Explain whether the steps in accounting cycle for a merchandising company differs from the steps in the accounting cycle for a service company.

Question

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Answer 1

Question

Chapter 5, Problem 1Q

(a)

To determine

Explain whether the steps in accounting cycle for a merchandising company differs from the steps in the accounting cycle for a service company.

(a)

Expert Solution

Answer to Problem 1Q

No, the steps in accounting cycle for a merchandising company does not differ from the steps in the accounting cycle for a service company.

Explanation of Solution

Accounting cycle refers to the process of recording, posting, and preparing financial statements of a company. It shows the processing of the financial transactions in sequence that starts from occurrence of the transactions and ends with the preparation of financial statements.

The steps in the accounting cycle that is same for both Merchandise Company, and Service Company are stated below:

Analyze and record transactions in the journal.
Post the journals entries to the ledger (T-accounts).
Prepare a trial balance.
Prepare financial statements.
Prepare closing entries.

(b)

To determine

Explain whether the measurement of net income in a merchandising company conceptually the same as in a service company.

(b)

Expert Solution

Answer to Problem 1Q

Yes, the measurement of net income in a merchandising company is conceptually same as in a service company.

Explanation of Solution

The net income in both the companies is derived by deducting all the expenses from the total revenue earned during a year.

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Answer 2

Question

Chapter 5, Problem 1Q

(a)

To determine

Explain whether the steps in accounting cycle for a merchandising company differs from the steps in the accounting cycle for a service company.

(a)

Expert Solution

Answer to Problem 1Q

No, the steps in accounting cycle for a merchandising company does not differ from the steps in the accounting cycle for a service company.

Explanation of Solution

Accounting cycle refers to the process of recording, posting, and preparing financial statements of a company. It shows the processing of the financial transactions in sequence that starts from occurrence of the transactions and ends with the preparation of financial statements.

The steps in the accounting cycle that is same for both Merchandise Company, and Service Company are stated below:

Analyze and record transactions in the journal.
Post the journals entries to the ledger (T-accounts).
Prepare a trial balance.
Prepare financial statements.
Prepare closing entries.

(b)

To determine

Explain whether the measurement of net income in a merchandising company conceptually the same as in a service company.

(b)

Expert Solution

Answer to Problem 1Q

Yes, the measurement of net income in a merchandising company is conceptually same as in a service company.

Explanation of Solution

The net income in both the companies is derived by deducting all the expenses from the total revenue earned during a year.

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Answer 3

Question

Chapter 5, Problem 1Q

(a)

To determine

Explain whether the steps in accounting cycle for a merchandising company differs from the steps in the accounting cycle for a service company.

(a)

Expert Solution

Answer to Problem 1Q

No, the steps in accounting cycle for a merchandising company does not differ from the steps in the accounting cycle for a service company.

Explanation of Solution

Accounting cycle refers to the process of recording, posting, and preparing financial statements of a company. It shows the processing of the financial transactions in sequence that starts from occurrence of the transactions and ends with the preparation of financial statements.

The steps in the accounting cycle that is same for both Merchandise Company, and Service Company are stated below:

Analyze and record transactions in the journal.
Post the journals entries to the ledger (T-accounts).
Prepare a trial balance.
Prepare financial statements.
Prepare closing entries.

(b)

To determine

Explain whether the measurement of net income in a merchandising company conceptually the same as in a service company.

(b)

Expert Solution

Answer to Problem 1Q

Yes, the measurement of net income in a merchandising company is conceptually same as in a service company.

Explanation of Solution

The net income in both the companies is derived by deducting all the expenses from the total revenue earned during a year.

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Answer 4

Question

Chapter 5, Problem 1Q

(a)

To determine

Explain whether the steps in accounting cycle for a merchandising company differs from the steps in the accounting cycle for a service company.

(a)

Expert Solution

Answer to Problem 1Q

No, the steps in accounting cycle for a merchandising company does not differ from the steps in the accounting cycle for a service company.

Explanation of Solution

Accounting cycle refers to the process of recording, posting, and preparing financial statements of a company. It shows the processing of the financial transactions in sequence that starts from occurrence of the transactions and ends with the preparation of financial statements.

The steps in the accounting cycle that is same for both Merchandise Company, and Service Company are stated below:

Analyze and record transactions in the journal.
Post the journals entries to the ledger (T-accounts).
Prepare a trial balance.
Prepare financial statements.
Prepare closing entries.

(b)

To determine

Explain whether the measurement of net income in a merchandising company conceptually the same as in a service company.

(b)

Expert Solution

Answer to Problem 1Q

Yes, the measurement of net income in a merchandising company is conceptually same as in a service company.

Explanation of Solution

The net income in both the companies is derived by deducting all the expenses from the total revenue earned during a year.

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Answer 5

Chapter 5, Problem 1Q

(a)

To determine

Explain whether the steps in accounting cycle for a merchandising company differs from the steps in the accounting cycle for a service company.

(a)

Expert Solution

Answer to Problem 1Q

No, the steps in accounting cycle for a merchandising company does not differ from the steps in the accounting cycle for a service company.

Explanation of Solution

Accounting cycle refers to the process of recording, posting, and preparing financial statements of a company. It shows the processing of the financial transactions in sequence that starts from occurrence of the transactions and ends with the preparation of financial statements.

The steps in the accounting cycle that is same for both Merchandise Company, and Service Company are stated below:

Analyze and record transactions in the journal.
Post the journals entries to the ledger (T-accounts).
Prepare a trial balance.
Prepare financial statements.
Prepare closing entries.

(b)

To determine

Explain whether the measurement of net income in a merchandising company conceptually the same as in a service company.

(b)

Expert Solution

Answer to Problem 1Q

Yes, the measurement of net income in a merchandising company is conceptually same as in a service company.

Explanation of Solution

The net income in both the companies is derived by deducting all the expenses from the total revenue earned during a year.

Answer 6

Chapter 5, Problem 1Q

(a)

To determine

Explain whether the steps in accounting cycle for a merchandising company differs from the steps in the accounting cycle for a service company.

(a)

Expert Solution

Answer to Problem 1Q

No, the steps in accounting cycle for a merchandising company does not differ from the steps in the accounting cycle for a service company.

Explanation of Solution

Accounting cycle refers to the process of recording, posting, and preparing financial statements of a company. It shows the processing of the financial transactions in sequence that starts from occurrence of the transactions and ends with the preparation of financial statements.

The steps in the accounting cycle that is same for both Merchandise Company, and Service Company are stated below:

Analyze and record transactions in the journal.
Post the journals entries to the ledger (T-accounts).
Prepare a trial balance.
Prepare financial statements.
Prepare closing entries.

Answer 7

Chapter 5, Problem 1Q

(a)

To determine

Explain whether the steps in accounting cycle for a merchandising company differs from the steps in the accounting cycle for a service company.

Answer 8

(a)

Expert Solution

Answer to Problem 1Q

No, the steps in accounting cycle for a merchandising company does not differ from the steps in the accounting cycle for a service company.

Answer 9

(a)

Expert Solution

Answer 10

(a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Accounting cycle refers to the process of recording, posting, and preparing financial statements of a company. It shows the processing of the financial transactions in sequence that starts from occurrence of the transactions and ends with the preparation of financial statements.

The steps in the accounting cycle that is same for both Merchandise Company, and Service Company are stated below:

Analyze and record transactions in the journal.
Post the journals entries to the ledger (T-accounts).
Prepare a trial balance.
Prepare financial statements.
Prepare closing entries.

Answer 13

(b)

To determine

Explain whether the measurement of net income in a merchandising company conceptually the same as in a service company.

(b)

Expert Solution

Answer to Problem 1Q

Yes, the measurement of net income in a merchandising company is conceptually same as in a service company.

Explanation of Solution

The net income in both the companies is derived by deducting all the expenses from the total revenue earned during a year.

Answer 14

(b)

To determine

Explain whether the measurement of net income in a merchandising company conceptually the same as in a service company.

Answer 15

(b)

Expert Solution

Answer to Problem 1Q

Yes, the measurement of net income in a merchandising company is conceptually same as in a service company.

Answer 16

(b)

Expert Solution

Answer 17

(b)

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

The net income in both the companies is derived by deducting all the expenses from the total revenue earned during a year.

Answer 20

Ch. 5 - Prob. 1Q Ch. 5 - Prob. 2Q Ch. 5 - Prob. 3Q Ch. 5 - Prob. 4Q Ch. 5 - Prob. 5Q Ch. 5 - Prob. 6Q Ch. 5 - Prob. 7Q Ch. 5 - Prob. 8Q Ch. 5 - Prob. 9Q Ch. 5 - Prob. 10Q

Explain whether the steps in accounting cycle for a merchandising company differs from the steps in the accounting cycle for a service company.

Explain whether the steps in accounting cycle for a merchandising company differs from the steps in the accounting cycle for a service company.

Answer to Problem 1Q

Explanation of Solution

Explain whether the measurement of net income in a merchandising company conceptually the same as in a service company.

Answer to Problem 1Q

Explanation of Solution

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Chapter 5 Solutions