Ch1_Tut_Solutions[1] - 1101AFE Accounting Principles -...

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1101AFE Accounting Principles - Tutorial Exercises Chapter 1 (5 min.) S 1-2 Revenues are increases in owners’ equity earned by delivering goods or services to customers. Expenses are decreases in owners’ equity from using assets or increasing liabilities in the course of delivering goods or services to customers. Total revenue – Total expenses = Net profit (or Net loss) (5-10 min.) S 1-3 1. Record assets and liabilities at actual historical cost (cost principle). 2. Keep your business’s accounting records separate from your personal records so that you can evaluate the success or failure of the business. If your personal records get mixed up with your business’s accounting records, it may become difficult to tell how well the business is performing (entity concept). (10-15 min.) E 1-4 a. Increased assets (cash at bank) b. No effect on total assets. Increase in land offset the decrease in cash at bank. c. Decreased assets (cash at bank) d. Increased assets (machinery and equipment) e. Increased assets (accounts receivable) f. Decreased assets (cash at bank)
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This note was uploaded on 01/10/2010 for the course QIBT 1837 taught by Professor Cat during the Three '09 term at Queensland.

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Ch1_Tut_Solutions[1] - 1101AFE Accounting Principles -...

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