Identify Which of the Following Are Temporary Accounts of Potter

question 8

Essay

Identify which of the following are temporary accounts of Potter Company.
(1) Potter, Capital
(2) Potter, Drawing
(3) Equipment
(4) Accumulated Depreciation
(5) Depreciation Expense

---

Definitions:

Discount Rate

A rate used to determine the present value of future cash flows.

Incremental Cash Flow Principle

The concept that financial decisions should be made based on the changes in cash flows that the decisions will cause, ignoring cash flows that will not be affected.

Negative Effects

Adverse outcomes or impacts that result from an action, event, or policy.

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not affect future business decisions.