Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 1EA
To determine
Identify the actions that are business transactions and give reason for actions that are not considered as business transaction.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Answer the questions after reading the passages.
1.Mario is engaged in a pharmaceutical business. One day, Mario unnecessarily bought from Dario a truckload of supplies and medicines to be sold in his pharmacy so that he could post the cost in his ledger as expense to reduce his tax liability. Is the contract of sale between Mario and Dario valid? Why or why not?
2. Joanna entered into a loan contract with Marie over Marie’s car where Joanna is the borrower and Marie is the lender. It was stated in the contract that the ownership will be transferred to Joanna. The title to the car was given to Joanna who registered the car in her name. Before the end date of the contract, Joanna expressed her intention to buy the car. But Marie refused to agree to Joanna’s intent. Was Marie correct in refusing to agree to Joanna’s intent? Why or why not
3. Scott requested Jenny to work with the Bureau of Internal Revenue (BIR) in further reducing the tax liability of the company believing her to be an…
Mario is engaged in a pharmaceutical business. One day, Mario unnecessarily bought from Dario a truckload of supplies and medicines to be sold in his pharmacy so that he could post the cost in his ledger as expense to reduce his tax liability. Is the contract of sale between Mario and Dario valid? Why or why not? 2. Joanna entered into a loan contract with Marie over Marie’s car where Joanna is the borrower and Marie is the lender. It was stated in the contract that the ownership will be transferred to Joanna. The title to the car was given to Joanna who registered the car in her name. Before the end date of the contract, Joanna expressed her intention to buy the car. But Marie refused to agree to Joanna’s intent. Was Marie correct in refusing to agree to Joanna’s intent? Why or why not? 3. Scott requested Jenny to work with the Bureau of Internal Revenue (BIR) in further reducing the tax liability of the company believing her to be an accountant. Meanwhile, Jenny took advantage of…
Peter Pan is a self-employed delivery driver. On one delivery trip, Peter
Pan received a $100 ticket for being double parked in violation of city
traffic laws. In an attempt to avoid the ticket, Peter Pan slipped the
parking enforcement officer a $20 bill to "look the other way".
Unfortunately, the parking enforcement officer took the $20, but still
gave Peter Pan the ticket.
How much of the $120 can Peter Pan deduct as a business expense?
Chapter 1 Solutions
Principles of Accounting
Ch. 1 - What makes accounting a valuable discipline?Ch. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - How are expenses and withdrawals similar, and how...Ch. 1 - How do generally accepted accounting principles...Ch. 1 - Why do managers in governmental and not-for-profit...Ch. 1 - Prob. 1SECh. 1 - Match the descriptions that follow with the...Ch. 1 - Determine the amount missing from each accounting...Ch. 1 - Use the accounting equation to answer each...
Ch. 1 - Use the accounting equation to answer each...Ch. 1 - Prob. 6SECh. 1 - Use the following accounts and balances to prepare...Ch. 1 - Randall Company engaged in activities during the...Ch. 1 - Prob. 9SECh. 1 - Prob. 10SECh. 1 - Prob. 1EACh. 1 - Financial accounting uses money measures to gauge...Ch. 1 - You have been asked to compare the sales and...Ch. 1 - Use the accounting equation to answer each...Ch. 1 - Daiichi Companys total assets and liabilities at...Ch. 1 - 1. Indicate whether each of the following accounts...Ch. 1 - Listed in random order are some of Oxford Services...Ch. 1 - Dukakis Company had the following accounts and...Ch. 1 - Prob. 9EACh. 1 - Prob. 10EACh. 1 - Complete the financial statements that follow by...Ch. 1 - Prob. 12EACh. 1 - Match the terms that follow with the appropriate...Ch. 1 - Prob. 14EACh. 1 - Prob. 15EACh. 1 - Prob. 1PCh. 1 - The following three independent sets of financial...Ch. 1 - Fuel Designs financial accounts follow. The...Ch. 1 - The accounts of Frequent Ad, an agency that...Ch. 1 - Athena Riding Clubs financial statements follow.Ch. 1 - A list of financial statement items follows....Ch. 1 - Three independent sets of financial statements...Ch. 1 - Prob. 8APCh. 1 - Prob. 9APCh. 1 - Aqua Swimming Clubs financial statements follow....Ch. 1 - Costco Wholesale Corporation is Americas largest...Ch. 1 - Prob. 2CCh. 1 - Prob. 3CCh. 1 - Prob. 4CCh. 1 - Refer to the CVS annual report and the financial...
Knowledge Booster
Similar questions
- Bob owns a boat supply store in Grosse Point. In March Bob borrows $1million from Mafia Bank to purchase Governor Snyder’s yacht. Mafia Bank takes a Security Interest in the yacht but does not perfect. In May, Bob borrows money from Premier Bank to purchase inventory. Premier takes a security interest in all inventory and files a financing statement. In June, Mafia Bank files a financing statement. If Bob defaults on all his loans, who wins?arrow_forwardWrett purchases a new four-wheeler with a loan from his bank. The bank requires that he use his car, which is paid off, as collateral for the loan he secured from the bank. The value of the 4-wheeler is $2500.00. The value of the car is $15,000.00. Wrett defaults on his loan for the 4-wheeler and thus is forced to sell his car to repay the loan. Which statement below is true regarding this secured transaction? Multiple Choice Since the value of the car far exceeds the value of the 4-wheeler, the bank must accept an alternate good closer to value of the 4-wheeler. Wrett must dispose of his car and apply the proceeds to the loan and if there is any surplus the money belongs to Wrett. The bank will sell the car for the value of the loan of the 4-wheeler, not the actual fair market value of the car. Wrett must hand over physical possession and title to the car. In a workout, creditors are usually paid in all of the following ways except, Multiple Choice Bankruptcy…arrow_forwardAlexander is a resident of Utah, where gambling is illegal. Alexander visits Goldstrike Casino in Reno, Nevada, and loses all the money he brought with him. Frustrated with his losses and determined to win his money back, Alexander writes a check to Goldstrike drawn on his bank in Utah for $5,000 to obtain more cash so that he can keep gambling. Goldstrike also requires him to sign an agreement guaranteeing that he will repay any money advanced to him. Fortunately, Alexander’s luck turned; he walks away from Goldstrike with $35,000 in his pocket. As soon as he gets home, Alexander issues a stop payment order on the $5,000 check. If Goldstrike files suit against Alexander in Utah to collect its money: a) Goldstrike will win because the full faith and credit clause of the U.S. Constitution requires each state to honor the laws of its sister states. b) Goldstrike will lose because suits over gambling on credit cannot be enforced across state lines. c) Goldstrike…arrow_forward
- roger owns a bicycle shop. once a week he and a group of friends rent the gym of the local club to play basketball. roger collects cash from the group and writes a check to the club on his business account. he then deducts the payment as a business expense. comment on the ethics exhibited by roger and the possible consequences of his actions.arrow_forwardJane has written out a check to Manny for $100. Unfortunately, the check was stolen by Stringer Bell who sold it to Freddy for $90. Stringer signed Manny's name even though he is not Manny. Freddy has no idea of the wrongdoing. Freddy presents the check to the bank but Jane and the bank say, "No way". Can Freddy get the $100? How?arrow_forwardStrong Arm Steve, a cash basis calendar year taxpayer, runs an illegal protection business. Basically, small businesses in his neighborhood pay him money to gain protection from theft. During the current year, a bill, H.R. 55, is introduced into the state legislature which, if enacted, would legalize his protection racket. Strong Arm Steve had the following expenses for the year: Operating expenses in conducting his business Payoffs to the cops to allow him to bully small businesses Newspaper ads supporting H.R. 55, no mention of his business in the ad. Political contributions to legislators who support H.R. 55 Of these expenditures, Strong Arm teve may deduct: O $100,000. O $120,000. $125,000. O $135,000. $100,000 20,000 5,000 10,000arrow_forward
- Joanna takes a security interest in the equipment in Jason Store and files a financing statement claiming “equipment and all after acquired equipment.” Berkeley later sells Jason Store a cash register, taking a security interest in the register, and (a) files nine days after Jason receives the register or (b) files twenty-five days after Jason receives the register. If Jason fails to pay both Joanna and Berkeley and they foreclose their security interests, who has priority on the cash register? Explain.arrow_forwardFarah and David decide to form a sports memorabilia retail partnership. They have known each other since business graduate school and have always worked well together on various projects. The business is doing well but cash flow is very tight. Farah takes several calls from vendors asking for payment. He believed David had been paying the bills. When he asks about this, David admits to embezzling from the partnership. What liability does Farah face as a result of the theft? Are you for or against a partnership? Please explain.arrow_forwardMartin Manera is one of three partners who own and operate TaftWorld, a global import and export business. Martin is the partner in charge of recording partnership transactions in the accounts. One day while driving to work, Martin’s car broke down. Upon inspection, the mechanic discovered the engine had to be replaced at a cost of $5,000. Martin does not have enough money in his bank account and his credit cards are at their limits. He has to have this car to come to work, and he only uses his car for this purpose. He decides to take $5,000 from the partnership for the repair and record it as an expense of the partnership. What are three ethical issues in this scenario?arrow_forward
- Tom gave his daughter, Nicole, permission to access his business account online but not his principal account. Tom has just discovered that Nicole took P25,000 from the principal account (current account) hoping her father would not notice it. As Tom wrote to the manager of his local bank months ago, expressly forbidding the bank to allow his daughter to do this, he wants the bank to refund the P25,000. With respect to BDO Online Account Opening Service (“Service”) Terms and Conditions, what recommendation can you give him?arrow_forwardTrent is broke and needs cash immediately to pay off a debt he incurred. He visits the local pawn shop and leaves his grandfather’s watch in exchange for $100.00 cash. This is an example of what type of loan? Multiple Choice Unsecured loan Chattle loan UCC loan Secured loan The Environmental Defense Fund, an environmental watchdog group, files a lawsuit to prevent future open-pit coal mining in West Virginia. This type of lawsuit is known as a Multiple Choice wrongful-damage suit. negligence suit. citizen suit. nuisance suit. All of the following may be used as collateral for a secured transaction except Multiple Choice Future profits of a business A promissory note A patent Seeds and cropsarrow_forwardMichelle operates several food trucks. Indicate the amount (if any) that she can deduct as an ordinary and necessary business deduction in each of the following situations. Note: Leave no answers blank. Enter zero if applicable. a. Michelle moves her food truck between various locations on a daily rotation. Last week, Michelle was stopped for speeding. She paid a fine of $160 for speeding, including $115 for legal advice in connection with the ticket. b. Michelle paid $785 to reserve a parking place for her food truck for the fall football season outside the local football stadium. Michelle also paid $130 for tickets to a game for her children. c. Michelle provided a candidate with free advertising painted on her truck during the candidate's campaign for city council. Michelle paid $640 to have the ad prepared and an additional $340 to have the ad removed from the truck after the candidate lost the election. d. Michelle realized a $1,235 loss when she sold one of her food trucks to her…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT