B the useful life of the medical equipment was

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Financial and Managerial Accounting Using Excel for Success
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Chapter 3 / Exercise EX 3–4
Financial and Managerial Accounting Using Excel for Success
Reeve/Warren
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(b) The useful life of the medical equipment was estimated to be 20 years with no residual value.(c) Many patients pay in advance for major medical procedures. Fees of $6,000 were earned during the month by performing procedures on patients who had paid in advance.(d) Salaries earned by employees during the month but not yet recorded amounted to $2,300.(e) On September 1 West Laboratory had moved and paid 2 month's rent in advance.(f) Medical procedures performed during the month but not yet billed or recorded amounted to $4,600.Prepare the adjusting entries required at September 30.AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2-6Williams - Chapter 04 #123
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Financial and Managerial Accounting Using Excel for Success
The document you are viewing contains questions related to this textbook.
Chapter 3 / Exercise EX 3–4
Financial and Managerial Accounting Using Excel for Success
Reeve/Warren
Expert Verified
124.Adjusting Entries Identify four types of timing differences between cash flows and the recognition of expenses or revenues that may require adjusting entries. (1.) To convert assets to expenses as they are consumed.(2.) To convert liabilities to revenue as they become earned.(3.) To accrue unpaid expenses.(4.) To accrue uncollected revenue.AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Williams - Chapter 04 #124125.Materiality (A.) Identify several factors considered by an accountant in deciding whether an item is "material."(B.) Does the concept of materiality complicate or simplify the process of making adjusting entries? Give an illustration to support your answer. (a.) Factors to be considered include the following:The dollar amount of the item (relative to annual net income, for example).The cumulative effect of all items under consideration.The nature of the item (politically sensitive, illegal, contrary to company policies, etc.).Accountants use their professional judgment in deciding which items are material, i.e., might reasonably influence the decisions of users of the financial statements.(b.) The concept of materiality should simplify the adjusting process because it allows accountants to use estimated amounts and even to ignore other accounting principles if the results do not have a "material effect" upon the financial statements. Several examples are listed below:Low-cost assets may be charged directly to expense.Some expenses such as utilities are charged to expense as the bills are paid, rather than when services are used, even though this practice technically violates the matching principle.Some adjusting entries may be ignored for immaterial dollar amounts.Adjusting entries may be based upon estimates if the amount of error is likely to be immaterial.AACSB: ReflectiveAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 8Williams - Chapter 04 #125
126.Adequate disclosure (A.) Briefly explain what is meant by the principle of adequate disclosure.(B.) How does professional judgment enter into the application of the principle of adequate disclosure?(C.) List 5 types of information that a publicly-held corporation generally would be required to provide according to the concept of adequate disclosure.

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