sells goods and products from others and it has zero R&D expense. 3. Warehouse Club for food and general merchandise has high Net Plant & Equipment 44.8% and zero Unearned Revenue. The Inventory is high 41.6% comparing with a supermarket grocery retailer. 4. Major passenger airline has some Accounts Payable 13.0%‚ high Unearned Revenue as a result of prepaid ticket purchases for future air travel 11.0%. 5. International hotel chain has high Goodwill: 25.1% 6. Temporary staffing agency has a relatively
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corresponded next year. Cost of goods sold is recognised at 50% of the sales. (a) Year-end liability and expenses for the year: Liabilities: $10‚000 Expenses: $30‚000 (b) Journal entries: Dr Cash $70‚000 Cr Unearned Revenue/Deposit $70‚000 Dr Unearned Revenue/Deposit $60‚000 Cr Sales Revenue $60‚000 Dr COGS $30‚000 Cr Inventory $30‚000 (3) CoinRich Ltd.’s has a warranty plan. The estimated warranty liability is 10% of cost of goods sold‚ and cost of goods sold for this year was $30‚000. By
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reverse bad debt from the customer Mr. Bankrupt while ignoring the news about how Mr. Bankrupt’s company is experiencing financial trouble. Mr. Ethics continues to tell me that Mr. Fraud has requested that $30‚000 of recorded unearned revenue be recorded as service revenue to increase company sales. Mr. Fraud states that if Mr. Ethics performs everything requested the company will be able to obtain a loan from the bank for new equipment. Anyone with good upbringing and training would know these
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A group of shareholders invested to set up a business called Binh Minh Co.‚ who trades Mobile phones. 1. 1/12 Invest to set up a business $8000 2. 1/12 borrow from B bank $5000 3. 1/12 paid in advance $1200 to rent a space in Dec and Jan. 4. 2/12 purchase equipment for $2100‚ useful life of 5 years‚ salvage value = 0. 5. 2/12 Purchase 100 mobiles for $50/unit‚ paid 60% in cash‚ the balance will be paid later 6. 3/12 Received $2000 cash in advance from customer
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temporary accounts once each year on December 31. The company recently issued the following income statement as part of its annual report. GERDES PSYCHOLOGICAL SERVICES‚ INC. Income Statement For the Year Ended December 31‚ 2007 Revenue: Counseling revenue……………………………. | | $225‚000 | Expenses: | | | Advertising expense…………………………... | $ 1‚800 | | Salaries expense………………………………. | 94‚000 | | Office supplies expense………………………. | 1‚200 | | Utilities expense………………………………. |
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5. What gives the board of directors the right to change a company’s CEO? 6. What three things do you need to recognize revenue according to the revenue recognition concept? 7. What is the purpose of adjusting entries? 8. What is the revenue concept and the matching concept? 9. When do you recognize revenues and expenses under cash and accrual accounting? 10. When can you use reversing entries? 11. Where do we close dividends
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Chapter 2 Review of the Accounting Process AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools‚ departments‚ and faculty may approach assessment and its documentation differently‚ one approach is to provide specific questions on exams that become the basis for assessment. To aid faculty in this endeavor‚ we have labeled each question‚ exercise and problem in Intermediate Accounting‚ 7e with the following
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Borrowing money from a bank. Selling stock. Paying off a loan. MC Qu. 117 Net Income: Net Income: Decreases equity. Represents the amount of assets owners put into a business. Equals assets minus liabilities. Is the excess of revenues over expenses. Represents owners’ claims against assets. MC Qu. 150 The statement of cash flows reports all of t... The statement of cash flows reports all of the following except: Cash flows from operating activities. Cash flows from
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AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools‚ departments‚ and faculty may approach assessment and its documentation differently‚ one approach is to provide specific questions on exams that become the basis for assessment. To aid faculty in this endeavor‚ we have labeled each question‚ exercise‚ and problem in Intermediate Accounting‚ 7e‚ with the following AACSB learning skills: Questions AACSB
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In the present day world‚ business is a necessary part in our lives. It is everywhere. Accounting is the most basic framework of business. The objective of most businesses is to earn a profit. Business owners use accounting to record and report various pieces of their companies’ financial information. Internal control is broadly defined as the procedures and processes used by a company to safeguard its assets‚ process information accurately‚ and ensure compliance with laws and regulations. What
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