EXERCISES: SETA E1A. CONCEPT Carlos Company\'s accountant makes the a activities

Question

EXERCISES: SETA E1A. CONCEPT Carlos Company's accountant makes the a activities listed below. Tell which of the following concept directly relates to each assumption or action: (a) periodici 0 1,2,3 Applications of Accounting Concepts Related to Accrual of accrual acc (b) continui ity INTRO Fall 20 accounting, (d) revenue recognition, (e) deferral, and () accracotin 1. Recognizes the usefulness of financial statements prepared on a though they are based on estimates. 2. Prepares an income statement that shows the revenues earned and the incurred during the accounting period. 3. In estimating the life of a building, assumes that 4 Postpones the recognition of a one-year insurance policy as an ex CHA the business will last i by recording the expenditure as an asset. 5. Records a sale when the customer is billed. 6. Recognizes, by making an adjusting entry, wages expense that has been incm not yet recorded

Explanation / Answer

1 since the statement is prepared on monthly basis -Periodicity 2 Revenue and expense is recognised in the period it is earned /incurred -Accrual accounting 3 Continuity -That business will run indefinitely 4 Deferral -recognition of expense paid in advance is deferred 5 Revenue recognition - revenue is recognised at the time of billing 6 Accrual -Expense is accrued but not yet paid

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.