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Explain the Purpose of FASB ASC 958-720-45 on Joint-Cost Accounting

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Essay

Explain the purpose of FASB ASC 958-720-45 on joint-cost accounting as it relates to reporting fund-raising and program expenses of a not-for-profit organization. How is this standard applied?


Definitions:

Closed

In accounting, refers to accounts that have been zeroed out at the end of an accounting period to prepare them for the next period.

Debit

A bookkeeping entry that increases the balance of asset and expense accounts, and decreases equity, liability, and revenue accounts.

Partnership Liquidation

The process of closing down a partnership by selling off assets, paying liabilities, and distributing the remaining assets to the partners.

Incorrect Step

A step in a process or procedure that has been performed wrongly, often leading to errors or undesired outcomes.

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