity, also called capital, is any debt owed to the business owners. In publicly traded companies, outstanding preferred and common stock also represents owners' equity.

Assets, liabilities and owners' equity are the three components that make up a company's balance sheet. The balance sheet, which shows a business's financial condition at any point, is based on this equation:

Assets = Liabilities + Owners' Equity
This equation is also the framework for keeping track of money as it flows in and out of your company. It also show that how much assets, liabilities, and owner’s equity which a company has. Starting with the first penny you earn, you'll record in a general ledger each and every transaction using a double-entry system of debits and credits. (200 words)

What is the purpose of an account? What is the purpose of a ledger? Explain the following terms as they relate to a T account: (a) Debit side
(b) Credit side

The purpose of an account is a record a transaction of an asset, a liability, revenue, an expense or owners’ equity in the general ledger that is used to collect and store debit and credit amounts as evidence of accounting transactions. It shows all the transactions of the daily business activities, so that an accountant use them to make financial report for the company

The purpose of a ledger is recording and totaling monetary transaction by account, with debits and credits in separate columns and a beginning balance and ending balance for each account in the principal book. It is a permanent summary of all amounts entered in supporting journals which list individual transactions by date. Ledgers include sales ledger, purchase ledger, general ledger

Debit side is an entry (amount) entered on the left side column of a journal or general ledger account that increases an asset, draw or an expense or an entry that decreases a liability, owner's equity or revenue. Credit side is an entry (amount) entered on the right side column of a journal or general ledger account that increases a liability, owner's equity or revenue, or an entry that decreases an asset, draw, or an expense. (200 words) How is profit determined under (a) the cash basis of accounting and (b) the accrual basis of accounting?

Profit is determined by revenue minus expenses.

(a) The cash basis of accounting
An accounting method in which income is recorded when cash is received, and expenses are recorded when cash is paid out. Cash basis accounting does not conform with the provisions of GAAP and is not considered a good management tool because it leaves a time gap between...
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