Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Question
Chapter 2, Problem 24E
a.
To determine
Identify an expense that could be matched directly with revenue.
b.
To determine
Identify a period expense that would be difficult to match with revenue.
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Expense Recognition Question:
Why is that sometimes there is no direct relationship between expenses and revenue's? Please explain, I don't understand. Thanks
Question 3
An important inherent risk related to revenue transactions and revenue recognition:
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Why are such costs/expenses more difficult to directly associate revenue? (Eg: Administrative salary expense, Interest expense, etc) Please explain.
Chapter 2 Solutions
Survey Of Accounting
Ch. 2 - 1. What does accrual accounting attempt to...Ch. 2 - 2. Define recognition. How is it independent of...Ch. 2 - 3. What does the term deferral mean?Ch. 2 - 4. If cash is collected in advance of performing...Ch. 2 - Prob. 5QCh. 2 - 6. What effect does the issue of common stock have...Ch. 2 - 7. How does the recognition of revenue on account...Ch. 2 - 8. Give an example of an asset source transaction....Ch. 2 - 9. When is revenue recognized under accrual...Ch. 2 - 10. Give an example of an asset exchange...
Ch. 2 - 11. What is the effect on the right side of the...Ch. 2 - Prob. 12QCh. 2 - Prob. 13QCh. 2 - Prob. 14QCh. 2 - Prob. 15QCh. 2 - Prob. 16QCh. 2 - 17. Why may net cash flow from operating...Ch. 2 - Prob. 18QCh. 2 - Prob. 19QCh. 2 - 20. What is the difference between a cost and an...Ch. 2 - Prob. 21QCh. 2 - Prob. 22QCh. 2 - 23. What does the term expense mean?Ch. 2 - Prob. 24QCh. 2 - 25. What is the purpose of the statement of...Ch. 2 - Prob. 26QCh. 2 - 27. Why is the balance sheet dated as of a...Ch. 2 - 28. In what order are assets listed on the balance...Ch. 2 - Prob. 29QCh. 2 - Prob. 30QCh. 2 - 31. What types of accounts are closed at the end...Ch. 2 - 32. Give several examples of period costs.Ch. 2 - 33. Give an example of a cost that can be directly...Ch. 2 - Prob. 34QCh. 2 - Prob. 1ECh. 2 - Exercise 2-2 Effect of accrued expenses on the...Ch. 2 - Prob. 3ECh. 2 - Prob. 4ECh. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - Prob. 7ECh. 2 - Prob. 8ECh. 2 - Exercise 2-9 Supplies on financial statements Yard...Ch. 2 - Prob. 10ECh. 2 - Exercise 2-11 Prepaid items on financial...Ch. 2 - Exercise 2-12 Effect of an error on financial...Ch. 2 - Exercise 2-13 Unearned items on financial...Ch. 2 - Prob. 14ECh. 2 - Prob. 15ECh. 2 - Prob. 16ECh. 2 - Prob. 17ECh. 2 - Prob. 18ECh. 2 - Prob. 19ECh. 2 - Prob. 20ECh. 2 - Exercise 2-21 Adjusting the accounts Norell Inc....Ch. 2 - Prob. 22ECh. 2 - Prob. 23ECh. 2 - Prob. 24ECh. 2 - Prob. 25ECh. 2 - Prob. 26ECh. 2 - Exercise 2-27 Identifying transaction type and...Ch. 2 - Exercise 2-27A Effect of accounting events on the...Ch. 2 - Prob. 29ECh. 2 - Exercise 2-29A Identifying source, use, and...Ch. 2 - Prob. 31ECh. 2 - Problem 2-32 Recording events in a horizontal...Ch. 2 - Problem 2-37A Effect of adjusting entries on the...Ch. 2 - Prob. 34PCh. 2 - Prob. 35PCh. 2 - Problem 2-36 Identifying and arranging elements on...Ch. 2 - Problem 2-37 Missing information in financial...Ch. 2 - Problem 2-38 Events for two complete accounting...Ch. 2 - Prob. 1ATCCh. 2 - ATC 2-3 Research Assignment Identifying accruals...Ch. 2 - ATC 2-4 Writing Assignment Revenue Recognition and...
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Similar questions
- Matching Concept: Expenses & Revenues How does sales salaries expense directly relate to revenue? Please explain.arrow_forward29 Which of the following statements about revenues and expenses is correct? Multiple Choice Credits increase both revenues and expenses. Credits increase expenses and decrease revenues. Credits increase revenues and decrease expenses. Credits decrease both revenues and expenses.arrow_forwardDescribe the expense recognition principle (matching principle). Give specifics.arrow_forward
- Which of the following is not a pervasive expense recognition principle? a. immediate recognition b. systematic and rational allocation c. cash payment d. association of cause and effectarrow_forwardDifferential revenue is the amount of increase or decrease in revenue expected from a particular course of action as compared with an alternative. TRUE OR FALSEarrow_forwardWhich of the following concept is also called as Revenue Recognition Concept? O a. Accrual concept Ob. Realization concept Oc Matching concept Od. Disclosure conceptarrow_forward
- The practice of recording advance payments from customers as a liability is an example of applying the O Going concern assumption. O Monetary unit assumption. O Historical cost principle. Revenue recognition principle.arrow_forwardWhich of the following is the principle that a company must recognize revenue in the period in which it is earned; it is not considered earned until a product or service has been provided? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principlearrow_forwardAn item is considered material if:a. It doesn’t cost a lot of money.b. It is of a tangible good.c. It is likely to influence the decision of an investor or creditor.d. The cost of reporting the item is greater than its benefitsarrow_forward
- Question: Which accounting principle states that revenue should be recognized when it is earned and expenses when they are incurred? a. Matching principle b. Revenue recognition principle c. Conservatism principle d. Time period principlearrow_forwardPlease show your solution in good accounting form. Thank you! Disregard the computation of the amount remitted. REQUIRED: COMPUTE FOR THE CONSIGNMENT PROFITarrow_forwardTRUE or FALSE The cost should match with the revenue generated. It only means that with every income earned there is an expense given. This is called matching principle.arrow_forward
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