Chapter 1, Problem 1.1TIATC

To determine

Recognitions of Expenses:

An expense is an operating amount spent to generate revenue for the business. A spending should be treated as an expense if it is revenue in nature or spent on operations activities of the business.

Financial statements:

Financial statements are prepared to summaries the account at the end of the period. The statements prepared are Income statement, Balance sheet, Statement of owner’s equity and Cash flows statements.

1. Reporting of Cost of free internet service provided to the customers in the store:

To indicate: Reporting of Cost of free internet service provided to the customers in the store

To determine

2. Effect of internet service bill received but not paid, on assets, liabilities, and equity:

To indicate: Effect of internet service bill received but not paid, on assets, liabilities, and equity

To determine

3. Effect of Payment of internet service bill on assets, liabilities, and equity:

To indicate: Effect of Payment of internet service bill on assets, liabilities, and equity

To determine

4. Effect of increase in internet service bill on Net income:

To indicate: Effect of increase in internet service bill on Net income