FUND.ACCT.PRIN.
25th Edition
ISBN: 9781260247985
Author: Wild
Publisher: RENT MCG
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Textbook Question
Chapter 1, Problem 14DQ
A business reports its own office stationary on the
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27.A company writes off as uncollectible an account receivable from a bankrupt customer. The company has an adequate amount in its Allowance for Uncollectible Accounts. What would be the effect of this transaction in the company's financial statements?
a. Operating expenses for the period will increase.
b. Total current assets will decrease.
c. Net profit for the period will not be affected.
d. Net profit for the period will decrease.
Listed below are the current Accounting Assumptions and Principles
Economic Entity Assumption
Monetary Unit Assumption
Historical Cost Principle
Going Concern Assumption
Revenue Recognition Principle
Full Disclosure Principle
Time Period Assumption
Matching Principle
Required:
For the following situations, identify whether the situation represents a violation or a correct application of GAAP, and which assumption/principle is applicable.
a. In May 2021, Regent Corporation recorded as revenue $5,000 received in advance from a customer for a job that would be completed in June 2021.
Violation: (Yes/No)
Applicable Assumption/Principle:
b. Sally Maze made sure to keep her personal expenditures separate from her marketing company books.…
eps in the accounting cycle are required; none is optional.
ACTIVITY 4: IDENTIFYING THE ACCOUNTS AFFECTED
Instructions: Identify the ACCOUNTS TITTLES that are affected by the transactions
described below. The first item is given as an example.
TRANSACTIONS
ACCOUNTS TITTLES AFFECTED
Example: Owner's cash investment to
Cash
Owner's Capital
the business
1. Sale of goods on account (disregard
cost of sales)
2.Charging the cost of goods sold #1
above as expense
3.Purchase of inventory for cash
4.Payment of utilities expense
5. Payment of accounts payable
DELL
Chapter 1 Solutions
FUND.ACCT.PRIN.
Ch. 1 - Prob. 1QSCh. 1 - Prob. 2QSCh. 1 - Prob. 3QSCh. 1 - Prob. 4QSCh. 1 - Prob. 5QSCh. 1 - Prob. 6QSCh. 1 - This icon highlights assignments that enhance...Ch. 1 - Prob. 8QSCh. 1 - Prob. 9QSCh. 1 - Prob. 10QS
Ch. 1 - Prob. 11QSCh. 1 - Identifying items with financial statements P2...Ch. 1 - P2
Classify each of the following items as...Ch. 1 - P2
Classify each of the following items as assets...Ch. 1 - Preparing an income statement P2...Ch. 1 - Prob. 16QSCh. 1 - Prob. 17QSCh. 1 - Prob. 18QSCh. 1 - Prob. 19QSCh. 1 - Prob. 20QSCh. 1 - Prob. 21QSCh. 1 - Prob. 1ECh. 1 - Exercise 1-2 Identifying accounting users and uses...Ch. 1 - Prob. 3ECh. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Prob. 6ECh. 1 - Prob. 7ECh. 1 - Prob. 8ECh. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - Prob. 11ECh. 1 - Prob. 12ECh. 1 - Prob. 13ECh. 1 - Prob. 14ECh. 1 - Prob. 15ECh. 1 - Prob. 16ECh. 1 - Prob. 17ECh. 1 - Prob. 18ECh. 1 - Prob. 19ECh. 1 - Prob. 20ECh. 1 - Prob. 21ECh. 1 - Prob. 22ECh. 1 - Prob. 23ECh. 1 - Prob. 24ECh. 1 - Prob. 25ECh. 1 - Prob. 1PSACh. 1 - Prob. 2PSACh. 1 - Prob. 3PSACh. 1 - Prob. 4PSACh. 1 - Prob. 5PSACh. 1 - Prob. 6PSACh. 1 - Prob. 7PSACh. 1 - Prob. 8PSACh. 1 - Prob. 9PSACh. 1 - Prob. 10PSACh. 1 - Prob. 11PSACh. 1 - Prob. 1PSBCh. 1 - Prob. 2PSBCh. 1 - Prob. 3PSBCh. 1 - Prob. 4PSBCh. 1 - Prob. 5PSBCh. 1 - Prob. 6PSBCh. 1 - Prob. 7PSBCh. 1 - Prob. 8PSBCh. 1 - Prob. 9PSBCh. 1 - Prob. 10PSBCh. 1 - Prob. 11PSBCh. 1 - On October 1. 2019, Santana Rev launched a...Ch. 1 - Prob. 1AACh. 1 - Prob. 2AACh. 1 - Prob. 3AACh. 1 - Prob. 1DQCh. 1 - Technology is increasingly used to process...Ch. 1 - Prob. 3DQCh. 1 - What are at least three questions business owners...Ch. 1 - Prob. 5DQCh. 1 - Describe the internal role of accounting for...Ch. 1 - Identify three type of services typically offered...Ch. 1 - Prob. 8DQCh. 1 - Why is accounting described as a service activity?Ch. 1 - What are some accounting-related professions?Ch. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - Prob. 13DQCh. 1 - A business reports its own office stationary on...Ch. 1 - Why is the revenue recognition principle needed?...Ch. 1 - Prob. 16DQCh. 1 - Prob. 17DQCh. 1 - What events or transactions change equity?Ch. 1 - Prob. 19DQCh. 1 - What do accountants mean by the term revenue?Ch. 1 - 21. Define net income and explain its...Ch. 1 - Identify the four basics financial statements of a...Ch. 1 - Prob. 23DQCh. 1 - 24. Give two examples of expenses a business might...Ch. 1 - Prob. 25DQCh. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Prob. 28DQCh. 1 - Prob. 1BTNCh. 1 - Prob. 2BTNCh. 1 - Visit the EDGAR database at SEC.gov. Access the...Ch. 1 - Prob. 4BTN
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- 29)Revenue is properly recognized: (Hint: What is Revenue Recognition principle?) Group of answer choices At the end of the accounting period. Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price. Only if the transaction creates an account receivable. When the customer's order is received.arrow_forwardWhich of the following items is not a specific account in a company's chart of accounts? Multiple Choice Sales Revenue. Income Tax Expense. Deferred Revenue. Net Income. *********arrow_forwardAssume a company has a $350 credit ( not cash) sale. How would the transaction appear if the business uses accrual accounting ?arrow_forward
- What is the effect on the accounting equation when a business pays the balance due on accounts payable?arrow_forwardIDENTIFY THE EFFECT OF THE FOLLOWING TRANSACTION TO THE RISK OF MATERIAL MISSTATEMENT TO FINANCIAL STATEMENTS. The employees of the company are being paid on a weekly basis. Does it have a: A. INCREASE effect B. DECREASE effect C. NO EFFECT effectarrow_forwardTrue or False for the following statements: 1. Accounting can be defined as an information system that provides reports to users about the economic activities and condition of a business. 2. An account receivable is typically classified as a revenue, not an asset. 3. The allowance for doubtful accounts is an estimate based on past experience of the corporation. 4. Using FIFO method to calculate inventory can decrease tax payment. 5. The accounting equation can be expressed as Assets - Liabilities = Owner's Equity 6. If the liabilities owed by a business total S300,000 and owners equity is equal to $300,000, then the assets also total $300,000. 7. An account receivable is a claim against a customer arising from a sale on account. 8. The unit of measure concept requires that economic data be recorded in a common unit of measurement like RMB and U.S. dollar. 9. Paying off an account payable increases liabilities. 10. The normal balance of cash account is a debit.arrow_forward
- What is the impact on the accounting equation when a payment of accountable payable is made? what is the impact on accounting equation when an account receivable is collected? what is the impact on the accounting equation when a sell occurs? what is the impact on the accounting equation when stock is issued, in exchange for assets? which of the following accounts is increased by a debit? which of the following camp do not increase with a debit entry? which of the following pairs increase with credit entries? which of the following pairs of accounts are impacted the same with debits and credits? which of the following count normally have a debit balance? what type of account is prepaid insurance?arrow_forwardA company uses the direct write-off method to account for bad debts. What is the impact on the accounting equation of the entry to record the write-off of a customer’s account balance? Assets and liabilities decrease. Assets and shareholders’ equity decrease. Assets increase and shareholders’ equity decreases. Shareholders’ equity and liabilities decrease.arrow_forwardUnder the allowance method of uncollectible accounts, the entry to write off a customer’s account affects the accounting equation by: decreasing an asset and decreasing stockholders’ equity (expense) increasing an asset and decreasing an asset increasing a liability and decreasing a liability decreasing a liability and increasing stockholders’ equity (revenue)arrow_forward
- For all revenue that appears on a company's Income Statement, the company must have been paid in cash by the clients or customers already. Group of answer choices True Falsearrow_forwardThe Effect of Accounting Methods on Financial Statements: Q: 1a) Explain how two identical companies using the same accounting methods could show different net incomes because they used different inventory methods. Q: 1b) Give a hypothetical mathematical example of this occurring. Q: 2) A company has seen in the past that some of their credit customers never pay. Does this affect the financial statements for the current year?arrow_forwardHow would each of the following items be reported on the balance sheet? a. Accrued vacation pay. b. Estimated taxes payable. c. Service warranties on appliance sales. d. Bank overdraft. e. Employee payroll deductions unremitted. f. Unpaid bonus to officers. g. Deposit received from customer to guarantee performance of a contract. h. Sales taxes payable. i. Gift certificates sold to customers but not yet redeemed. j. Premium offers outstanding. k. Discount on notes payable. l. Personal injury claim pending. m. Current maturities of long-term debts to be paid from current assets. n. Cash dividends declared but unpaid. o. Dividends in arrears on preferred stock. p. Loans from officers.arrow_forward
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