Claflin Difference Between Permanent and Temporary Account Questions

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Business Finance

Claflin University

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3 questions

1: Explain the difference between permanent and temporary account?

2:what is the difference in the way that bonds are reported by for profit and not profit organization ?

3: Discuss the four main element of the Institute of Management Accountant code of ethics?

I have the book but it so big up


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Explanation & Answer

Attached.

Running head: FINANCIAL MANAGEMENT

1

Financial Management
Student’s Name
Professor’s Name
Course Title
Date

FINANCIAL MANAGEMENT

2

Financial Management
10-3: Explain the difference between permanent and temporary account?
Permanent accounts track financial transactions for many financial periods. They keep a
record of the assets, liabilities and equity. Therefore, balance sheet accounts can be termed as
permanent account since the ending balances from one fiscal year continues as a beginning balance
for the next fiscal period. Furthermore, while permanent accounts do not have an ending period,
temporary accounts are closed at the end of the financial period (Finkler et al., 2017). This means
that permanent accounts are not closed, rather, the same balance which they ended in the account
acts as the beginning for the next period.
On the other hand, temporary accounts usually keep a record of financial transactions during
a specific financial period. Finances are grouped as either revenues or expenses. They are temporary
because the aim is to just offer a reflection of the revenues and expenses for the financial period
being reported only. An income statement is an example of a temporary account because the aim is
to show the transactions for a specific time period. This means that once that period is over, the
accounts go back to zero to start over the following period. Thus, while the temporary accounts are
not typically closed, the closing entry prepares the organization for the following accounting period
by moving the account balances to zero (Finkler et al., 2017). Nonetheless, organizations maintain
both permanent and temporary accounts for the purpose of ensuring that there are accurate records
of the financial transactions.

FINANCIAL MANAGEMENT

3

9 -15: What is the difference in the way that bonds are reported by for profit and not profit
organization?
First of all, organizations, whether for profit or not profit, borrow large amounts ...


Anonymous
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