Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Chapter 2, Problem 8EA
To determine
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You've studied about how transactions are documented and reported in your accounting classes. Why should you study information systems? Why is it necessary to comprehend the technical aspects?
1) Why is it not necessary to model activities such as data entry of information about customers or suppliers, mailing invoices to customers, and recording invoices received from suppliers as events in an REA diagram?
2) How can REA diagrams help an auditor understand a client’s business processes?
3) How would accounts payable be reflected in an REA diagram? Why?
Recording transactions in the accounting system requires knowledge of the important characteristics of the elements of financial statements, such as assets and liabilities. In addition, accountants must understand the inherent uncertainty in accounting measures and distinctions between related accounting concepts that are important in evaluating the effects of transactions on the financial statements.
Instructions
Access the IASB Framework at the IASB website. When you have accessed the documents, you can use the search tool in your Internet browser to respond to the following items. (Provide paragraph citations.)
a. Provide the definition of an asset and discuss how the economic benefits embodied in an asset might flow to a company.
b. Provide the definition of a liability and discuss how a company might satisfy a liability.
c. What is “accrual basis”? How do adjusting entries illustrate application of the accrual basis?
Chapter 2 Solutions
Principles of Accounting
Ch. 2 - A company incurs a cost for a part that is needed...Ch. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - How are assets and expenses related, and why are...Ch. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Tell whether each of the following accounts is an...Ch. 2 - Prob. 2SE
Ch. 2 - Prob. 3SECh. 2 - Prob. 4SECh. 2 - Prob. 5SECh. 2 - Prob. 6SECh. 2 - Prob. 7SECh. 2 - Prepare a general journal form like the one in...Ch. 2 - Prepare three ledger account forms like the one in...Ch. 2 - Prob. 10SECh. 2 - Prob. 11SECh. 2 - Prob. 12SECh. 2 - Which of the following events would be recognized...Ch. 2 - You are given the following list of accounts with...Ch. 2 - The following ledger accounts are for Afocentric...Ch. 2 - Prob. 4EACh. 2 - The accounts that follow are applicable to Harolds...Ch. 2 - Prob. 6EACh. 2 - Prob. 7EACh. 2 - Prob. 8EACh. 2 - After recording the transactions in E6A, prepare a...Ch. 2 - The list that follows presents Shah Companys...Ch. 2 - Which of the following errors would cause a trial...Ch. 2 - Prob. 12EACh. 2 - Record the transactions in E6A in the general...Ch. 2 - Prob. 14EACh. 2 - Prob. 15EACh. 2 - Prob. 16EACh. 2 - Highland Design Company creates radio and...Ch. 2 - The following accounts are applicable to Georges...Ch. 2 - Jennifer Lopez opened a school for administrative...Ch. 2 - Sid Patel bid for and won a concession to rent...Ch. 2 - Nordtown Company is a marketing firm. The companys...Ch. 2 - Prob. 6APCh. 2 - The following accounts are applicable to Raymonds...Ch. 2 - Prob. 8APCh. 2 - David Roberts began an upholstery cleaning...Ch. 2 - Prob. 10APCh. 2 - Prob. 1CCh. 2 - Prob. 2CCh. 2 - Prob. 3CCh. 2 - Prob. 4CCh. 2 - Prob. 5CCh. 2 - Prob. 6CCh. 2 - Prob. 7C
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Similar questions
- Recording transactions in the accounting system requires knowledge of the important characteristics of the elements of financial statements, such as assets and liabilities. In addition, accountants must understand the inherent uncertainty in accounting measures and distinctions between related accounting concepts that are important in evaluating the effects of transactions on the financial statements. Instructions Log in and provide explanations for the following items. (Provide paragraph citations.) When you have accessed the documents, you can use the search tool in your Internet browser. a. The three essential characteristics of assets. b. The three essential characteristics of liabilities. c. Uncertainty and its effect on financial statements. d. The difference between realization and recognition.arrow_forwardWhat is the role of the accountant in the SDLC? Why might accountants be called on for input into the development of a nonaccounting information system?arrow_forwardWhy the design of a table or a form is important? Why accountant has to have sufficient knowledge about database and data modeling?arrow_forward
- Accountants at an organization that uses an ERP system speak in terms of "data flows" between modules. Justify the accountants' inaccuracy, and suggest a more appropriate word for them to use.arrow_forwardResearch the topic "data analytics". After completing the research: Describe the understanding of data analytics. Be sure to include its impact on the accounting community and financial accounting specifically. Why does one think it is a major focus of the updated CPA exam?arrow_forwardThe accounting and other reports that help managers monitor performance and focus on problems and/or opportunities are a form of_______________arrow_forward
- Where can an auditor find a client’s documentation of the accounting system?arrow_forwardBesides accountants, which users do you think rely on journal and ledger records (e.g., managers, investors, owners, creditors). Why?arrow_forwardWhat is better: adopting a manual accounting information system or a computerized accounting information system? How to set up the system?arrow_forward
- Which is preferable: implementing a manual accounting information system or implementing a computerised accounting information system? What is the procedure for setting up the system?arrow_forwardDescribe how information reduces risk when you make a personal or work-related decision. What are information rules? How do they simplify the process of making decisions? What is the difference between data and information? Give one example of accounting data and one example of accounting information. List the five functions of an MIS. What are the components of a typical business report? Describe the three types of computer applications that help employees, managers, and executives make smart decisions. What purpose do audits and GAAPs serve in today’s business world? How do the major provisions of the Sarbanes-Oxley Act affect a public company’s audit procedures? What is the principal difference between a balance sheet and an income statement? How are current assets distinguished from fixed assets? Why are fixed assets depreciated on a balance sheet? How does the use of money solve the problems associated with a barter system of exchange? For a business firm, what type of activities…arrow_forwardCite one reason why there is a continued evolution of information system and how does this affect the roles of accountants or auditors of accounting information system?arrow_forward
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