Do the following events represent business transactions? Explain your answer in each case.
(a) A computer is purchased on account.
Yes. An asset is gained (the computer) and Accounts Payable is credit
For the Month Ended September 30, 2014
Unearned Service Revenue
How are financial accountants challenged in their work to make ethical decisions? Is technical
mastery of GAAP not sufficient to the practice of financial accounting?
It can be a challenge for financ
Three expense recognition methods (associating cause and effect, systematic and rational
allocation, and immediate recognition) were discussed in the text under the expense recognition
The objective of general purpose financial reporting is to provide financial information
about the reporting entity that is useful to present and potential equity investors, lenders,
and other creditors in decisions about providing resources to the entity