Cash Accounting: Cash accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid. Accrual Accounting: Accrual Accounting is an accounting method in which all the revenue and expenses are recorded only when they incurred, irrespective of the receipt or payment of cash. To explain: To explain the difference between the recording of the given events of the Company B with respect to Cash accounting and Accrual accounting.

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Answer 1

Question

Chapter 4, Problem 4.7E

(a)

To determine

Cash Accounting:

Cash accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

Accrual Accounting:

Accrual Accounting is an accounting method in which all the revenue and expenses are recorded only when they incurred, irrespective of the receipt or payment of cash.

To explain:

To explain the difference between the recording of the given events of the Company B with respect to Cash accounting and Accrual accounting.

(b)

To determine

To explain: The reason of having positive net income in income statement and running out of cash for the company B.

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Falcon Tech Co. manufactures and sells portable chargers. The company has annual fixed costs of $12,000,000. Each charger sells for $20 and incurs $11 in variable manufacturing costs. If the company’s total sales revenue last year was $45,000,000, how many chargers must Falcon Tech sell to achieve EBIT = 0?

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Answer 2

Question

Chapter 4, Problem 4.7E

(a)

To determine

Cash Accounting:

Cash accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

Accrual Accounting:

Accrual Accounting is an accounting method in which all the revenue and expenses are recorded only when they incurred, irrespective of the receipt or payment of cash.

To explain:

To explain the difference between the recording of the given events of the Company B with respect to Cash accounting and Accrual accounting.

(b)

To determine

To explain: The reason of having positive net income in income statement and running out of cash for the company B.

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Answer 3

Question

Chapter 4, Problem 4.7E

(a)

To determine

Cash Accounting:

Cash accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

Accrual Accounting:

Accrual Accounting is an accounting method in which all the revenue and expenses are recorded only when they incurred, irrespective of the receipt or payment of cash.

To explain:

To explain the difference between the recording of the given events of the Company B with respect to Cash accounting and Accrual accounting.

(b)

To determine

To explain: The reason of having positive net income in income statement and running out of cash for the company B.

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Answer 4

Question

Chapter 4, Problem 4.7E

(a)

To determine

Cash Accounting:

Cash accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

Accrual Accounting:

Accrual Accounting is an accounting method in which all the revenue and expenses are recorded only when they incurred, irrespective of the receipt or payment of cash.

To explain:

To explain the difference between the recording of the given events of the Company B with respect to Cash accounting and Accrual accounting.

(b)

To determine

To explain: The reason of having positive net income in income statement and running out of cash for the company B.

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Answer 5

Chapter 4, Problem 4.7E

(a)

To determine

Cash Accounting:

Cash accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

Accrual Accounting:

Accrual Accounting is an accounting method in which all the revenue and expenses are recorded only when they incurred, irrespective of the receipt or payment of cash.

To explain:

To explain the difference between the recording of the given events of the Company B with respect to Cash accounting and Accrual accounting.

(b)

To determine

To explain: The reason of having positive net income in income statement and running out of cash for the company B.

Answer 6

Chapter 4, Problem 4.7E

(a)

To determine

Cash Accounting:

Cash accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

Accrual Accounting:

Accrual Accounting is an accounting method in which all the revenue and expenses are recorded only when they incurred, irrespective of the receipt or payment of cash.

To explain:

To explain the difference between the recording of the given events of the Company B with respect to Cash accounting and Accrual accounting.

Answer 7

Chapter 4, Problem 4.7E

(a)

To determine

Cash Accounting:

Cash accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

Accrual Accounting:

Accrual Accounting is an accounting method in which all the revenue and expenses are recorded only when they incurred, irrespective of the receipt or payment of cash.

To explain:

To explain the difference between the recording of the given events of the Company B with respect to Cash accounting and Accrual accounting.

Answer 8

(b)

To determine

To explain: The reason of having positive net income in income statement and running out of cash for the company B.

Answer 9

(b)

To determine

To explain: The reason of having positive net income in income statement and running out of cash for the company B.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 4 - Prob. 1Q Ch. 4 - Identify and stale two generally accepted...Ch. 4 - Prob. 3Q Ch. 4 - Prob. 4Q Ch. 4 - Prob. 5Q Ch. 4 - Why may the financial information in an unadjusted...Ch. 4 - Distinguish between the two categories of...Ch. 4 - What types of accounts does a company debit and...Ch. 4 - Prob. 9Q Ch. 4 - Prob. 10Q

Solution Summary: The author explains the difference between the recording of events of the company B with respect to Cash accounting and Accrual accounting.

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To explain: The reason of having positive net income in income statement and running out of cash for the company B.

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