Explain the Rules Regarding Totals and Subtotals in the Construction

question 23

Essay

Explain the rules regarding totals and subtotals in the construction of tables.

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Definitions:

Contra Expense Accounts

Accounts that are used to offset or reduce expense accounts on the income statement, resulting in the net amount of expense being reported.

Normal Credit Balances

Accounts on a company's balance sheet that are expected to have credit balances, such as liabilities, equity, and revenue.

Periodic Inventory System

An inventory accounting system where updates are made on a periodic basis, typically at the end of an accounting period, rather than continuously.

Perpetual Inventory System

An inventory management method where records of inventory quantities are updated on a continuous basis as sales and purchases are made.