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Paper Topic:

Week 6 Acc

Running Head : Week 6 Accounting

Week 6 Accounting

Name of Student

Name of Subject Course

Name of Professor

18 February 2008

The following are the answer to the three questions from a case study entitled : Subway Case : Closing Time

How would the adjustment be made if Wanda Kurtz received 7 .00 per hour and worked 25 additional hours ? Where do you place her accrued wages

There will be an accrued wages that would have to be provided in the account by debiting to Salaries expense and crediting to Accrued

br wages . The Accrued wages is a liability account that will finally appear in the balance sheet under current assets while the Salary expense account will appear in the income statement

Stan bought three new Subway aprons and hats for Wanda Smith for 20 each but forgot to post it to the Uniform account . How much will the closing balance be off ? In what way will it be off

Multiplying three Subway aprons and hats for 20 each would give a product of 60 understatement in the Uniform account . The closing will off by 60 because of the failure to post to the Uniform Account which is an expense account . The same will result to understatement of the higher than the inside the worksheet (Meigs and Meigs , 2005

Put yourself in Stan 's shoes : What is the value of doing a monthly closing , no matter how much - or little- business you do

The value of closing is make a proper cut off of transactions that is applicable to the accounting period . Failure therefore to make a closing cause either an understatement or overstatement of accounts depending of the effect of transactions . Such failure would in effect cause misstatement of the financial statements that would also result to wrong business decisions

Case facts confirm this observation that closing book will allow companies to clearly measure the net profit and loss for each period separate from all other periods (Subway Case : Closing Time , n .d ) The closing practice will also make activities like budgeting and comparing performance with similar business (or performance over time ) possible as per case facts (Subway Case : Closing Time , n .d References

Meigs and Meigs (1995 ) Financial Accounting , McGraw-hill , New York , USA

Subway Case : Closing Time (n .d ) Case Study

Realism and Rational Theory...

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