Answer:
a. 3
Explanation:
Bank Reconciliation: The Bank reconciliation works with the balance of the bank statement and the balance of the cash statement. The aim is to compare those two statements to allow the company to run smoothly.
There are different transactions because of which the balance of the bank statement and the balance of the cash statement do not match. We adjust the transactions accordingly to match those statements.
Based on the cash balance, there would be three adjusting entries which are given below:
a. Bank service charges
b. Notes collected
c. Interest earned
These adjusting entries are required so that the cash balance should balance with the valid cash balance.
Answer:
True
Explanation:
Under multinational projects, a multi national company sets up a business unit in another country, known as subsidiaries, to benefit from factors such as cheap labor, better market for products, availability of resources, etc.
The subsidiaries set up at different nations, report their profitability to the parent as well as repatriate a portion of their profits earned.
Feasibility or viability of a multinational project depends upon the repatriated profits that the parent eventually receives from the subsidiary.
Subsidiary cash flows do not define the viability since the parent company's and host nation's currencies differ. Thus, a US parent company which has a subsidiary in Vietnam, would be only bothered of the US Dollars repatriated by such a subsidiary.
Answer:
a. $522 repayment of a loan from an employee. Firm B loaned $500 to the employee six months ago, and the employee repaid the loan with interest.
-
Firm B should recognize $22 as interest income.
b. $600 deposit from a customer who rented mechanical equipment. Firm B must return the entire deposit when the customer returns the undamaged equipment.
-
The deposit cannot be recognized as income since it is a liability.
c. $10,000 short-term loan from a local bank. Firm B gave the bank a written note to repay the loan in one year at 9 percent interest.
-
Interests ($900) will be recognized when they are actually paid for in 1 year. No accrued interests must be reported on the balance sheet (December 31).
d. $888 prepaid rent from the customer described in part b. The rent is $12 per day for the 74-day period from December 17 through February 28.
- The $888 will be recognized as revenue during the current year.
Explanation:
When a taxpayer is a cash basis taxpayer, it will only report income and expenses that are actually collected or paid for respectively. All accounts receivable or accounts payable are not considered revenues nor expenses.
