Horngren's Financial & Managerial Accounting, The Managerial Chapters, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780133851496
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 3, Problem 3.19E
1.
To determine
Accrual Accounting
Accrual accounting refers to the accounting system where revenues and expenses are recognized and recorded as and when it is earned or expenses irrespective of the exchange of cash. Accrual accounting presents a true and fair view of the state of affairs of the business than the cash basis of accounting. Accrual basis of accounting affirms the time period concept, revenue recognition concept, and matching principle of accounting as required by Generally Accepted Accounting Principles (GAAP).
Revenue Recognition Principle: The revenue recognition principle refers to the timing of the revenue recognition and the amount of the revenue to be recorded in the specified time.
Matching Principle: Matching principle refers to the recording of expenses incurred to match against, and earn the revenues during the particular accounting period.
To Indicate: The given revenue and expense to be categorized as cash basis accounting or accrual basis accounting in a tabular format.
2.
To determine
To Calculate: The net income or net loss for Company F under cash basis and accrual basis of accounting for the month of May.
3.
To determine
To Identify: The method that gives the best picture of the true earnings of Company F.
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The following information was available for Shekinahs business as at 31st December, 2018
Balances as at 01st December 2018
Sales Ledger K929,240
Purchases Ledger K509,300
Totals for the month up to 31st December 2018
Purchases 1,529,480
Sales 2,520,480
Purchases returns 43,080
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Discount Allowed 14,920
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Luna Company accepted credit cards in payment for $7,100 of services performed during July Year 1. The credit card company charged
Luna a 1.50 percent service fee; it paid Luna as soon as it received the invoices.
Required
a. Prepare the general journal entry to record the service revenue.
b. Prepare the general journal entry for the collection of the receivable from the credit card company.
c. Based on this information alone, what is the amount of net income earned during the month of July?
Complete this question by entering your answers in the tabs below.
Required A Required B
Required C
Prepare the general journal entry to record the service revenue. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field. Round your answers to nearest whole dollar.)
View transaction list
Journal entry worksheet
<
A
Record service revenue on credit card payment and credit card expenses.
Note: Enter debits before credits.
Transaction
1
General…
Directions: Record the following transactions in the appropriate journals.
Lloyd Gurango Co. completed the following sales transactions during the month of June 2021. A
credit sales have terms of 3/10, n/30, and all invoices are dates as at the transaction date.
June 1
4
7
9
13
ಈ
15
18
20
Mr. Gurango invested P52 000 of his funds in the business
Sold merchandise on account to KRA Company, P32 000. Invoice number 377
Sold P46 000 of merchandise for cash.
Received payment from KRA Company, fewer discounts.
Received payment from LRM Trading, fewer discounts.
Sold merchandise to JPT Store on account, P62 000. Invoice number 379.
Collected the amount due from JPT Store. Fewer discounts.
Paid the employees' wages for the month amounting to P5,000
Acquired merchandise to YMC Trading worth P15, 000 payable next month
Acquired merchandise on credit from ABS Manufacturing worth P15, 000. The invoice
number is 201 and the credit term is n/30
Chapter 3 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters, Student Value Edition (5th Edition)
Ch. 3 - Which of the following is true of accrual basis...Ch. 3 - Get Fit Now gains a client who prepays 540 for a...Ch. 3 - The revenue recognition principle requires a. time...Ch. 3 - Adjusting the accounts is the process of a....Ch. 3 - Which of the following is an example of a deferral...Ch. 3 - Assume that the weekly payroll of In the Woods...Ch. 3 - The adjusted trial balance shows a. amounts that...Ch. 3 - A D Window Cleaning performed 450 of services but...Ch. 3 - A worksheet a. is a journal used to record...Ch. 3 - On February 1, Clovis Wilson Law Firm contracted...
Ch. 3 - What is the difference between cash basis...Ch. 3 - Which method of accounting (cash or accrual basis)...Ch. 3 - Which accounting concept or principle requires...Ch. 3 - What is a fiscal year? Why might companies choose...Ch. 3 - Under the revenue recognition principle, when is...Ch. 3 - Prob. 6RQCh. 3 - When are adjusting entries completed, and what is...Ch. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQCh. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 14RQCh. 3 - Prob. 15RQCh. 3 - What is an accrued expense? Provide an example.Ch. 3 - What is an accrued revenue? Provide an example.Ch. 3 - Prob. 18RQCh. 3 - When is an adjusted trial balance prepared, and...Ch. 3 - If an accrued expense is not recorded at the end...Ch. 3 - What is a worksheet, and how is it used to help...Ch. 3 - If a payment of a deferred expense was recorded...Ch. 3 - If a payment of a deferred expense was recorded...Ch. 3 - Comparing cash and accrual basis accounting for...Ch. 3 - Comparing cash and accrual basis accounting for...Ch. 3 - Applying the revenue recognition principle South...Ch. 3 - Applying the matching principle Suppose on January...Ch. 3 - Identifying types of adjusting entries A select...Ch. 3 - Journalizing and posting adjusting entries for...Ch. 3 - Journalizing and posting an adjusting entry for...Ch. 3 - Journalizing and posting an adjusting entry for...Ch. 3 - Prob. 3.9SECh. 3 - Prob. 3.10SECh. 3 - Prob. 3.11SECh. 3 - Journalizing an adjusting entry for accrued...Ch. 3 - Prob. 3.13SECh. 3 - Determining the effects on financial statements In...Ch. 3 - Prob. 3.15SECh. 3 - Prob. 3.16SECh. 3 - Prob. 3.17SECh. 3 - Prob. 3.18ECh. 3 - Prob. 3.19ECh. 3 - Prob. 3.20ECh. 3 - Prob. 3.21ECh. 3 - Prob. 3.22ECh. 3 - Prob. 3.23ECh. 3 - Prob. 3.24ECh. 3 - Prob. 3.25ECh. 3 - Prob. 3.26ECh. 3 - Identifying the impact of adjusting entries on the...Ch. 3 - Journalizing adjusting entries and analyzing their...Ch. 3 - Prob. 3.29ECh. 3 - Prob. 3.30ECh. 3 - Understanding the alternative treatment of prepaid...Ch. 3 - Understanding the alternative treatment of...Ch. 3 - Journalizing adjusting entries and subsequent...Ch. 3 - Journalizing adjusting entries and identifying the...Ch. 3 - Journalizing and posting adjustments to the...Ch. 3 - Journalizing and posting adjustments to the...Ch. 3 - A Using the worksheet to record the adjusting...Ch. 3 - Understanding the alternative treatment of prepaid...Ch. 3 - Journalizing adjusting entries and subsequent...Ch. 3 - Journalizing adjusting entries and identifying the...Ch. 3 - Journalizing and posting adjustments to the...Ch. 3 - Journalizing and posting adjustments to the...Ch. 3 - Prob. 3.43BPCh. 3 - Understanding the alternative treatment of prepaid...Ch. 3 - Prob. 3.45CPCh. 3 - Prob. 3.46PSCh. 3 - One year ago, Tyler Stasney founded Swift...Ch. 3 - Prob. 3.1CTEICh. 3 - XM, Ltd. was a small engineering firm that built...Ch. 3 - Prob. 3.1CTFSCCh. 3 - In 75 words or fewer, explain adjusting journal...
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