You make adjusting entries in your accounting records at the end of an accounting period to account for revenues and expenses that you have earned or incurred but not yet recorded. Adjusting entries bring your records current so that you can prepare your financial statements and calculate your net income or net loss for the period. Show Your net income or net loss equals your total revenues minus your total expenses for an accounting period. If your revenues are greater than expenses, you have net income. If revenues are less than expenses, you have a net loss. Net income or loss is represented on the income statement and statement of owner's equity in year-end or quarterly financial statements. Identify Accounts with Debit BalancesIdentify each account in your general ledger that has a debit balance, such as assets, expenses and dividends, after you have made adjusting entries to your records. Identify each account that has a credit balance, such as equity accounts, liabilities and revenues. Adjusted Trial BalanceWrite each debit balance in the left column of your adjusted trial balance, which is a listing of your accounts used to prepare financial statements. Write each credit balance in the right column of your adjusted trial balance. Double-Check for ErrorsCalculate the sum of the amounts in the debit column and the sum of the amounts in the credit column. Verify that the sum of the debit column equals the sum of the credit column to ensure that the debits and credits in your records balance. If they are unequal, check your general ledger accounts for errors. Calculate Total RevenueSum the revenue account balances in the credit column of your adjusted trial balance to determine total revenue for the period. For example, if your product revenue account balance is $10,000 and your service revenue account balance is $5,000, add $10,000 and $5,000 to get $15,000 in total revenue. Determine Total ExpensesSum the expense account balances in the debit column of your adjusted trial balance to determine total expenses during the period. In this example, if you have $4,000 in salaries expense, $1,000 in administrative expense, $2,000 in utilities expense and $3,000 in advertising expense, add these amounts to get $10,000 in total expenses. Find Net Income or LossSubtract total expenses from total revenue to determine your net income or net loss. If your result is positive, you have net income. If it is negative, you have a net loss. In this example, subtract $10,000 in total expenses from $15,000 in total revenue to get $5,000 in net income. 11.If a business had a net loss for the year, where would the net loss be reported onthe worksheet? 12.What is the closing process? 13.What are temporary accounts? Are temporary accounts closed in the closingprocess?  14.What are permanent accounts? Are permanent accounts closed in the closingprocess? We have textbook solutions for you!The document you are viewing contains questions related to this textbook. College Accounting, Chapters 1-27 Heintz/Parry Expert Verified ACCOUNTING - Tenth EditionSolutions Manualpermanent accounts.15.How is the Income Summary account used? Is it a temporary or permanent account? Chapter 4: Completing the Accounting CyclePage 4 of 244 16.What are the steps in the closing process? If a business had a net loss for the year, where would the net loss be reported on the worksheet? 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A: Retained earnings (RE) is the amount of net income left over for the business after it has paid out… Knowledge Booster Learn more about Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below. SEE MORE QUESTIONS Recommended textbooks for you Financial Accounting: The Impact on Decision Make... ISBN:9781305654174 Author:Gary A. Porter, Curtis L. Norton Publisher:Cengage Learning Financial Accounting: The Impact on Decision Make... ISBN:9781305654174 Author:Gary A. Porter, Curtis L. Norton Publisher:Cengage Learning Where does net loss appear on the worksheet?Net loss is entered as a credit at the bottom of the Income Statement section of the work sheet. On the same line, enter the net loss amount in the Balance Sheet debit column. Complete the worksheet as with a net income: draw a single line across all 4 columns.
What happens if a company reports a net loss?If a company reports a net loss, it may still have a net increase in cash because the net income is determined by deducting non-cash expense such as depreciation expense. Such expense does not reduce the operating cash flow but it certainly reduces the net income.
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If a business had a net loss for the year, where would the net loss be reported on the worksheet
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