For financial accounting purposes, the salary of Lake Company’s president is classified as a(n)______________________, because the salary will appear on the income statement as an expensein the time period in which it is incurred.
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For financial accounting purposes, the salary of Lake Company’s president is classified as a(n)______________________
, because the salary will appear on the income statement as an expense
in the time period in which it is incurred.
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- Yang Company recognized accrued salary expense. The recognition will affect which of the following financial statements?How are revenues and expenses reported on the income statement under (a) the cash basis of accounting and (b) the accrual basis of accounting? Explain the purpose of the accounts Depreciation Expense and Accumulated Depreciation. Is it customary for the balances of the two accounts to be equal? (c) In what financial statements, if any, will each account appear? Why are adjustments needed at the end of an accounting period? Employees performed services in 20Y8, but the wages were not paid until 20Y9. During which year would the wages expense be reported on the income statement under (a) the cash basis? (b) the accrual basis?The revenue recognition principle states that: (a) revenue should be recognized in the accounting period in which a performance obligation is satisfied. (b) expenses should be matched with revenues. (c) the economic life of a business can be divided into artificial time periods. (d) the fiscal year should correspond with the calendar year.
- Assuming the entity paid its employees their wages, incurred during the period. The proper debit to this transaction is? a.) Utilities Expense b.) Miscellaneous Expense c.) Salaries Expense d.) Rent ExpenseWhen should liabilities for each of the following items be recorded in the accounts of the business entity?(a) Acquisition of goods by purchase on credit (b) Salaries(c) Annual bonus paid to management(d) DividendsHow do the Accountants measure the net income of a specified operating period?
- Accounts Payable (A/P) are: Amounts totaling the net worth of a company Amounts paid to owners Amounts that customers owe your business Amounts owed to others that are obligationsThe recognition principal of accrual accounting says revenue is recognized: Based on the firm’s cash accounts at the end of the fiscal year. When payments are received for the goods or services produced by the firm. When the activities required to earn the revenues are completed. When all resources that went into producing the goods or services are paid.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.…
- a. What is your company’s primary revenue, secondary revenue, and gains? b. What is your company’s primary expenses, secondary expenses, financial activity generated expenses, and losses? c. What is the revenue trend? Does the 10-K or 10-Q discuss primary revenues, as well as other revenue types? d. What do the accounting policies say in the annual report (footnotes) regarding the cost of revenue? What are the drivers to the cost of revenue and the trends?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 FalseThe board of directors of the Sebal Manufacturing Company had just received the company's financial statements. While reading them, one director asked, "What are the precise meanings of the terms 'cost,' 'expense,' and 'loss'? These terms sometimes seem to identify similar items and other times dissimilar items." Required: (1) An explanation of the meanings of the terms (a) "cost," (b) "expense," and (c) "loss" as used for financial reporting in conformity with generally accepted accounting principles. The explanation should indicate distinguishing characteristics of the terms, their similarities, and interrelationships.
