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3 years ago

Inferring Transactions from Financial Statements

Business

1 answer:

skad [1K]3 years ago

7 0

Answer:

Please see attachment

Explanation:

Please see attachment

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A liability created when a business collects cash from customers in advance of providing services or delivering goods is called?

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<span> <span>The liability created by receiving cash before providing the service or delivering the goods in question is called unearned revenue. In this case, the entity providing the goods/services records this transaction as revenue that has been generated but in real sense, the seller remains with the liability until after the actual delivery of the goods/services. The purpose of this practice can be advantageous to the seller in certain situations such as easing the burden of paying interest on debts.</span></span>

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3 years ago

A customer tells you that they “must have” a particular item that you are out of in your store. You can tell that the customer i

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I would tell them were other store you can by it that can have there produce available

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3 years ago

Madison Inc. reported sales of $1,000,000, a debit balance in Accounts Receivable of $80,000, and a credit balance of $5,000 in

aniked [119]

Answer:

Accounts Receivable $80,000,

Bad debt losses of 1% of credit sales= 1% * $ 80,000= $ 800

Allowance for Doubtful Accounts $5,000 credit

Bad Debts $ 800 Debit

Allowance for Doubtful Accounts $4,200 credit

Two entries will be required

For recording Bad debts Expense

Bad Debts Expense $ 800 Dr

Allowance for Doubtful Accounts $ 800 credit

Adjusting Entry at year end.

Allowance for Doubtful Accounts $ 800 Debit

Account Receivables $ 800 Credit

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3 years ago

Read 2 more answers

Air France collected cash on February 4 from the sale of a ticket to a customer on January 26. The flight took place on April 5.

expeople1 [14]

Answer:

Air France should have recognized the Revenue in month of APRIL.

Explanation:

According to the revenue recognition concept the revenue should be recognized when it is realizable. When goods or services are tranferred or rendered to the customer. It doesn't matter matter when the payment is received. Payment received in advance should be recorded as unearned revenue rather as revenue. On the other hand payment doesn't received until the transfer of goods or services, a receivable will be made in result of revenue recognition entry. Air France should recognize the revenue on April 5, when the flight took placed and services are performed. Sale of ticked on January 26 will be recorded as unearned revenue and a receivable on the other hand. The receivable will be adjusted on February 4 when cash is received and the revenue will be recognized on April 5 when flight took place.

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3 years ago

Jack is a self-employed contractor. He uses his Ford F250 in his business. He does not have another vehicle for personal use. He

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C business mileage during the year to claim the standard mileage rate for the business

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3 years ago