Concept Description 1. Cash-basis accounting. 2. Fiscal year. 3. Revenue recognition principle. Recognize revenue in the accounting period in which a performance obligation is satisfied 4. Expense recognition principle.
Q: Under the general rule of revenue recognition, revenue is recognized when Group of answer choices…
A: The revenue recognition principle says that we need to recognize the revenue at the time when goods…
Q: The revenue recognition principle dictates that revenue be recognized in the accounting period…
A: The revenuerve recognition principle states that every business organization should recognize the…
Q: The statement 'revenue is recognized in the accounting period in which the performance obligation is…
A: The revenue recognition principal state that the the revenue should be recognised in books when the…
Q: a. Prepare an income statement for the year using the "functional" method with supporting notes. b.…
A: Introduction: Expenses in an income statement are categorized in keeping with their nature or…
Q: (Recognition of Revenue—Theory) Revenue is recognized for accounting purposes when a performance…
A: Accounting: Accounting is a system, or a process of collecting and organizing economic…
Q: The income statement in which the total of all expenses is deducted from the total of all revenues…
A: The income statement is prepared to find net income or losses incurred during the period.
Q: REQUIRED: PREPARE A STATEMENT OF COMPREHENSIVE INCOME IN A PRESCRIBED FORMAT FOR THE YEAR USING THE…
A: An income statement is one of the financial statements that shows the financial position of the…
Q: In which of the following types of accounts are increases recorded by credits? A. revenues and…
A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…
Q: True or False questions I. Under the accrual basis of accounting, revenues are recognized when they…
A: The accrual basis of accounting is the concept of recording revenues when earned and expenses as…
Q: (a)Explain, using practical example the effect of accruals figures on the preparation of a…
A: "Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: The accrued balance in a revenue account represents an amount which is: A. earned and collected B.…
A: Revenues: Revenues are earnings from operations of a business. The operating activities are sale of…
Q: Which of the following liabilities is created when a company receives cash for services to be…
A: Liabilities: The claims creditors have over assets or resources of a company are referred to as…
Q: What is the adjusting entry for accrued revenues? O A. Debit: Assets; Credit: Revenues. O B. Debit:…
A: Adjusting entries are to be reported at the end of the period in order to adjust the events happened…
Q: Deferred revenues represent liabilities recorded when cash is received from customers in advance of…
A: Adjusting entries:Adjusting entries are the journal entries, which are recorded at the end of the…
Q: A change from cash basis to accrual basis should be reported A. Retroactively as a correction of…
A: Cash basis refers to the accounting of the transactions as and when the cash is received. Whereas…
Q: 1. Record the preceding transactions in MSK's books assuming it recognizes revenue over time and…
A: Given: Estimation of factory building = $ 525,000
Q: Under what conditions does a company recognize revenueover a period of time?
A: Revenue recognition principle: The revenue recognition principle refers to the revenue that should…
Q: How is the valuation of cuIrent assets affected if the company follows IFRS? OValuation is based on…
A: SOLUTION- HISTORICAL COST IS THE ORIGINAL OF AN ASSET , AS RECORDED IN AN ENTITY'S ACCOUNTING…
Q: The concept underlying the malching at Net income shouid be reported on an annua basis. a. b. All…
A: Accounting Principles- Accounting principles are the ideologies that are to be applied by a…
Q: When recognizing revenue, a company has a performance obligation when it agrees to receives cash…
A: Solution: When recognizing revenue, a company has a performance obligation when it agrees to…
Q: Which of the following is a liability created when a company receives cash for services to be…
A: Unearned Revenue: Unearned Revenue means money received from the customer in advance for the service…
Q: which of the following is an accounting concept which serves as the basis for revenue and expense…
A: Accounting principles: Accounting principles are the conventions or rules that must be followed in…
Q: rue or false The financial manager prepares financial statements that recognize revenue at the…
A: Solution: True. The financial manager does not prepares financial statements that recognize revenue…
Q: There are four basic assumptions of financial accounting: (1) economic entity, (2) fiscal period, (3)…
A: Among the given four assumptions let us choose assumption (2) Fiscal period
Q: Brief Exercises Identify the order of the five steps in the revenue recognition process. BE3.1 (LO…
A: Revenue recognition is the process of recognising the revenue from the sale of goods and services in…
Q: The recognition principal of accrual accounting says revenue is recognized: Based on the firm’s…
A: Solution- The accrual basis of accounting recognizes revenues when earned (a product is sold or a…
Q: In which of the following types of accounts are increases recorded by credits? Question 8 options:…
A:
Q: Which of the following increases the current assets of a business entity? A) Consumable inventory…
A: Current assets are those assets in the business entity which are either in cash or can be converted…
Q: The accounting concept that supports reporting revenues in the period in which they are earned is…
A: Explanation: 1. Revenue recognition concept: As per the revenue recognition concept, revenues are…
Q: Under the accrual basis of accounting, revenue is recorded O when earned and realizable O when…
A: (Note: Since you have posted multiple questions, we will solve the first question for you. For the…
Q: 6. Under the accrual basis of accounting, cash receipts and disbursements may _____ the period in…
A: At the purpose once exchanges area unit recorded within the books of records as they happen despite…
Q: Differential fiscal year from calendar year. In contrast with cash basis accounting, what is accrual…
A: Solution:- Calendar year means"- A calendar year is a one-year period . In other words calendar year…
Q: 22. Unearned income is recorded by an entity that A. Pay money in advance before performance of…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: The revenue recognition principle requires Time to be divided into annual periods to measure…
A:
Q: Advanced collections from customers prior to the performance obligation being satisfied is accounted…
A: 1) Advanced collections from customers prior to the performance obligation being satisfied is…
Q: Under accrual-basis accounting, revenues are always recognized when Cash is received Earned The…
A: Lets understand the basics. There are two type of accounting systems are followed which are, (1)…
Q: s liabilities incurred prior year, what is the proper debit
A: Option a is wrong because accounts receivable is not liability, it is an asset. Option b is wrong…
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- You are the accountant for Kamal Fabricating, Inc. and you oversee the preparation of financial statements for the year just ended 6/30/2020. You have the following information from the companys general ledger and other financial reports (all balances are end-of-year except for those noted otherwise: Prepare the companys Statement of Retained Earnings.Types of Events For each of the following events, identify whether it is an external event that would be recorded as a transaction (E), an internal event that would be recorded as a transaction (I), or not recorded (NR). ________________ 1. A vendor for a companys supplies is paid an amount owed on account. ________________ 2. A customer pays its open account. ________________ 3. A new chief executive officer is hired. ________________ 4. The biweekly payroll is paid. ________________ 5. Depreciation on equipment is recognized. ________________ 6. A new advertising agency is hired to develop a series of newspaper ads for the company. ________________ 7. The advertising bill for the first month is paid. ________________ 8. The accountant determines the federal income taxes owed based on the income for the period.Accounting concepts Match each of the following statements with the appropriate accounting concept. Sonic concepts may he used more than once, while others may not be used at all. Use the notat ions shown to indicate the appropriate accounting concept. Statements 1. Assume that a business will continue forever. 2. Material litigation involving the corporation is described in a note. 3. Monthly utilities costs are reported as expenses along with the monthly revenues. 4. Personal transactions of owners are kept separate from the business. 5. This concept supports relying on an independent actuary (statistician), rather than the chief operating officer of the coq)ration, to estimate a pension liability. 6. Changes in the use of accounting methods from one period to the next are described in the notes to the financial statements. 7. Land worth $800,000 is reported at its original purchase price of $220,000. 8. This concept justifies recording only transactions that are expressed in dollars. 9. If this concept was ignored, the confidence of users in the financial statements could not be maintained. 10. The changes in financial condition are reported at the end of the month.
- PURPOSE OF ACCOUNTING Match the following users with the information needed. 1. Ownersa. Whether the firm can pay its bills on time 2. Managersb. Detailed, up-to-date information to measure business performance (and plan for future operations) 3. Creditorsc. To determine taxes to be paid and whether other regulations are met 4. Government agenciesd. The firms current financial conditionNet Income (or Loss) and Retained Earnings The following information is available from the records of Prestige Landscape Design Inc. at the end of the year: Required Use the previous information to answer the following questions. What is Prestiges net income for the year? What is Prestiges Retained Earnings balance at the end of the year? What is the total amount of Prestiges assets at the end of the year? What is the total amount of Prestiges liabilities at the end of the year? How much owners equity does Prestige have at the end of the year? What is Prestiges accounting equation at the end of the year?Comparing Two Companies in the Same Industry: Chipotle and Panera Bread Refer to the financial information for Chipotle and Panera Bread reproduced at the end of this book and answer the following questions: Required What is the dollar amount of inventories that each company reports on its balance sheet at the end of the most recent year? What percentage of total assets do inventories represent for each company? What does this tell you about the nature of their business? Refer to Note 1 in Chipotles annual report. What inventory valuation method does the company use? Refer to Note 2 in Panera Breads annual report. What inventory valuation method does the company use? How do both companies deal with situations in which the market value of inventory is less than its cost? Given the nature of their businesses, which inventory system, periodic or perpetual, would you expect both Chipotle and Panera Bread to use? Explain your answer.
- You are the accountant for Trumpet and Trombone Manufacturing, Inc. and you oversee the preparation of financial statements for the year just ended 6/30/2020. You have the following information from the companys general ledger and other financial reports (all balances are end-of-year except for those noted otherwise): Prepare the companys Statement of Retained EarningsTransactions Reconstructed from Financial Statements The following financial statements are available for Elm Corporation for its first month of operations: Required Using the format illustrated in Exhibit 3-1, prepare a table to summarize the transactions entered into by Elm Corporation during its first month of business. State any assumptions you believe are necessary in reconstructing the transactions.Accounting Principles and Assumptions The following basic accounting principles and assumptions were discussed in the chapter: Economic entity Monetary unit Cost principle Going concern Time period Fill in each of the blanks with the accounting principle or assumption that is relevant to the situation described. ________________________________ 1. Genesis Corporation is now in its 30th year of business. The founder of the company is planning to retire at the end of the year and turn the business over to his daughter. ________________________________ 2. Nordic Company purchased a 20-acre parcel of property on which to build a new factory. The company recorded the property on the records at the amount of cash given to acquire it. ________________________________ 3. Jim Bailey enters into an agreement to operate a new law firm in partnership with a friend. Each partner will make an initial cash investment of $10,000. Jim opens a checking account in the name of the partnership and transfers $10,000 from his personal account into the new account. ________________________________ 4. Multinational Corp. has a division in Japan. Prior to preparing the financial statements for the company and all of its foreign divisions, Multinational translates the financial statements of its Japanese division from yen to U.S. dollars. ________________________________ 5. Camden Company has always prepared financial statements annually, with a year-end of June 30. Because the company is going to sell its stock to the public for the first time, quarterly financial reports will also be required by the SEC.
- Comparing Two Companies in the Same Industry: Chipotle and Panera Bread Refer to the financial information for Chipotle and Panera Bread reproduced at the back of the book and answer the following questions. What was the total revenue for each company for the most recent year? By what percentage did each companys revenue increase or decrease from its total amount in the prior year? What was each companys net income for the most recent year? By what percentage did each companys net income increase or decrease from its net income for the prior year? What was the total asset balance for each company at the end of its most recent year? Among its assets, what was the largest asset each company reported on its year-end balance sheet? Did either company pay its stockholders any dividends during the most recent year? Explain how you can tell.Which of the following breaks down company financial information into specific time spans, and can cover a month, quarter, half-year, or full year? A. accounting period B. yearly period C. monthly period D. fiscal periodConsidering the following events, determine which month the revenue or expenses would be recorded using the accounting method specified. a. Gerber Company uses the cash basis of accounting. Gerber prepays cash in May for insurance that only covers the following month, (June). b. Matthews and Dudley Attorneys uses the accrual basis of accounting. Matthews and Dudley Attorneys receives cash from customers in June for services to be performed in July. c. Eckstein Company uses the accrual basis of accounting. Eckstein prepays cash in October for rent that covers the following month, (October). d. Gerbino Company uses the cash basis of accounting. Gerbino makes a sale to a customer in February but does not expect payment until March.