Homework Answers
Solution:
|
1 |
Revenue recognition principle |
|
2 |
Measurement principle |
|
3 |
Business entity assumption |
|
4 |
Time period assumption |
|
5 |
Monetary unit assumption |
|
6 |
Going concern assumption |
Explanation:
1) Revenue recognition principle states that the revenue can only be recognized after it has been earned.
2) Money measurement states that only transactions that can be expressed in money are recorded. Thus the amount recorded for trucks in the accounting records will be the amount the company paid and not it's actual worth.
3) Business entity assumption states that for legal purposes, a sole proprietorship and its owner are categorised to be one entity, however for purposes of accounting they are considered to be two separate entities
4) The time period assumption allows the business to be divided into equal time periods thus company can provide the information on earnings to investors at the end of every quarter
5) Monetary unit assumption states that only transactions that can be expressed in money are recorded which is stable and dependable
6) Going concern accounting principle is based on the assumption that a company will continue to exist long enough to carry out its goals and objectives and will not liquidate in the foreseeable future. Thus in spite falling sales for several year, the Company continues to forecast sales and continue it's strategic plans to raise revenues and reduce expenses
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The following account balances were taken from DJR Company’s accounting records at December 31, 2021: Accounts...
The following account balances were taken from DJR Company’s
accounting records at December 31, 2021:
Accounts Payable ............ $69,000
Accounts Receivable ......... $56,000
Advertising Expense ......... $33,000
Building .................... $94,000
Cash ........................ $31,000
Common Stock ................ $82,000
Cost of Goods Sold .......... $30,000
Dividends ................... $19,000
Equipment ................... $86,000
Income Tax Expense .......... $17,000
Interest Expense ............ $11,000
Inventory ................... $54,000
Notes Payable ............... $96,000
Rental Revenue .............. $62,000
Retained Earnings ........... $60,000 (at January 1, 2021)
Salaries Expense ...............
Cullumber Company, a manufacturer of small tools, provided the following information from its accounting records for...
Cullumber Company, a manufacturer of small tools, provided the
following information from its accounting records for the year
ended December 31, 2017.
Inventory at December 31,
2017 (based on physical count of goods in Cullumber’s plant, at
cost, on December 31, 2017)
$1,467,950
Accounts payable at December
31, 2017
1,182,000
Net sales (sales less sales
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Additional information is as follows.
1.
Included in the physical
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December 31,...
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The following account balances were taken from DJR Company’s
accounting records at December 31, 2021:
Accounts Payable ............ $69,000
Accounts Receivable ......... $56,000
Advertising Expense ......... $33,000
Building .................... $94,000
Cash ........................ $31,000
Common Stock ................ $82,000
Cost of Goods Sold .......... $30,000
Dividends ................... $19,000
Equipment ................... $86,000
Income Tax Expense .......... $17,000
Interest Expense ............ $11,000
Inventory ................... $54,000
Notes Payable ............... $96,000
Rental Revenue .............. $62,000
Retained Earnings ........... $60,000 (at January 1, 2021)
Salaries Expense ...............
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Problem 8-2
Blue Company, a manufacturer of small tools, provided the
following information from its accounting records for the year
ended December 31, 2017.
Inventory at December 31, 2017 (based on physical count of
goods in Blue’s plant, at cost, on December 31, 2017)
$1,494,150
Accounts payable at December 31, 2017
1,278,600
Net sales (sales less sales returns)
8,729,500
Additional information is as follows.
1.
Included in the physical count were tools billed to a customer
f.o.b. shipping point on...
1) Why study AIS? a) Simply doing accounting work i) A survey conducted by the Institute...
1) Why study AIS? a) Simply doing accounting work i) A survey conducted by the Institute of Management Accountants (IMA) indicates that work relating to accounting systems was the single most important activity performed by corporate accountants. b) Auditors must understand numbers before they audit and have confidence in the processes that produce the numbers c) Tax professionals must know that the processes produced numbers that are correct for tax planning and compliance. d) Consulting services are offered to implement...
The following account balances were taken from DJR Company’s
accounting records at December 31, 2021:
Accounts Payable ............ $69,000
Accounts Receivable ......... $56,000
Advertising Expense ......... $33,000
Building .................... $94,000
Cash ........................ $31,000
Common Stock ................ $82,000
Cost of Goods Sold .......... $30,000
Dividends ................... $19,000
Equipment ................... $86,000
Income Tax Expense .......... $17,000
Interest Expense ............ $11,000
Inventory ................... $54,000
Notes Payable ............... $96,000
Rental Revenue .............. $62,000
Retained Earnings ........... $60,000 (at January 1, 2021)
Salaries Expense ...............
Cullumber Company, a manufacturer of small tools, provided the
following information from its accounting records for the year
ended December 31, 2017.
Inventory at December 31,
2017 (based on physical count of goods in Cullumber’s plant, at
cost, on December 31, 2017)
$1,467,950
Accounts payable at December
31, 2017
1,182,000
Net sales (sales less sales
returns)
7,990,400
Additional information is as follows.
1.
Included in the physical
count were tools billed to a customer f.o.b. shipping point on
December 31,...
Concord Company, a manufacturer of small tools, provided the following information from its accounting records for the year ended December 31, 2020. Inventory at December 31, 2020 (based on physical count of goods in Concord's plant, at cost, on December 31, 2020) $1,377,820 Accounts payable at December 31, 2020 1,262,700 Net sales (sales less sales returns) 8,704.300 Additional information is as follows. 1. Included in the physical count were tools billed to a customer f.o.b. shipping point on December 31,...
The following account balances were taken from DJR Company’s
accounting records at December 31, 2021:
Accounts Payable ............ $69,000
Accounts Receivable ......... $56,000
Advertising Expense ......... $33,000
Building .................... $94,000
Cash ........................ $31,000
Common Stock ................ $82,000
Cost of Goods Sold .......... $30,000
Dividends ................... $19,000
Equipment ................... $86,000
Income Tax Expense .......... $17,000
Interest Expense ............ $11,000
Inventory ................... $54,000
Notes Payable ............... $96,000
Rental Revenue .............. $62,000
Retained Earnings ........... $60,000 (at January 1, 2021)
Salaries Expense ...............
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Problem 8-2
Blue Company, a manufacturer of small tools, provided the
following information from its accounting records for the year
ended December 31, 2017.
Inventory at December 31, 2017 (based on physical count of
goods in Blue’s plant, at cost, on December 31, 2017)
$1,494,150
Accounts payable at December 31, 2017
1,278,600
Net sales (sales less sales returns)
8,729,500
Additional information is as follows.
1.
Included in the physical count were tools billed to a customer
f.o.b. shipping point on...
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