Q1- Provide an example of each title here and then record the journal entries. Following the first given answer.
1-Providing consulting services receiving cash.
Given answer:
Ali company provides consulting service and receives 1,000 cash.
Cash. 1,000
Consulting Revenue. 1,000
2-Issuing common stocks receiving cash.
3-Purchasing land for cash.
4-Purchasing supplies on credit.
5-Borrowing money from a bank.
6-Paying employees their salaries.
Q2- Why do companies record adjusting journal entries at the end of the accounting periods? Give an example of unearned revenue and accrued expense.
Q3- On your own words, explain the purpose and the importance of the income statement, and
prepare the income statement for Max company based on the following information taken from the trial balance in December 2018
Revenue 70,000
Supplies expense 3,000
Rent expense 6,000
Wages expense 22,000
Sample Solution