Professional Documents
Culture Documents
1:
1.Cash 340000
Account receivable 60000
Revenue 400000
2. Rent expense 20000
Cash 20000
3. Salaries and wages expense 120000
Cash 120000
4. Utilities expense 52000
Cash 50000
Account payable 2000
Accrual net income= Revenue- expense = 400000-20000-120000-52000= 208000
BE 1.5:
1. Winderl Corporation did not disclose that it was the defendant in a material
lawsuit because the trial was still in progress.
Disagree. Because it is violated Materiality principles .
Matertiality ( nguyên tắc trọng yếu): Thông tin là trọng yếu nếu như thiếu
hay ghi sai nó thì sẽ ảnh hưởng nghiêm trọng đến các quyết địn của
những người sử dụng.
2. Alliant Semiconductor Corporation files quarterly and annual financial
statements with the London Stock Exchange
Agree. Because it is applied the periodicity assumption: business can
divide up their activities into artificial time period. Since outside
financial statement users want timely financial information, the tome
period assumption allows us to prepare financial statements on monthly,
quarterly and annually basis.
3. Reliant Pharmaceutical paid rent on its office building for the next two years
and charged the entire expenditure to rent expense.
Disagree. Because it is violated expense recognition ( accruals basis)
4. Rockville Engineering records revenue only after products have been
shipped, even though customers pay Rockville 50% of sales price in
advance.
Agree because it is applied revenue recognition ( accruals basis)
E 1-2:
1.
Year 2 :
Account receivable 350000
Revenue 350000
Cash 260000
Accounts receivable 260000
Rent expense 40000
Cash 40000
Cash 400000
Accounts receivable 400000