Provide an example of each title here and then record the journal entries.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Q1- Provide an example of each title here and then record the journal entries.

Following is the first given answer.

1-Purchasing Equipment for cash

Given answer:

ABC company purchased equipment for SAR20,000 cash .

Cash          20,000

        Consulting Revenue.    20,000

 

2-Issuing common stocks receiving cash.

3-Providing service receiving cash.

4-Purchasing supplies on credit.

5-Borrowing money from a bank.

6-Paying employees their salaries.

 

Q2- What is the accrual basis of accounting? When should revenue and expense be recognized in the accrual basis? Provide an example.

 

Q3- On your own words, explain the purpose and the importance of the income statement, and prepare the income statement for ABC company based on the following information taken from the trial balance in 2019

Consulting revenue

 

SAR70,000

Rental revenue

 

30,000

Supplies expense

5,000

 

Rent expense

20,000

 

Wages expense

30,000

 

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