Cash | 90 | | | Service Revenue | | 90 | | Unearned Service Revenue | 60 | | | Service Revenue | | 60 | 8 | Cash | 300 | | | Accounts Receivable | | 300 | 9 | Cash | 750 | | | Unearned Service Revenue | | 750 | 15 | Accounts Payable | 50 | | | Cash | | 50 | 16 | Accounts Payable | 600 | | | Cash | | 600 | 19 | Cash | 60 | | | Unearned Service Revenue | | 60 | 23 | Cash | 3000 | | | Service Revenue | | 3000 | | Accounts
Premium Generally Accepted Accounting Principles Accounts receivable Revenue
company’s rent‚ telephone‚ and miscellaneous expenses are paid in cash. e. No cash has been collected on the $14‚000 consulting fees earned. Income ststement REAL ANSWERS Income Statement For Month Ended October 31 Revenues Consulting fees earned $14‚000 0 0 Total revenues $14‚000 Expenses Rent expense (3‚550) Salaries expense (7‚000) Telephone expense (760) Miscellaneous expenses (580) 0 0 Total expenses (11‚890) Net income $2‚110 Statement of retained earnings REAL ANSWERS
Premium Balance sheet Generally Accepted Accounting Principles Accounts receivable
Chapter 3 Adjusting Accounts and Preparing Financial Statements QUESTIONS 1. The cash basis of accounting reports revenues when cash is received while the accrual basis reports revenues when they are earned. The cash basis reports expenses when cash is paid while the accrual basis reports expenses when they are incurred (and matched with revenues they generated). 2. The accrual basis of accounting generally provides a better indication of company performance and financial condition than
Premium Generally Accepted Accounting Principles Balance sheet Depreciation
revenues.The revenue recognition principle states that we record revenue in the period in which we earn it. | | | 2. | | Discuss the major principle that describes recording expenses.The matching principle states that we recognize expenses in the same period as the revenues they help to generate. | | LO1 | 3. | | Samantha is a first-year accounting student. She doesn’t think it matters that expenses are reported in the same period’s income statement with the related revenues (matching
Premium Generally Accepted Accounting Principles Revenue Double-entry bookkeeping system
of the software products. As a company‚ it has shown a very stable growth in terms of revenues and profits‚ thus enabling better than industry share price increase over more than a decade (1986-1999). With respect to the primary operation of software development and the task to financial reporting the two areas that were required to be established were – a) Treatment of Software Development costs. b) Revenue recognition policy. As per the statement (SFAS no 86)issued by Financial Accounting Standards
Premium Income statement Revenue Generally Accepted Accounting Principles
Treatment for price protection and price protection _____________________________________________________________________________________________ The revenue recognition principle states that‚ under the accrual basis of accounting‚ you should only record revenue when an entity has substantially completed a revenue generation process; thus‚ you record revenue when it has been earned. Sales return is the return of merchandise by a customer. In accordance with generally accepted accounting principles‚ when
Premium Generally Accepted Accounting Principles Revenue
consideration during valuation Factor 2 Question 1 2 3 4 5 6 High Expected Growth (1985 to 1999) • Revenue: USD 140 Million to USD 20 Billion • Net income: USD 24 Million to USD 8 Billion • Beat analysts’ expectations for 52 out of 53 quarters Factor 3 Question 1 2 3 4 5 6 Conservative Accounting Policies • Software Development Costs – Q2 • Revenue Recognition – Q3 • Depressing the company’s book value of equity Q2. capitalization policy have on its financial
Premium Balance sheet Revenue Generally Accepted Accounting Principles
Group Case Study “Microsoft’s Financial Reporting Strategy” Microsoft’s Financial Reporting Strategy ABSTRACT 2 This case study examines the factors explaining the difference between Microsoft’s market value of equity to book value of equity and overall financial reporting strategies employed at the firm. We analyzed financial information dating from 1985 to 1999 and 2011 annual report provided by Microsoft. We found factors explaining market value of equity are perceived risk and future cash
Premium Generally Accepted Accounting Principles Income statement Revenue
1980s.The company was founded by Bill Gates and Paul Allen and went public on March 13th‚ 1986 with the price of $25.75 per share. Since going public‚ the company’s performance kept being outstanding. Microsoft not only had a high level growth of revenue and operating income‚ but also achieved this growth in really short period. The net income of Microsoft always grew more than 15% compared to the same quarter in prior years. Thus‚ the stock price of the company increased significantly‚ which was
Premium Generally Accepted Accounting Principles Revenue Microsoft
| Jun | 30 | Unearned Service Revenue | 4100 | | | | Service Revenue | | 4100 | | | (to record revenue earned) | | | Jun | 30 | Salaries Expense | 1250 | | | | Salaries Payable | | 1250 | | | (to record accrued salaries) | | | Jun | 30 | Depreciation Expense | 250 | | | | Depreciation Equipment | | 250 | | | (to record monthly depreciation) | | | Jun | 30 | Accounts Payable | 3900 | | | | Service Revenue | | 3900 |
Premium Generally Accepted Accounting Principles Revenue Balance sheet