Chapter 2 Solutions

Chapter 2 Solutions - Chapter 2 E2-5 Answers A Historical...

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Unformatted text preview: Chapter 2 E2-5 Answers A. Historical Cost Principle B. Conservatism C. Full Disclosure Principle D. Expense Recognition Principle E. Materiality F. Industry Practice G. Economic Entity Assumption H. Full Disclosure Principle I. Revenue Recognition J. Full Disclosure Principle K. Revenue & Expense Recognition L. Economic Entity M. Periodicity N. Expense Recognition O. Materiality P. Historical Cost Principle Q. Conservatism R. Expense Recognition E2-6 Answers A. It should be noted that revenue, cost of goods sold and expenses should be shown in the income statement. B. Company should show that equipment was bought over notes payable and also should disclose the complete value of equipment not just 60,000. Thus equipment should be showed as asset and notes payable as liability. C. Closing balance of inventories should be reported in the assets in the balance sheet but other details like the method of calculating inventories should be clearly stated in the notes of financial statement....
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This note was uploaded on 05/17/2010 for the course ACCT 505 taught by Professor Tony during the Spring '10 term at DeVry Addison.

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Chapter 2 Solutions - Chapter 2 E2-5 Answers A Historical...

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