Dum Dum

Question 1

Name the three Accounting Issues with Account Receivables

Answer 1

1. RECOGNIZE account receivables
2. VALUING account receivables
3. DISPOSING

Question 2

OTHER Income

OTHER Expenses

Answer 2

OTHER Income:

• Interest revenue
• Dividend revenue
• Rent revenue
• Gain from the sale of property plan and equipment

OTHER Expenses:

• Casualty losses from vandalism, accidents etc
• Loss from the sale of property plan and equipment
• Loss from strikes by employee, suppliers

Question 3

Recording in a Periodic Inventory System

1. Purchases of Inventory
2. Freight Cost incurred by buying merchandise
3. Purchase Return and Allowance
4. Purchase Discounts
5. Sales

Answer 3

1. Purchase of Inventory

• “Purchase” Account (Debit Balance)
• Not Inventory Acount

2. Freight Cost:

• “Freight-In” Account (Debit Balance)
• Not added to Invenotry

3. Purchase Return and Allowance:

• “Purchase Return and Allowance” Account
• Not substracted from Inventory !!!!
• Credit Balance

4. Purchase Discounts:

• also Only in a Periodic Inventory System
• Credit Balance

4. Sales:
   * NO COGS at the time of the sale

Question 4

Freight-In

Answer 4

• Freight Cost are NOT subject to a purchase Discount!!!!!
• Added to COGPurchased
• Only in a Periodic Inventory System

Debit Balance

Question 5

Name the 9 Steps in the Accounting Cycle

Answer 5

Question 6

Revenue Recognition Principle

Answer 6

• Recognize revenue in the accounting period in which the performance obligation is satisfied
• In a service enterprise, revenue is considered to be earned at the time the service is performed

Question 7

Adjusting Entries

Answer 7

• Required EVERY TIME a company prepares financial statements
• Ensures that the revenue/expense recognition principles are followed
• Necessary becasue Trial Balance my not contain up-to-date and complete data
• EVERY adjusting Entry will include:
  
  • one income statement account and
  • one statement of financial position account

Question 8

Share Capital Ordinary

Answer 8

• “Grundkapital” bzw “Gezeichnetes Kapital”
• Investment by shareholders

Question 9

Which basic three activites does accounting consist of

Answer 9

• Identify
• Records, and
• Communicate

the economic events of an organization to interested users

Question 10

Assets

Answer 10

• Resource a buisness owns
• Provide future service or benefits
• Cash, Inventory, Equipment etc.

Question 11

Equity

Answer 11

• Ownerships claim on total assets
• Referred to as residual equity