Questions from Financial Accounting

Q: Laurie Belk is president of Better Books. She has no accounting

Laurie Belk is president of Better Books. She has no accounting background. Belk cannot understand why fair value is not used as the basis for all accounting measurement and reporting. Discuss.

Q: Susan Zupan, a lawyer, accepts a legal engagement in March

Susan Zupan, a lawyer, accepts a legal engagement in March, performs the work in April, and is paid in May. If Zupan’s law firm prepares monthly financial statements, when should it recognize revenue...

Q: In completing the engagement in Question 3, Zupan pays no costs

In completing the engagement in Question 3, Zupan pays no costs in March, $2,000 in April, and $2,500 in May (incurred in April). How much expense should the firm deduct from revenues in the month whe...

Q: “Adjusting entries are required by the historical cost principle of accounting

“Adjusting entries are required by the historical cost principle of accounting.” Do you agree? Explain.

Q: Distinguish between the two categories of adjusting entries, and identify the

Distinguish between the two categories of adjusting entries, and identify the types of adjustments applicable to each category.

Q: What is the debit/credit effect of a prepaid expense adjusting

What is the debit/credit effect of a prepaid expense adjusting entry?

Q: “A worksheet is a permanent accounting record and its use is

“A worksheet is a permanent accounting record and its use is required in the accounting cycle.” Do you agree? Explain.

Q: (a) How does the time period assumption affect an accountant’s

(a) How does the time period assumption affect an accountant’s analysis of business transactions? (b) Explain the terms fiscal year, calendar year, and interim periods.

Q: Distinguish between a reversing entry and an adjusting entry. Are reversing

Distinguish between a reversing entry and an adjusting entry. Are reversing entries required?

Q: Indicate, in the sequence in which they are made, the

Indicate, in the sequence in which they are made, the three required steps in the accounting cycle that involve journalizing.