Explanation Justification for the correct option b: When the cash is paid for credit purchases, both the amount of cash and accounts payable decreases for the company and for the vendor, accounts rec...

3rd Edition

ISBN: 9780133791129

Author: Jane L. Reimers

Publisher: Pearson Higher Ed

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Chapter 3, Problem 6MCQ

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Identify the option that is considered as an example of an accrual.

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Financing Deficit Stevens Textile Corporation's 2019 financial statements are shown below: Just need the correct LOC? Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $ 1,080 Accounts payable $ 4,320 Receivables 6,480 Accruals 2,880 Inventories 9,000 Line of credit 0 Total current assets $16,560 Notes payable 2,100 Net fixed assets 12,600 Total current liabilities $ 9,300 Mortgage bonds 3,500 Common stock 3,500 Retained earnings 12,860 Total assets $29,160 Total liabilities and equity $29,160 Income Statement for December 31, 2019 (Thousands of Dollars) Sales $36,000 Operating costs 34,000 Earnings before interest and taxes $ 2,000 Interest 160 Pre-tax earnings $ 1,840 Taxes (25%) 460 Net income $ 1,380 Dividends (40%) $ 552 Addition to retained earnings $ 828 Stevens grew rapidly in 2019 and financed the growth with notes payable and long-term bonds. Stevens expects sales to…

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Chapter 3 Solutions

Financial Accounting

Ch. 3 - Prob. 1YT Ch. 3 - Prob. 2YT Ch. 3 - Prob. 3YT Ch. 3 - Prob. 4YT Ch. 3 - Prob. 5YT Ch. 3 - Prob. 6YT Ch. 3 - Prob. 7YT Ch. 3 - How does accrual basis accounting differ from cash...Ch. 3 - Prob. 2Q Ch. 3 - Prob. 3Q

Ch. 3 - Prob. 4Q Ch. 3 - What are accrued expenses?Ch. 3 - Prob. 6Q Ch. 3 - Prob. 7Q Ch. 3 - Name two common deferred expenses.Ch. 3 - What does it mean to recognize revenue?Ch. 3 - How does matching relate to accruals and...Ch. 3 - What is depreciation?Ch. 3 - Why is depreciation necessary?Ch. 3 - Prob. 13Q Ch. 3 - Prob. 14Q Ch. 3 - Prob. 1MCQ Ch. 3 - Prob. 2MCQ Ch. 3 - Prob. 3MCQ Ch. 3 - Prob. 4MCQ Ch. 3 - Prob. 5MCQ Ch. 3 - Prob. 6MCQ Ch. 3 - Prob. 7MCQ Ch. 3 - Prob. 8MCQ Ch. 3 - When prepaid insurance has been used, the...Ch. 3 - Prob. 10MCQ Ch. 3 - Prob. 1SEA Ch. 3 - Prob. 2SEA Ch. 3 - Account for interest expense. (LO 1, 2). UMC...Ch. 3 - Prob. 4SEA Ch. 3 - Account for insurance expense. (LO 1, 3). Catrina...Ch. 3 - Prob. 6SEA Ch. 3 - Account for unearned revenue. (LO 1, 3). Able...Ch. 3 - Prob. 8SEA Ch. 3 - Prob. 9SEA Ch. 3 - Prob. 10SEA Ch. 3 - Calculate profit margin on sales ratio. (LO 5)....Ch. 3 - Prob. 12SEB Ch. 3 - Prob. 13SEB Ch. 3 - Prob. 14SEB Ch. 3 - Prob. 15SEB Ch. 3 - Prob. 16SEB Ch. 3 - Prob. 17SEB Ch. 3 - Prob. 18SEB Ch. 3 - Prob. 19SEB Ch. 3 - Calculate net income. (LO I, 4). Suppose a company...Ch. 3 - Prob. 21SEB Ch. 3 - Prob. 22SEB Ch. 3 - Prob. 23EA Ch. 3 - Prob. 24EA Ch. 3 - Prob. 25EA Ch. 3 - Prob. 26EA Ch. 3 - Prob. 27EA Ch. 3 - Prob. 28EA Ch. 3 - Account for insurance expense. (LO 1, 3). Yodel ...Ch. 3 - Prob. 30EA Ch. 3 - Prob. 31EA Ch. 3 - Prob. 32EA Ch. 3 - Prob. 33EA Ch. 3 - Prob. 34EA Ch. 3 - Southeast Pest Control, Inc., was started when its...Ch. 3 - Prob. 36EA Ch. 3 - Prob. 37EA Ch. 3 - Prob. 38EA Ch. 3 - Prob. 39EA Ch. 3 - Prob. 40EB Ch. 3 - Prob. 41EB Ch. 3 - Prob. 42EB Ch. 3 - TJs Tavern paid 10,800 on February 1, 2010, for a...Ch. 3 - Prob. 44EB Ch. 3 - Prob. 45EB Ch. 3 - Account for insurance expense. (LO 1, 3). All...Ch. 3 - Prob. 47EB Ch. 3 - Prob. 48EB Ch. 3 - Prob. 49EB Ch. 3 - Prob. 50EB Ch. 3 - Prob. 51EB Ch. 3 - Prob. 52EB Ch. 3 - From the following list of accounts (1) identify...Ch. 3 - Prob. 54EB Ch. 3 - Prob. 55EB Ch. 3 - Prob. 56EB Ch. 3 - Prob. 57PA Ch. 3 - Prob. 58PA Ch. 3 - Prob. 59PA Ch. 3 - Following is a partial list of financial statement...Ch. 3 - Prob. 61PA Ch. 3 - Record adjustments. (LO 1, 2, 3). The Gladiator...Ch. 3 - Prob. 63PA Ch. 3 - Transactions for Pops Company for 2011 were as...Ch. 3 - Record adjustments and prepare financial...Ch. 3 - Prob. 66PA Ch. 3 - Prob. 67PA Ch. 3 - Record adjustments and prepare income statement....Ch. 3 - Prob. 69PB Ch. 3 - Prob. 70PB Ch. 3 - Following is a partial list of financial statement...Ch. 3 - Prob. 72PB Ch. 3 - Record adjustments. (LO 1, 2, 3). Summit Climbing...Ch. 3 - Prob. 74PB Ch. 3 - Prob. 75PB Ch. 3 - Record adjustments and prepare financial...Ch. 3 - Prob. 77PB Ch. 3 - Prob. 78PB Ch. 3 - Identify and explain accruals and deferrals. (LO...Ch. 3 - Prob. 2FSA Ch. 3 - Prob. 3FSA Ch. 3 - Prob. 1CTP Ch. 3 - Prob. 1IE Ch. 3 - Prob. 3IE Ch. 3 - Prob. 4IE

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Identify the option that is considered as an example of an accrual.

Solution Summary: The author identifies the option that is considered an example of an accrual. Option b is the correct option and the other options are incorrect.

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Identify the option that is considered as an example of an accrual.

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Chapter 3 Solutions