Midterm Exam Review 1.The revenue recognition principle provides that revenue is recognized when? Pages 907-8 Dot Point, Inc. is a retailer of washers and dryers and offers a three-year service contract on each appliance sold. Although Dot Point sells the appliances on an installment basis, all service contracts are cash sales at the time of purchase by the buyer. Collections received for service contracts should be recorded when? An alternative available when the seller is exposed to continued
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Baron Coburg’s Sole Proprietorship Tabulated Information for Plot worked by Ivan For the Growing Season Bushels of Wheat Pre-season Land 100 bw. 20 bw. 2 bw. SUBTOTAL TOTAL Post-Season 0 bw. 162 bw. 243 bw. 100 bw. 20 bw. 2 bw. 40 bw. 40 bw. 0 bw. 0 bw. 162 bw. Seed Fertilizer Ox Plow = Accounts Payable Owners’ Equity 100 bw. 20 bw. 2 bw. 40 bw. 162 bw. 243 bw. -2 bw. -20 bw. -4 bw. Description of Transaction Land from Baron Seeds from Baron Fertilizer from Baron Ox from Baron -2
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Chapter 2 A company would withhold certain financial information from external parties if the information. I believe that it is unethical for company managers to limit the information available to their internal decision makers. It is unethical 2-54 1. Consistency-The same measurement application methods are used over time. 2. Neutrality - The accounting information is free of bias. 3. Feedback Value-The information provides input to evaluate a previously made decision.
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The asset cost RM1000 on 1.1.x1 and the depreciation rate is 50 % of the book value or reduced balance. Full year depreciation is adopted. Difference btw straight line method(on cost basis) and Reducing Balance Method (on net book VALUE) Using Straight Line Method, the % of depeciation is based on the COST Yr x 1 the depreciation is = 50 x RM1000 = RM500 Effect is the NET BOOK VALUE = COST OF ASSET – DEPRECIATION of ASSET Yr 1 = THE BOOK VALUE = 1000 – 500 = RM500 Yr x 2 the depreciation
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the company. This will provide tools to assist in making business decisions and evaluating the effectiveness of the decisions being made (Kimmel, Weygandt, & Kieso, 2003). Among the reports in a financial department are the income statement, balance sheet, cost-volume-profit income statement, statement of cash flows, and a retained earnings statement. These types of financial reports are among the essential tools that are necessary in managerial accounting for business decision making. The income
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assets and liabilities shown on the balance sheet. Confirmation of receivables and observation of physical inventory became mandatory audit procedures. 2. Briefly describe an American audit at the turn of the 19th to the 20th century. Bookkeeping was only briefly reviewed while the balance sheet and verification of current assets/liabilities was the main focus. The audits at the turn of the 19th – 20th century were basically a certification of balance sheets to be used by bankers to determine
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view about the firm’s financial statement. A typical aim of creative accounting will be to inflate profit figures. Some companies may also reduce reported profits in good years to smooth results. Typical creative accounting tricks include off balance sheet financing, over-optimistic revenue recognition, and the use of exaggerated non-recurring items. Window-Dressing Window dressing means presenting company accounts in a manner which enhances the financial position of the company. It is the worst
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To: Incoming MBA Students, 2015 Full-Time Program (0101 and 0201) From: Professor Rebecca Hann Faculty Coordinator for BUSI 610: Introduction to Financial Accounting Re: Pre-term Course from Harvard Business School Publishing Date: June 3, 2015 BUSI 610, Introduction to Financial Accounting, is one of the Core courses that you will take in Fall 2015. This course is designed to help you become an informed user of financial statements. Given the duration of the term, we will be moving
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Music Mart, Inc. On a sheet of paper, set up in pencil the balance sheet of Music Mart, lnc., as it appears after the last transaction described in the text (January 4), leaving considerable space between each item. Record the effect, if any, of the following events on the balance sheet, either by revising existing figures (cross out, rather than erase) or by adding new items as necessary. At least one of these events does not affect the balance sheet. The basic equation, Assets=Liabilities + Owners’
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Introduction A lease is a contractual arrangement that involves the coming together of two patties for the hire of an asset. The party that owns the asset is called the lessor. The other party in this agreement is the Lessee. The Lessee is the party which hires the asset which is leased. The asset is hired for a specified period of time. During this period, the Lessee makes rental payment to the lessor. After the lease period is over, the asset can be returned to the lessor. However, the asset can
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