Search Results for: Financial Accounting
Exercises: Unit 9
SHORT-ANSWER QUESTIONS, EXERCISES, AND PROBLEMS Questions ➢ Why should a company establish an internal control structure? ➢ Why are mechanical devices used in an internal control structure? ➢ Identify some features that could strengthen an internal control structure. ➢ Name several control documents used in merchandise transactions. ➢ What are the four objectives sought in Read more »
Exercises: Unit 7
SHORT-ANSWER QUESTIONS, EXERCISES, AND PROBLEMS Questions➢ Why is proper inventory valuation so important?➢ Why does an understated ending inventory understate net income for the period by the same amount?➢ Why does an error in ending inventory affect two accounting periods?➢ What is the meaning of taking a physical inventory?➢ What is the accountant’s responsibility regarding Read more »
Exercises: Unit 5
SHORT ANSWER QUESTIONS, EXERCISES AND PROBLEMS Questions ➢ Which account titles are likely to appear in a merchandising company’s ledger that do not appear in the ledger of a service enterprise? ➢ What entry is made to record a sale of merchandise on account under periodic inventory procedure? ➢ Describe trade discounts and chain discounts. Read more »
Exercises: Unit 4
SHORT ANSWER QUESTIONS, EXERCISES, AND PROBLEMS Questions ➢Which events during an accounting period trigger the recording of normal journal entries? ➢Which event triggers the making of adjusting entries? ➢Describe the difference between the cash basis and accrual basis of accounting. ➢Why are adjusting entries necessary? Why not treat every cash disbursement as an expense and Read more »
Exercises: Unit 2
SHORT ANSWER QUESTIONS, EXERCISES AND PROBLEMS Questions: ➢ Accounting has often been called the language of business. In what respects would you agree with this description? How might you argue that this description is deficient? ➢ Define asset, liability, and stockholders’ equity. ➢ How do liabilities and stockholders’ equity differ? How are they similar? ➢ Read more »
Exercises: Unit 1
SHORT ANSWER QUESTIONS, EXERCISES AND PROBLEMS A) Question Accounting has often been called the language of business. In what respects would you agree with this description? How might you argue that this description is deficient? B) Comprehensive Review Questions Why do we need financial information? What is accounting? What is Business? Who are the three Read more »
Classes and Types of Adjusting Entries
What is an Adjusting Entry? Adjusting entries reflect unrecorded economic activity that has taken place but has not yet been recorded because it is either more convenient to wait until the end of the period to record the activity, or because no source document concerning that activity has yet come to the accountant’s attention. Additionally, Read more »
Glossary: Lesson 2
Glossary Accounting equation Assets = Liabilities + Equity. Accounts payable Amounts owed to suppliers for goods or services purchased on credit. Accounts receivable Amounts due from customers for services already provided. Assets Things of value owned by the business. Examples include cash, machines, and buildings. To their owners, assets possess service potential or utility that Read more »
Glossary: Lesson 3
GLOSSARY Account A part of the accounting system used to classify and summarize the increases, decreases, and balances of each asset, liability, stockholders’ equity item, dividend, revenue, and expense. The three-column account is normally used. It contains columns for debit, credit, and balance. Accounting cycle A series of steps performed during the accounting period (some Read more »
Effects of Choosing Different Inventory Methods
Effects of Choosing Different Inventory Methods In the video, we saw how the cost of goods sold, inventory cost, and gross margin for each of the four basic costing methods using perpetual and periodic inventory procedures was different. The differences for the four methods occur because the company paid different prices for goods purchased. No Read more »