Accounting is an information system that: • Identify business activities, • Record the business transactions and, • Communicates the results to decision makers

800,000 - 80,000=720,000/40= 18,000

At the last step, the company communicates the summarized information obtained from the records to decision makers (information users) by using standardized reports which are called financial statements.

Expense is the cost of assets consumed or services used during the revenue earning process.

A trial balance is a list of accounts and their balances at a given time. The trial balance proves the mathematical equality of debits and credits after posting. The primary purpose of a trial balance is to prove (check) that the debits equal the credits after posting.The trial balance does not prove that the company has recorded all transactions correct. There may be errors in classification or measurement even the equality is provided. It indicates only that the debits and
the credits are equal.

Transferring the balances of the revenue and expense accounts to Income summary account, and transferring Income Summary account’s balance to Capital account are called the Closing Entries.

Revenues earned by performing a service or delivering goods but not yet recorded at the end of the period are accrued revenues. According to the accrual basis accounting, earned revenues are recorded when they are earned. Any revenues earned but not recorded during an accounting period require an adjusting entry that debits an asset account and credits a revenue account. The correct answer is D.

Service Revenue account is debited with the same amount of its credit balance and Income Summary account is credited. By doing so, BB Company closes its revenue account and transfers the balance to Income Summary account.

Unearned revenue is a liability account.

During the period, the company makes tens of thousands of financial transactions. Each transaction has to be recorded into journals and posted to the ledger. At the end of each month, monthly trial balance is prepared in order to ensure that the totals and the balances of the accounts are equal.  If the transaction is recorded recorded into a wrong account, the trial balance cannot figure it out. The trial balance is prepared as a cumulative table. This means that monthly totals are added onto previous months’ totals.  With the same manner, the trial balance prepared at the end of June includes six months’ total amounts. Preparing unadjusted trial balance at the end of the period is to be done before ending of the period activities.

identifying financial transactions 

In a sole proprietorship the owner is personally responsible for all the debts and liabilities of business. In short, there is no distinction between the business and its owner, but the accounting records of the business activities are kept separate from the personal records of its owner. 

Liabilities are defined as a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow of the entity’s resources. In other words, liabilities are claims against assets as existing debts and obligations. The correct answer is B.

The correct answer is B. Accounts payable and unearned revenue are liability account. Prepaid expenses is a asset account. 

The primary external users are investors and creditors.

Cash and Equipments accounts are used in this transaction.

As the revenue accounts, expense accounts and Income Summary accounts were closed, it means that they have no balances. So, in the post-closing trial balance those type of accounts will not take place. Assets, liabilities and Capital accounts are the only accounts that have balances left at the end of the period.

there are two part one side debit side another one is credit side at left side it should be debit side

In deferred expense (prepaid expense),
expense is recognized after the cash is paid.

In accrued revenue, revenue is recognized before the cash is received.