1. Why is it important for Evan and Bobby to match expenses and revenues in a specific time period? How do closing entries help themin this regard?2. What objectives are met when Even and Bobby apply closing procedures each fiscal year-end?

J. Emilio Flores/Corbis/Getty Images The first headquarters of Snapchat was the home of Evan's dad. However, within a matter of months, their app had over a million users. As Snapchat grew, Evan and Bobby knew an effective accounting system was key to attracting investors. "One of the things I did underestimate," admits Evan, "was how much more important communication becomes [when seeking investors]." Investors wanted to know revenues, costs, assets, and liabilities for Snapchat. "You really need to explain . . . how your business works," insists Evan. To communicate "the Snap story," the entrepreneurs learned how to defer and accrue revenues and expenses and to prepare financial statements for investors. This included learning the accounting cycle. With accounting reports in hand, Evan and Bobby were able to secure additional financing. Exclaims Evan: "That was the greatest feeling of all time!" Sources: Snapchat website, January 2020; Vanity Fair, October 2017; LA Times, March 2017; Forbes, January 2014