(a)
Accrual basis of accounting:
In accrual Basis of accounting, the company records all the transaction that brings changes in the financial statement of the company. In accrual basis of accounting, the revenue is recognized for the accounting period, in which the goods are sold, or the service performed even if cash is not exchanged. Similarly the expenses are recognized for the accounting period, in which the business incurred expenses even if cash is not exchanged.
To describe: The difference between the accrual basis accounting and cash basis accounting.
(b)
To comment: The preference of cash basis of accounting over an accrual basis of accounting by the politician.
(c)
To Explain: The government that it should practice the accrual basis of accounting.
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FINANCIAL ACCOUNTING: TOOLS WP ACCESS
- Which statement is not correct? A. The primary function of the financial system is to facilitate well the flow of funds in the economy, from those who have surplus funds but can’t utilize them to those who have deficiency of funds but have productive use for the funds. B. The president and the congress sets fiscal policies that are geared towards counteracting excessive spending and borrowing during economic boom and encouraging spending during economic depression. C. Financial Institutions like banks, insurance companies and mutual funds, are entities that receive funds from savers and invest the funds in securities issued by borrowers. D. The Philippines Stock Exchange is the primary capital market of the Philippines where the debt and equity securities of publicly listed corporations are traded. E. none of the abovearrow_forwardDiscuss: How have government accounting evolved since independence in St. Lucia. How has this country managed its debt over the last one -two decade. Brief history of the country. Definition of government accounting Features of good government accounting and how these apply or does not apply in the country assigned selected. The legislation governing accounting in that country. Budgetary process How has the accounting system improved or deteriorated over the years Debt management strategies implemented or lack thereof over the years. Recommendations on how government accounting may be improved. Recommendations on how debt-management may be improved.arrow_forwardThe government has to go into debt to meet the needs of the budget deficit or shortfall. Identify whether this statement is true or false. Select one:TrueFalsearrow_forward
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- When WestCo ensures that it always has enough funds on hand to purchase the materials and human resources that it needs to produce goods and services, the company is exercising ______. Question 32 options: A) cash flow management B) government tax reporting C) account balancing D) financial planning E) financial controlarrow_forwardSee if you can determine the amount of Bluebird State Bank’s current net income after taxes from the figures below (stated in millions of dollars) and the amount of its retained earnings from current income that it will be able to reinvest in the bank. (Be sure to arrange all the figures given in correct sequence to derive the bank’s report of income). Effective tax rate 28% Interest on loans $90 Employee wages, salaries, and benefits 13 Interest earned on government bonds and notes 9 Provision for loan losses 5 Overhead expenses 3 Service charges paid by depositors 3 Security gains/losses -7 Interest paid on federal funds purchased 5 Payment of dividends of $4 per share on 1 million outstanding shares to be made to common stockholders Interest paid to customers holding time and savings deposits 40 Trust department fees 3arrow_forward6 Which of the following is a primary objective of financial reporting by state and local governments? Multiple Choice To provide information that can be used for capital allocation decisions made by external investors. To report on the legal requirements imposed on the government by its elected officials. To provide information that can be used to assess a government's accountability. To fulfill the government's statutory duty to report on cash received and cash disbursed.arrow_forward
- A government entity makes payment through Advice to Debit Account (ADA). The entry is most likely to be used in recording the payment is a. Accounts Payable Advances to Officers and Employees b. Accounts Payable Subsidy from National Government c. Accounts Payable Cash- ADA d. Nonearrow_forwardLacking sufficient cash for operations, a city borrows money from a bank, using as collateral the expected receipts from levied property taxes. Upon receipt of cash from the bank, the general fund would credita. Revenues. b. Other Financing Sources. c. Tax Anticipation Notes Payable. d. Taxes Receivable—Delinquent.arrow_forward1. The total amount remitted to the BIR through the Tax Remittance Advice? 2. How much is the unused Notice of Cash Allocation (NCA) for the quarter? 3. The entry to record the payment of payroll include a credit to? 4. The entry to recognize the payroll includes a?arrow_forward