Concept explainers
Concept Introduction:
Journal entries-
The business runs with the transactions it makes. Every transaction results in some outcome like the creation of asset, liability, income, loss, gain or expense. The debits and the credits are made on the basis of the rules of the accounting.
To prepare:
To prepare the journam entry.
Concept Introduction:
Cost of goods sold -
Cost of goods sold can be defined as the total cost assigned to the goods that are sold during a period of time. It is calculated by summing up all the costs incurred starting from purchases till the process of manufacturing.
Adjusting entries are prepared to complete the financial statement of the company and to reflect the accrual method of accounting. Adjusting entries are prepared before issuance of financial statement.
Under or Over applied
Under or Over applied overhead- It is the difference between the actual and applied overhead.
If the actual overhead incurred is more than the overhead applied during a particular period, then it is a case of under-applied of overhead cost.
If the actual overhead incurred is less than the overhead applied during a particular period, then it is a case of over-applied of overhead cost.
To determine revised balance and to prepare the adjusting entry.
Concept Introduction:
Trial balance is an accounting statement which contains all debit and credit balances of the ledger accounts in which transactions have been posted during a period. It is prepared to check the arithmetical accuracy of transactions.
To prepare:
To prepare trial balance.
Concept Introduction:
Income statement-
Income statement refers to the financial statement that evaluates the financial performance of the company. It shows the expenses, revenues and net income of a firm over specific period of time. Therefore evaluation of financial performance can be undertaken by identifying the revenues and expenses incurred by the business through both non-operating and operating activities.
Balance sheet is a statement which shows the financial position of the company at a particular date. The balance sheet explains about the company's assets and also explains how these assets are being financed. Assets are usually financed either through debt or equity. So, balance sheet gives the clear picture of company's assets, liabilities and equity.
To prepare:
To prepare income statement and balance sheet.
Concept Introduction:
Income statement-
Income statement refers to the financial statement that evaluates the financial performance of the company. It shows the expenses, revenues and net income of a firm over specific period of time. Therefore evaluation of financial performance can be undertaken by identifying the revenues and expenses incurred by the business through both non-operating and operating activities.
Balance sheet-
Balance sheet is a statement which shows the financial position of the company at a particular date. The balance sheet explains about the company's assets and also explains how these assets are being financed. Assets are usually financed either through debt or equity. So, balance sheet gives the clear picture of company's assets, liabilities and equity.
To Analyse:
To analyse the impact of errors.

Want to see the full answer?
Check out a sample textbook solution
Chapter 19 Solutions
FUND OF ACCOUNTING PRIN W/ACC <CUSTOM>
- The following data were selected from the records of Fluwars Company for the year ended December 31, current year: Balances at January 1, current year: Accounts receivable (various customers) $ 111,500Allowance for doubtful accounts 11,200 The company sold merchandise for cash and on open account with credit terms 1/10, n/30, without a right of return. The following transactions occurred during the current year: Sold merchandise for cash, $252,000.Sold merchandise to Abbey Corp; invoice amount, $36,000.Sold merchandise to Brown Company; invoice amount, $47,600.Abbey paid the invoice in (b) within the discount period.Sold merchandise to Cavendish Inc.; invoice amount, $50,000.Collected $113,100 cash from customers for credit sales made during the year, all within the discount periods.Brown paid its account in full within the discount period.Sold merchandise to Decca Corporation; invoice amount, $42,400.Cavendish paid its account in full after the discount…arrow_forwardGiven solution general accountingarrow_forwardanswer plzarrow_forward
- The following data were selected from the records of Fluwars Company for the year ended December 31, current year: Balances at January 1, current year: Accounts receivable (various customers) $ 111,500 Allowance for doubtful accounts 11,200 The company sold merchandise for cash and on open account with credit terms 1/10, n/30, without a right of return. The following transactions occurred during the current year: Sold merchandise for cash, $252,000. Sold merchandise to Abbey Corp; invoice amount, $36,000. Sold merchandise to Brown Company; invoice amount, $47,600. Abbey paid the invoice in (b) within the discount period. Sold merchandise to Cavendish Inc.; invoice amount, $50,000. Collected $113,100 cash from customers for credit sales made during the year, all within the discount periods. Brown paid its account in full within the discount period. Sold merchandise to Decca Corporation; invoice amount, $42,400. Cavendish paid its account in full after the…arrow_forwardNonearrow_forwardnonearrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





