1. A ledger account does not have the word asset, liability or equity recorded on it. How can you tell if the account is an asset, a liability or equity?

2.Suppose that the nominal accounts are not closed out (zero balance) at the end of the fiscal period. Explain how this affects account data for the next fiscal period (use the words overstated and understated).

3.The balance in the Capital account of O.K. Suppliers on January 1, 2016, was $26 000. The balance in this account was $27 500 at the end of the year. Net income for the year was $5000. Explain why the balance in the Capital account was not $31 000.