College Accounting (Book Only): A Career Approach
12th Edition
ISBN: 9781305084087
Author: Cathy J. Scott
Publisher: Cengage Learning
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Question
Chapter 11, Problem 5A
To determine
Explain the situation, if a business spent the cash it received in advance for services to perform at a later date.
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Why are payments received from customers in advance, for either services to be performed and/or for goods to be delivered, classified as liabilities upon the receipt of the funds?
Money received from customers for products to be delivered in the future is recorded as: C . revenue and a liability.
Select one of the following short-term (current) liabilties and describe some of the accounting requirements for recognizing/accounting for it:
Accounts Payable
Notes Payable
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Contingent Liabilites
Then describe how working capital, current ratio and quick ratio can be useful in making economic decisions. Who would be making these decisions?
Chapter 11 Solutions
College Accounting (Book Only): A Career Approach
Ch. 11 - Which of the following is the adjusting entry for...Ch. 11 - The adjusting entry for unearned revenue pertains...Ch. 11 - An account that has unearned in its name is...Ch. 11 - This type of inventory system does not require an...Ch. 11 - The Supplies account has a 1,400 balance. A...Ch. 11 - Prob. 6QYCh. 11 - Prob. 7QYCh. 11 - What is a physical inventory? What does the word...Ch. 11 - Prob. 2DQCh. 11 - Using the perpetual inventory system, what account...
Ch. 11 - Prob. 4DQCh. 11 - Prob. 5DQCh. 11 - Why is it necessary to adjust the Merchandise...Ch. 11 - A merchandising company shows 8,842 in the...Ch. 11 - Prob. 8DQCh. 11 - Prob. 1ECh. 11 - On October 31, the Vermillion Igloos Hockey Club...Ch. 11 - Basga Company uses the periodic inventory system....Ch. 11 - Prob. 4ECh. 11 - Journalize the required adjusting entries for the...Ch. 11 - On December 31, the end of the year, the...Ch. 11 - On December 31, Marchant Company took a physical...Ch. 11 - The trial balance of Hadden Company as of December...Ch. 11 - The balances of the ledger accounts of Beldren...Ch. 11 - Prob. 3PACh. 11 - Here are the accounts in the ledger of Mishas...Ch. 11 - A portion of Anderson Publishings work sheet for...Ch. 11 - The trial balance of Jillson Company as of...Ch. 11 - The balances of the ledger accounts of Pelango...Ch. 11 - Prob. 3PBCh. 11 - The accounts and their balances in the ledger of...Ch. 11 - A portion of Johnsons Farm Supply work sheet for...Ch. 11 - BURTS BEES, Durham, North Carolina Burts Bees...Ch. 11 - Prob. 2ACh. 11 - Prob. 3ACh. 11 - Prob. 4ACh. 11 - Prob. 5ACh. 11 - Prob. 1CP
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- The cash received in advance before delivering a product or performing a service is called unearned revenue.arrow_forwardWhat are some of the accounting applications that incorporate the time value of money into valuation?arrow_forwardWhat is the time value of money? Why should accountantshave an understanding of compound interest,annuities, and present value concepts?arrow_forward
- A contract between one or more parties creates: a. the date that cash is paid by the customer b. enforceable rights and obligations for the parties c. revenue for recognition d. the fixed amount of payments for the good or servicearrow_forwardCase I. The Property Corporation requires funds for its inventory, payment of salaries and wages, payment of utilities and other monthly operating costs. a). You are to suggest which financial market the company may approach and why? b). Discuss the financial instruments to raise in this requirement.arrow_forwardInvestors and creditors use the income statement to address what types of queries regarding future cash flows?arrow_forward
- If the owner of a company pays an amount of interest on a personal loan that he uses to begin his business, does he has to to record the interest payment?arrow_forwardPayment of taxes regularly by the business is its responsibility to which stakeholders? a. Government b. Creditors C. Customers d. Societyarrow_forwardExplain the concept of time value of money in accounting. How is it used to calculate the present value of future cash flows, and what are some applications of time value of money in accounting?arrow_forward
- Discuss the concept of time value of money and how it is used in accounting theory. What are the different methods used to calculate present value and future value, and how are they applied in financial decision-making?arrow_forwardWhat kinds of questions about future cash flows doinvestors and creditors attempt to answer with informationin the income statement?arrow_forwardInvestors analyze the financial statements to____________. Decide whether the company has the ability to repay interest and the principal Decide whether the company will buy new assets Determine whether the company would provide employment opportunities Determine the financial viability of the company and estimating its future performancearrow_forward
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