Answer to Question #165922 in Economics for hee

Question

QUESTION 1

In class you learned that in order to properly measure profitability and financial position, accruals and deferrals need to be accounted for.

(a) Summarize the difference between  between profitability and financial position.

(b) How do accountants know when they're measuring profitability and financial position "properly"?

(c) What does accounting for accruals and deferrals essentially involve? .

QUESTION 2

Identify and summarize the difference beween two types of accounting systems. Which accounting systems tends to work better? Why?

QUESTION 3

What will be the effect on the income statement and balance sheet if the following adjustments are not made :

(a) Deferred revenue has not been adjusted to record income earned.

(b) Expenses incurred but not yet paid have not been accounted for.

QUESTION 4

Study Problem 11-2A on page 575. Find Pharrell Co.'s (a) gross pay, (b) net pay, and (c) payroll tax expense. Explain how you calculated your answers.

QUESTION 5

(a) According to GAAP, why is the audit manager, Summa, in case problem 11-6 on page 586 correct? Include and analysis of Exhibit 8 on page 560 in your answer.

(b) Why did the loan officer in the Magna Appliance case ask if Magna used accrual accounting to prepare its financial statements? Why did the loan officer even care if Magna used accrual accounting in the first place?

Answer 1

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