Not on December 31st
Accrual Basis Accounting
Follows GAAP. Record revenues when earned and expenses when incurred.
Regardless if cash has changed hands.
Cash Basis Accounting
Does not follow GAAP, only record reven
Don't close - Assets, liabilities, capital
Close - Revenues, expenses, drawings
Use or turn to cash within one year (AR, prepaid, supplies)
Long Term Assets
Remain on books for more than a year (Land, e
Language of business
External Info based on past results
Internal info based on future data
Key product in accounting, reports monetary terms
Financial Accounting Standards Board (
Chapter 13 discussion Questions
1. The purpose is to keep track of how much cash the company has, and to see
where the money is going and coming from.
2. The income statement better shows how profitable a company is since a
SOCF only looks at cash.
Brief Exercise 10.1
The amount of cash payments Jacobs was required to make each year is 2 (2 a year
because they pay quarterly).
2. An activity base is what unit you base your costs off of.
4. It is easier to read and make a graph when you can predict a straight line with no
A. The portion which changes of the cost that changes as the activity base
B. The portion i
A. 1,440 shares worth: 17,280
B. The company can continue to use the cash
C. At the rate of the growth of MR, stock dividends were better for investors.
A. Extraordinary Item
C. Stock dividend
D. Additional Paid-in Capital
E. Prior p
AC 204 Test Chapter 10 Review
Discount on Bonds Payable is a contra-liability account.
Know the balance sheet presentation of bonds (page 444):
Bonds payable listed at maturity value
Less discount on bonds payable
Net carrying value or net bond liability
Accounting Discussion Questions
1. Because most offer shares to the general public.
a. Sole proprietorship has all of the liability on the owner, where as a
corporation has limited liability for the owners.
b. Corporations transfer ownership much easie
1. The subtotal of continuing operations show the profitability of current
business activity, and the extraordinary subtotal is to show the amount that
in generally never going to be added/subtracted.
2. Yes. All three should be put in discontinued operat
July 1 2011
Discount on bonds payable
Issued 20 year bonds at 5mil face value at 98
Dec 31 2011
Bond interest expense
Discount on bonds payable
To record semi annual interest e
Chapter 10 Discussion Questions
1. Definition: Debts or obligations arising from past transactions or events the
require settlement at a future date. Unlike Owners Equity liabilities mature,
and the creditors of the liability do not have owne
1. the methods and techniques used by enterprises to track resources
consumed in creating and delivering products and services to customers.
2. To determine unit manufacturing costs, and to provide managers with ueful
information for planning and cost con
Trade Acc Payble
Income Tax Payable
Accrued Interest on NP
Accrued Exp & Payroll Taxes
Current Portion of LT Note
NP to NorthWest
Managerial accounting is looking more into what a company can do better to
increase profits, and use the information from the past, present, and future to
knowledgably set prices ect.
Helps to decide who has decision making authority over company as
E 16.6,16.9, 16.13
Product = 1, Period = 2
A: 1, D
C: 1, I
D: Over Head
E: Over Head
F: Over Head
H: Indirect Materials
Work in Process Beginning Balance:
Manufacturing costs assigned to Production:
P15.2, 15.6 A
Loss on FER
Gain on FER
Playing both sides of the fence by having a recei
285,000 (315,000 Total including AR)
B. The amount of cash received and the total amount of salves made with
credit is different.
None of the
Dr. Finished Goods
Dr. Accounts Receiva
Break even Point
Unit contribution Margin
Economies of Scale
A. Option 1 would decrease operating income
Dec 31 2011
Discount on Bonds
Adjusting entry for 4 months of interest expense and Discount on bonds
March 21 2012
Discounts on Bonds
The final exam will consist of approximately 50 of these questions
Which of the following organizations has the primary responsibility for formulating accounting
Which of the following concepts (principl