Multiple Choice
Which of the following best describes the effect on the accounting equation when a company records a journal entry to purchase equipment for cash?
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2. Transaction Analysis
Journal Entries: Debits and Credits
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Javier needs to add month-end accruals to his company's books. Which QuickBooks function would be most useful for recording these accruals as journal entries?
A
Run the Profit and Loss report
B
Reconcile bank accounts
C
Create a new customer invoice
D
Use the 'Make General Journal Entries' function
Verified step by step guidance1
Understand the concept of accruals: Accruals are accounting adjustments for revenues earned or expenses incurred that have not yet been recorded in the company's books. These adjustments ensure that financial statements reflect the true financial position of the company.
Identify the purpose of journal entries: Journal entries are used to record financial transactions in the accounting system. They are essential for making adjustments, such as month-end accruals, to ensure accurate reporting.
Locate the appropriate QuickBooks function: In QuickBooks, the 'Make General Journal Entries' function is specifically designed to record journal entries, including accruals. This function allows users to manually input adjustments to accounts.
Access the 'Make General Journal Entries' function: Navigate to the QuickBooks menu, typically under the 'Company' or 'Accounting' section, and select 'Make General Journal Entries.' This will open a form where you can input the necessary details for the accruals.
Input the accrual details: Enter the date, accounts affected, debit and credit amounts, and a description of the transaction. Ensure that the debits and credits are balanced, as this is a fundamental principle of double-entry accounting.
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