lying of P1-6A The four underlying assumptions of generally accepted accounting principles are economic entity, monetary unit, periodicity, and going concern. Consider the four independent situations below. 1. Jumbo's is a local restaurant. Due to a bad shipment of potatoes, several of the company's customers become ill, and the company receives considerable bad publicity. Revenues are way down, several of its bills are past due, and the company is making plans to close the restaurant at the end of the month. The company continues to report its assets in the balance sheet at historical (original) cost. 2. Gorloks Tax Services is owned and operated by Sam Martin. The company has the usual business assets: land, building, cash, equipment, and supplies. In addition, Sam decides to buy a boat for him and his family to enjoy on the weekends. Sam includes the boat as an asset in the balance sheet of Gorloks Tax Services. 3. Claim Jumpers International, a U.S.-based company, has operations in the United States and in Europe. For the current year, the company purchased two trucks in the United States for $10,000 and three trucks in Europe for €20,000 (euros). Because of the differences in currencies, the company reported "Five Trucks" with no corresponding amount in the balance sheet. 4. Cobbers Etc. sells specialty music equipment ranging from African bongo drums to grand pianos. Because of the fluctuating nature of the business, management decides to publish financial statements only when a substantial amount of activity has taken place. Its last set of financial statements covered a period of 14 months, and the set of financial statements before that covered a period of 18 months. Required: For each situation, indicate which of the underlying assumptions of GAAP is violated.

Answer in step by step with explanation. Don't use Ai and chatgpt

On December 1, Anson's Drug Store concluded that a customer's $325 account receivable was uncollected and that the account should be written off. What effect will this write-off have on the company's net income and balance sheet totals assuming the direct write-off method is used to account for bad debts? a. decrease in net income; decrease in total assets b. no effect on net income; no effect on total assets c. increase in net income; no effect on total assets d. no effect on net income; decrease in total assets

On October 12 of the current year, a company determined that a customer's account receivable was uncollectible and that the account should be written off. Assuming the direct write-off method is used to account for bad debts, what effect will this write-off have on the company's net income and total assets? Mutiple Choice   Decrease in net income; no effect on total assets.    No effect on net income; no effect on total assets.   Decrease in net income; decrease in total assets.   Increase in net income; no effect on total assets.   No effect on net income; decrease in total assets

Compare Two Methods of Accounting for Uncollectible Receivables been obtained from the accounts: Required: Assemble the desired data. Enter a decrease in the amount of expense as a negative number and all other amounts as positive numbers. Call Systems Company Bad Debt Expense

What will happen if the amount of bad debt expense is understated at year-end? a. Allowance for Doubtful Accounts will be overstated. O b. Net accounts receivable will be overstated. O c. Net income will be understated. O d. Stockholders' equity will be understated. РОСОРНONЕ SHOT ON POCOPHONE F1

QUESTION 8 A company's unadjusted trial balance shows a debit balance of $30,000 in the allowance for doubtful accounts. This means that O a. The company has made an error. O b. The company must recognize enough bad debt expense to bring the allowance to a credit balance. O c. The company has written off too many accounts receivable and should reassess its write-off policy. O d. None of the above.

Assume that you are the controller of a business that provides legal services to clients. Suppose that the company has had a tough year, so the revenues have been lagging behind, based on previous years standards. What would you do if your boss (the chief executive officer [CEO] of the company) asked to reclassify a transaction to report loan proceeds of $150,000 as if the cash came from service fee revenue from clients instead. Would following the CEOs advice impact the companys accounting equation? How would reclassifying this one transaction change the outcome of the balance sheet, the income statement, and the statement of retained earnings? Would making this reclassification change the perception that users of the financial statements would have of the companys current year success and future year potential? Write a memo, detailing your willingness (or not) to embrace this suggestion, giving reasons behind your decision. Remember to exercise diplomacy, even if you must dissent from the opinion of a supervisor. Note that the challenge of the assignment is to keep your integrity intact, while also keeping your job, if possible.

Which of the following will affect net income? O O Writing off an Account Receivable. Estimating bad debts at the end of the year Re-establishing and collection of an account that was previously written off. O All of the above transactions will affect net income.

Part A: If Stacy Lynn wants to show the bank the maximum profit over the previous 2-year period, which costing method should be presented? Part B: However, the bank requires that all financial statements conform to Generally Accepted Accounting Principles (GAAP). Based on that requirement, which costing method should be presented? Part C: The bank has delivered a memo in preparation for the meeting to negotiate the Credit Line; the memo states that they will expect a significant Net Income. Based on your responses to Parts A and B, what are some of the legal and ethical issues that may be of importance to Stacy Lynn?