Answer:
Reason : To ensure constant flow of cash
Explanation:
<u>Accrual Basis of accounting</u> records transactions when they meet definition and recognition criteria of Assets, Liabilities,Equity, Expense and Incomes.
This is different from<u> cash-basis accounting</u> which records transactions at the receipt or payment of cash.
Because of <em>timing</em> difference, the cash transactions (cash basis) can happen a late than the day of recognition of the elements (accrual basis).
Hence Revenue services demand that income tax be calculated on accrual basis to ensure a constant flow of cash whenever an entity transact.
It is the sister strategy to monetary policy through which a central bank influences a nation's money supply.
Answer:
$607,500
Explanation:
Given;
Total asset = $810,000
Total liabilities is one-fourth of its total assets
Therefore total liabilities = (1/4) × $810,000
= $202,500
Using the accounting formula
Total asset - total liabilities = stockholders’ equity
stockholders’ equity = $810,000 - $202,500
= $607,500
The stockholders’ equity of Lantz Co.’s amounts to $607,500.
Answer:
Yes, it is acceptable to use to use two separate accounts.
When recording the application of overhead the credit should be to: Manufacturing Overhead Control
Explanation:
For ease of accounting, a temporary account called manufacturing overhead control account is created. In this account, actual overhead costs are recorded on the debit side of the while overhead costs applied to Work in Process using predetermined rates are recorded on the credit side of the account.
The data reported on the manufacturing overhead control within a period includes all indirect costs incurred during the production process they include salaries, etc.
