Weida Surveying, Inc., provides land surveying services. During September, its transactions included the following. Sept. 1 Paid rent for the month of September, $4,400. Sept. 3 Billed Fine Line Homes $5,620 for surveying services. The entire amount is due on or before September 28. (Weida uses an account entitled Surveying Revenue when billing clients.) Sept. 9 Provided surveying services to Sunset Ridge Developments for $2,830. The entire amount was collected on this date. Sept. 14 Placed a newspaper advertisement in the Daily Item to be published in the September 20 issue. The cost of the advertisement was $165. Payment is due in 30 days. Sept. 25 Received a check for $5,620 from Fine Line Homes for the amount billed on September 3. Sept. 26 Provided surveying services to Thompson Excavating Company for $1,890. Weida collected $400 cash, with the balance due in 30 days. Sept. 29 Sent a check to the Daily Item in full payment of the liability incurred on September 14. Sept. 30 Declared and paid a $7,600 cash dividend to the company’s stockholders. Instructions: Three of September’s transactions involve cash payments, yet only one of these transactions is recorded as an expense. Describe three situations in which a cash payment would not involve recognition of an expense.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter1: Accounting As A Form Of Communication

Section: Chapter Questions

Problem 1.8E: Classification of Financial Statement Items Classify each of the following items according to (1)...

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Weida Surveying, Inc., provides land surveying services. During September, its transactions included the following.

Sept. 1 Paid rent for the month of September, $4,400.

Sept. 3 Billed Fine Line Homes $5,620 for surveying services. The entire amount is due on or before September 28. (Weida uses an account entitled Surveying Revenue when billing clients.)

Sept. 9 Provided surveying services to Sunset Ridge Developments for $2,830. The entire amount was collected on this date.

Sept. 14 Placed a newspaper advertisement in the Daily Item to be published in the September 20 issue. The cost of the advertisement was $165. Payment is due in 30 days.

Sept. 25 Received a check for $5,620 from Fine Line Homes for the amount billed on September 3.

Sept. 26 Provided surveying services to Thompson Excavating Company for $1,890. Weida collected $400 cash, with the balance due in 30 days.

Sept. 29 Sent a check to the Daily Item in full payment of the liability incurred on September 14.

Sept. 30 Declared and paid a $7,600 cash dividend to the company’s stockholders.

Instructions:

Three of September’s transactions involve cash payments, yet only one of these transactions is recorded as an expense. Describe three situations in which a cash payment would not involve recognition of an expense.

Transaction
Sept. 1
Income Statement
Revenue - Expenses = Net Income
NE
I
D
Balance Sheet
Assets = Liabilitles + Owners' Equity
NE
D
D

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