Accounting Help(Grade11), I have few questions ,, i am behind,?

Question

Few question in grade 11 accounting,, i couldn't find answer for these, help,, i have test tommorrow, i got the other questions done,,

-describe the differences between six- and eight-column worksheets,

-Give an example of the term book value and explan it.
-Why are adjusting entries necessary?
-Which accounts are closed?
-What purpose is served by closing the books?
-How is the balance sheet divided when preparing it?
-What is the purpose of the statement of oe?

-list the steps associated with the completion of an eight-column worksheet

please write the answers u know, because i really have to study for the test and i don't know the answer for it because i am behind in school, and i don't have good mark, and i am reviewing hard please help me,,

it will be very helpful if u at least right the answers u know for some questions

Answer 1

Adjusting entries are necessary because:

MULTI-PERIOD ITEMS: Some revenue and expense items may relate to more than one accounting period, or
ACCRUED ITEMS: Some revenue and expense items have been earned or incurred in a given period, but not yet entered into the accounts (commonly called accruals).
In other words, the ongoing business activity brings about changes in economic circumstance that have not been captured by a journal entry. In essence, time brings about change, and an adjusting process is needed to cause the accounts to appropriately reflect those changes. These adjustments typically occur at the end of each accounting period. (See the 1st link on adjusting entries)

The purpose of the closing process is two-fold:
1. Closing is a mechanism to update the retained earnings account in the ledger to equal the end-of-period balance. Keep in mind the recording of each item of revenue, expense, or dividend does not automatically produce an updating debit or credit to retained earnings. As such, the beginning-of-period retained earnings amount remains in the ledger until the closing process "updates" the retained earnings account for the impact of the period's operations.
2. Revenue, expense, and dividend accounts represent amounts for a period of time; one must "zero out" these accounts at the end of each period (as a result, revenue, expense, and dividend accounts are called temporary or nominal accounts). In essence, by zeroing out these accounts, one has reset them to begin the next accounting period. In contrast, asset, liability, and equity accounts are called real accounts, as their balances are carried forward from period to period. For example, one does not "start over" each period accumulating assets like cash and so on -- their balances carry forward.
Closing involves a four step process: (a) close revenue accounts (to a unique account called Income Summary -- a non-financial statement account used only to facilitate the closing process), (b) close expense accounts to Income Summary, (c) close the Income Summary account to Retained Earnings, and (d) close the Dividend account to Retained Earnings. By doing this, all revenues and expenses are "corralled" in Income Summary (the net of which represents the income or loss for the period). In turn, the income or loss is then swept to Retained Earnings along with the dividends.
(See the 2nd link for the closing process)

Answer 2

Worksheets or spreadsheets are just a tool to help a bookkeeper to be organized. They are not a statement and they are not given to anyone. Depending on the needs of a business, they can be tailored to suit the business. One column is to balance your ledger balances-trial balance. One column is for the adjustments. The next column is the totals after adjustments-adjusted trial balance. Then you pull the figures for your income statement. Pull your figures for your balance sheet. Anything more would be whatever you are trying to figure. The income statement figures are going to be closed so you could have a post closing trial balance. Some adjustments may need to be reversed and you could show that then another trial balance. Asset minus depreciation =bookvalue which is not the same as market value or the price you could get if you sold that item. A truck purchased for 40,000 is believed to last 10 years so it is depreciated 4,000 a year. The 1st year its BV would be 36,000 the 2nd 32,000 but you could sell it for more or less which is its market value. Adjustments are made to show true value. Depreciation adjustments are made to show that your assets are not new and no longer at their purchase value. You may have people who owe you money and you would figure how much may not be paid to you. You have interest on loans which is paid later on but you need to know how much applied to the current period. You may owe money or have money owed to you which has not been written down. You want to match your revenues and expenses. You close revenue and expenses which is income statement accounts. Your income statement is for a certain time period and at the end of that period you total and close those accounts (revenues and expenses) Then start all over again accumulating those figures. The balance sheet is just a review of the figures on a certain day and never close (assets, liability, capital) these acounts are how you divide the balance sheet. Owner's equity shows changes in capital or owner's share of the business. The income statement is figured first. There you get a profit or loss and that figure has to added(profit) or subtracted(loss) from the owner's share. Then you use that figure to put into your balance sheet. See above for the last question.