Dr. Fiddle's Records and Table.docx - Dr Fiddleu2019s...

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Dr. Fiddle’s Records and Table Directions Below are the records found in Dr. Fiddle’s file folder. For each record, indicate whether or not it should be included in the 2013 - 2014 financial statements. Note that some of the records have multiple components and will need be separated out into those that do need to be included and those that do not. Select at least one accounting principle that influenced your decision for each record and in your own words, explain how the principle influenced your choice. You do not need to use all accounting principles and some principles will be used more than once. Copyright © 2017 Southern New Hampshire University 1
Record Include in Financial Statements? (Yes/No/ Only some and specify which ones) Accounting principle(s) most applicable to this record with short written explanation Receipts A pile of receipts with dates from 2013–2014 for cash payments made to the Poland Springs water delivery man by the practice’s office manager, who advanced the money from her own pocket and was reimbursed in full in late 2014. Accounting entries to record the receipt of the water deliveries and the reimbursement of the office manager were never made. All the receipts mentioned are to be included in the 2013-2014 financial statement because they were expended during the same period of financial reporting. In this case, the matching principle suits ion this reporting because it is required that all the financial transactions are recorded when they happened even if payment (or reimbursement) is not yet made. Receipts for minor holiday gifts that Dr. Fiddle charged to her personal Visa card in 2012 and 2013 and gave to the doorman, janitor and others in her practice’s office building. Accounting entries to record the gifts as practice expenses and to reimburse Dr. Fiddle were made in the years the gifts were purchased Indeed, the gifts have to be included in the financial statements because they were paid for from the business. Matching principle in this scenario dictates that the transaction be made in the 2012 financial statement because they occurred and reimbursed for during the same year. This transaction should not be included in 2013-2014 financial report because they did not happen and actualize during the mentioned financial period. Receipts for state fees that Dr. Fiddle’s practice has paid and recorded to renew her license to practice medicine every year since graduation from medical school many years ago. The fees were consistently paid by the practice manager and recorded by the practice’s accountant. Yes, the receipts for the license have to reflect in the financial statement. As much as the financial period is not mentioned in this case, the explanation is that this has been the consistence transaction and definitely, 2013-2014 financial statement must include this transaction. In addition, full disclosure is Copyright © 2017 Southern New Hampshire University 2
required (footnote) so that in future, this entry is not mistakenly omitted.

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