Generally Accepted Accounting Principles and Total Stockholders Equity Essay Example

Week One Discussion Questions

• How would you describe the entries to record the disposition of accounts receivables? What is their function?

• How are bad debts accounted for under the direct write-off method? What are the disadvantages of this method?

• Pendergrass Company hires an accounting intern who says that intangible assets should always be amortized over their legal lives. Is the intern correct? Explain.

• What are the basic issues related to accounting for intangible assets?

• Why would you select the percentage of sales method for calculating doubtful accounts instead of the percentage of receivables method?

• Is it appropriate to use a hybrid of the percentage of sales and the percentage of receivables methods of calculating the allowance for doubtful accounts? Do the generally accepted accounting principles allow for using both methods at the same time? Why?

• What is the difference between revenue expenditures and capital expenditures during a useful life? Are there similarities? DQ:

• What are the differences between revenue expenditures and capital expenditures? Explain the entries of each.

Week Two Discussion Questions

• What are the differences among valuation, depreciation, amortization, and depletion? Is it appropriate to calculate depreciation using two different methods? Why?

• Which depreciation method provides you with the highest depreciation expense in the first year? Why?

• What types of industries have unearned revenue? Why is unearned revenue considered a liability? When is the unearned revenue recognized in the financial statements?

• Why do companies issue bonds? Would you rather buy a bond at a discount or a premium rate? Why? What is the determining factor of whether a bond is sold at a discount, face value, or premium?

• What is the straight-line method of amortizing discount and premium on bonds payable? Provide an explanation of the process.

• How would you