Financial Information
BTN 4-7 Review this chapter’s opening feature involving Arynetta Floyzelle and her Girl Team Mobile business.
1. Explain how a classified balance sheet can help Arynetta Floyzelle know what bills are due when, and whether she has the resources to pay those bills.
A classified balance sheet organizes assets and liabilities into important subgroups that provide more information to decision makers. (Wild, 2013, p. 149) What makes this balance sheet unique is that it details the current & noncurrent assets and matches the information with the current & noncurrent liabilities in order to determine what & when cash and other resources are scheduled to be paid as well as what’s coming due for the company. This type of financial statement would be beneficial to Arynetta in that it would help streamline the accounts for her company and assist her with staying current with what she owes as well as allow her to keep track of what is owed to the company. This balance sheet will also give her a quick snapshot of how well her company is progressing financially.
2. Why is it important for Arynetta Floyzelle to match costs and revenues in a specific time period? How do closing entries help her in this regard?
In order for Arynetta to remain efficient in reporting the revenue and expenses of her business, she must begin each new period with a zero balance. Also, the “Owner’s capital must reflect prior periods’ revenues, expenses, and withdrawals.” (Wild, 2013, p. 145)
Using closing entries will assist her in doing this by
3. What objectives are met when Arynetta Floyzelle applies closing procedures each fiscal
1. Explain how a classified balance sheet can help Arynetta Floyzelle know what bills are due when, and whether she has the resources to pay those bills.
A classified balance sheet organizes assets and liabilities into important subgroups that provide more information to decision makers. (Wild, 2013, p. 149) What makes this balance sheet unique is that it details the current & noncurrent assets and matches the information with the current & noncurrent liabilities in order to determine what & when cash and other resources are scheduled to be paid as well as what’s coming due for the company. This type of financial statement would be beneficial to Arynetta in that it would help streamline the accounts for her company and assist her with staying current with what she owes as well as allow her to keep track of what is owed to the company. This balance sheet will also give her a quick snapshot of how well her company is progressing financially.
2. Why is it important for Arynetta Floyzelle to match costs and revenues in a specific time period? How do closing entries help her in this regard?
In order for Arynetta to remain efficient in reporting the revenue and expenses of her business, she must begin each new period with a zero balance. Also, the “Owner’s capital must reflect prior periods’ revenues, expenses, and withdrawals.” (Wild, 2013, p. 145)
Using closing entries will assist her in doing this by
3. What objectives are met when Arynetta Floyzelle applies closing procedures each fiscal