ACCT 201 Case Fall 2017 Page 8 Answer each of the following regarding the Genera

Question

ACCT 201 Case Fall 2017 Page 8 Answer each of the following regarding the Generally Accepted Principles followed by Big Data Company Question 8: A. During March, 2017, Big Data Company received $7,800 cash for performed for customers. It also performed $4,100 of services on Services received $3,600 cash for services to be performed in April. and 1. How much revenue did Big Data earn in March? 2, What Generally Accepted Accounting Principle is being followed by Big Data recognizing revenue for March? B. The financial statements reflect only the business activities of Big Data. This statement describes which Generally Accepted Accounting Principle? C. Big Data purchased the land on which its building is located in 2016 for $51,000. The market value of the land in June 2017 is $59,000. On December 31, 2017, the land has an appraised value of $76,000 1. By what amount should the Land account be increased in 20172 2. What Generally Accepted Accounting Principle is being followed by Big Data regarding the reporting of the Land? D. Big Data prepares financial statements on December 31 of each year. What Generaly Accepted Accounting Principle is being applied? Big Data reports only the expenses of the period that are associated with the revenues or activities of the period. This statement describes which Generally Accepted Accounting Principle?

Explanation / Answer

A). 1). Solution :- Amount of revenue earned in March 2017 = 7800 + 3600 = $ 11400.

A). 2). Answer :- Revenue recognition - Cash Basis of Accounting.

B). Answer :- Business entity assumption (Economic entity assumption).

C). 1). Answer :- Land account increased by $ 25000 (76000 - 51000).

C). 2). Answer :- Full disclosure convention.

D). Answer :- Accounting period. (Time period assumption)

E). Answer :- Matching (Matching cost and revenue).

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