UNIT 8 study guide - right to receive payment right of...

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UNIT 8 1) When provided with simple business transactions, record the movement of value between revenue, expense, asset, liability, and equity accounts, and prepare a simple Income statement and Balance sheet at the end of one period 2) - Accrual Accounting o The Financial Statements should properly communicate the rights and obligations of the business entity. o The concept of “rights and obligations” is already familiar: “Cash” includes Demand Deposits because you have the “Right” to convert it into currency at any time. o Rights=assets o Obligations=liabilities 4) Determine the rights and obligations involved in the sale of goods and services on credit, including the effect on Revenue, inventories and accounts receivable Rights:
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Unformatted text preview: - right to receive payment- right of title of the goods- right to the money Obligations: - obligation to pay- obligation to deliver goods- obligation to deliver payment 5) - FOB shipping point- ownership of goods are transferred when the goods are on the truck to go- FOB destination- ownership of goods are transferred when the goods are at their destination 6) Determine the effect on Cash and Accounts Receivable when cash is collected against accounts receivable, and understand that revenue is not affected by mere cash collection 7) -Collecting accounts receivable o It goes into cash-Writing off bad debts o Goes into net loss and subtracted from retained earnings-Selling goods and services on credit o ??...
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UNIT 8 study guide - right to receive payment right of...

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