Under the modified cash basis of accounting, adjustments are made only for prepaid
items and depreciation on plant and equipment.
The earnings base, against which the FICA tax is applied, and the tax rate have been
changed several times since the law was first enacted and can be changed by Congress
at any time in the future.
Almost any document that provides information about a business transaction is included
in the chart of accounts.
Elysa paid $135 for utilities for her office; this transaction increased Cash and the
expense account.
A business entity is an individual, association, or organization with control over
economic resources and which engages in economic activities.
Current liabilities are liabilities that are due within one year.
____________________ includes preparing various reports and financial statements
and analyzing operating, investing, and financing decisions.
It is not necessary to post adjusting entries.