Questions from Financial Accounting

Q: Write a short paragraph to explain in your own words the concept

Write a short paragraph to explain in your own words the concept of depreciation as used in accounting.

Q: Erie Garden Supplies uses a perpetual inventory system. Erie Garden Supplies

Erie Garden Supplies uses a perpetual inventory system. Erie Garden Supplies has these account balances at August 31, 2012, prior to making the year-end adjustments: A year ago, the replacement cost...

Q: Identify the accounting concept or principle that gives the most direction on

Identify the accounting concept or principle that gives the most direction on how to account for each of the following situations: a. Salary expense of $38,000 is accrued at the end of the period to m...

Q: Answer the following questions about prepaid expenses: a. On

Answer the following questions about prepaid expenses: a. On October 1, Up & Down Travel prepaid $3,000 for six months’ rent. Give the adjusting entry to record rent expense at October 31. Include the...

Q: Suppose that on January 1 Foreton Golf Company paid cash of $

Suppose that on January 1 Foreton Golf Company paid cash of $50,000 for computers that are expected to remain useful for five years. At the end of five years, the computers’ values are expected to be...

Q: During 2012, Transit Airlines paid salary expense of $42.

During 2012, Transit Airlines paid salary expense of $42.4 million. At December 31, 2012, Transit accrued salary expense of $2.2 million. Transit then paid $2.2 million to its employees on January 3,...

Q: Cheap Travel borrowed $60,000 on October 1 by signing

Cheap Travel borrowed $60,000 on October 1 by signing a note payable to Community Bank. The interest expense for each month is $250. The loan agreement requires Cheap to pay interest on December 31. 1...

Q: Return to the situation in Short Exercise 3-10. Here

Return to the situation in Short Exercise 3-10. Here you are accounting for the same transactions on the books of Community Bank, which lent the money to Cheap Travel. 1. Make Community Bank’s adjusti...

Q: Write a paragraph to explain why unearned revenues are liabilities instead of

Write a paragraph to explain why unearned revenues are liabilities instead of revenues. In your explanation, use the following actual example: The World Star, a national newspaper, collects cash from...

Q: Dove Golf Co. prepaid three years’ rent ($18,000

Dove Golf Co. prepaid three years’ rent ($18,000) on January 1, 2012. At December 31, 2012, Dove prepared a trial balance and then made the necessary adjusting entry at the end of the year. Dove adjus...