MATERIAL Definition

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MATERIAL is information important enough to change an investor's decision. Insignificant information has no effect on decisions, so there is no need to report it.

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OPEN BALANCE EQUITY is an account that is automatically created by QuickBooks whenever a company is created.  It is an equity account similar to Retained Earnings or Owner Capital. The Open Balance Equity account is basically a "plug" account used by QuickBooks to balance a transaction (basic accounting debits=credits). QuickBooks will enter a balance in the Open Balance Equity account for two reasons: beginning account balances or forced adjustments.

YEAR-END ADJUSTMENT is the process of adjusting the entry to an account at the end of the calendar or fiscal year in order to properly state it for financial statement preparation purposes. The various  required adjustments include accrual or deferral of a revenue or expense item, reclassification, to conform book figures to physical inventory counts, and reflecting unusual transactions.

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