Fundamentals of Financial Accounting
5th Edition
ISBN: 9780078025914
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 3, Problem 16Q
For each of the following situations, indicate whether it represents an accounting error and explain why it is or is not an error. Also state whether a
- a. Cash received from a customer was debited to Accounts Receivable and credited to Cash.
- b. Revenue was recognized when a customer purchased a gift card for future use.
- c. An expense was recorded as an asset.
- d. The debit side of a
journal entry was recorded in the accounts, but the credit side was not. - e. A company shareholder purchased a new car, but this was not recorded by the company.
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Chapter 3 Solutions
Fundamentals of Financial Accounting
Ch. 3 - Prob. 1QCh. 3 - When accounting was developed in the 14th and 15th...Ch. 3 - Define accrual basis accounting and contrast it...Ch. 3 - Prob. 4QCh. 3 - Prob. 5QCh. 3 - Prob. 6QCh. 3 - Explain the expense recognition principle...Ch. 3 - Explain why stockholders equity is increased by...Ch. 3 - Explain why revenues are recorded as credits and...Ch. 3 - Complete the following table by entering either...
Ch. 3 - Complete the following table by entering either...Ch. 3 - Prob. 12QCh. 3 - Prob. 13QCh. 3 - What is the difference between Accounts Receivable...Ch. 3 - What is the difference between Accounts Payable...Ch. 3 - For each of the following situations, indicate...Ch. 3 - Prob. 17QCh. 3 - Which of the following items is not a specific...Ch. 3 - Prob. 2MCCh. 3 - Prob. 3MCCh. 3 - Prob. 4MCCh. 3 - If a company incorrectly records a payment as an...Ch. 3 - Prob. 6MCCh. 3 - Prob. 7MCCh. 3 - Prob. 8MCCh. 3 - Webby Corporation reported the following amounts...Ch. 3 - Prob. 10MCCh. 3 - Prob. 3.1MECh. 3 - Identifying Accrual Basis Revenues The following...Ch. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Recording Accrual Basis Revenues For each of the...Ch. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 3.6MECh. 3 - Prob. 3.7MECh. 3 - Prob. 3.8MECh. 3 - Prob. 3.9MECh. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Prob. 3.11MECh. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 3.13MECh. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Prob. 3.16MECh. 3 - Determining the Accounting Equation Effects of...Ch. 3 - Prob. 3.18MECh. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Preparing Financial Statements from a Trial...Ch. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Prob. 3.22MECh. 3 - Calculating and Interpreting Net Profit Margin...Ch. 3 - Prob. 3.1ECh. 3 - Matching Definitions with Terms Match each...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Prob. 3.10ECh. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Recording and Posting Accrual Basis Journal...Ch. 3 - Prob. 3.13ECh. 3 - Analyzing Transactions from the Perspectives of...Ch. 3 - Prob. 3.15ECh. 3 - Determining Accounting Equation Effects of Several...Ch. 3 - Preparing Journal Entries For each of the...Ch. 3 - Prob. 3.18ECh. 3 - Creating an Unadjusted Trial Balance Based on the...Ch. 3 - Inferring Transactions, Creating Financial...Ch. 3 - Determining the Effects of Various Transactions EZ...Ch. 3 - COACHED PROBLEMS Recording Nonquantitative Journal...Ch. 3 - Prob. 3.2CPCh. 3 - Prob. 3.3CPCh. 3 - Prob. 3.4CPCh. 3 - Prob. 3.1PACh. 3 - Recording Journal Entries Diana Mark is the...Ch. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Prob. 3.4PACh. 3 - Prob. 3.1PBCh. 3 - Prob. 3.2PBCh. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Analyzing, Journalizing, and Interpreting Business...Ch. 3 - Prob. 3.1COPCh. 3 - SKIL_S DEVELOPMENT CASES Finding Financial...Ch. 3 - Prob. 3.2SDCCh. 3 - Prob. 3.4SDCCh. 3 - Ethical Decision Making: A Mini-Case Mike Lynch is...Ch. 3 - Accounting for Business Operations Starting in...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Suppose we collected cash from a charge customer and the debit was to Cash and the credit to Sales. How and when would this error be discovered?arrow_forwardTransactions and T Accounts The following selected transactions were completed during October of the current year: 1. Billed customers for fees earned, $52,490. 2. Purchased supplies on account, $2,260. 3. Received cash from customers on account, $49,340. 4. Paid creditors on account, $1,360. a. Journalize these transactions in a two-column journal, using the appropriate number to iden does not require an entry, leave it blank. Transaction Account Debit Credit (1) (2) (3) (4)arrow_forwardTrue Or False? The entry to record a cash receipt from a customer when the service is to be provided in a future period involves a debit to an unearned revenue account.arrow_forward
- Discuss, using practical example the effect of prepayment figures on the preparation of a financial statement? Suggest Four reasons why there might be difference between the balance on the receivable ledger control account and the total list of the list of accounts receivable ledger balances.? Discuss, using practical example how revenue expenditure should not be capitalized ?arrow_forwardIf a journal entry includes a debit or credit to the Cash account, it is most likely which of thefollowing?arrow_forwardTo test whether debits to accounts receivable represent valid transactions, the auditor should trace entries from the A. Accounts receivable ledger to sales documentation. B. Sales journal to the accounts receivable ledger. C. Accounts receivable ledger to the cash receipts journal. D. Cash receipts documentation to the accounts receivable ledger.arrow_forward
- Which of the following errors will be detected by a trial balance? a. Posting a credit to Sales instead of the Accounts Payable b. Incorrecty computing the balance of the cash account c. Not journalizing a complete sales transaction d. Forgetting to post a complete purchase transactionarrow_forwardCustomer deposits (prepayments) are recorded - Select one: a. as debits to accounts receivable for the customer b. as negative sales invoices C. as credits to accounts receivable for the customer O d. when the customer makes a partial payment on accountarrow_forwardFor each of the following situations, indicate whether itrepresents an accounting error and explain why it is or isnot an error. Also state whether a trial balance would indicate that an error exists for each situation.d. The debit side of a journal entry was recorded in theaccounts, but the credit side was not.arrow_forward
- In which journal is the receipt of a promissory note from a customer on account recorded ? a. revenue journal b. cash receipts journal c. general journal d. purchases journalarrow_forwardFor each of the following situations, indicate whether itrepresents an accounting error and explain why it is or isnot an error. Also state whether a trial balance would indicate that an error exists for each situation.b. Revenue was recognized when a customer purchased agift card for future use.arrow_forwardA company that records credit purchases in a purchases journal and records purchases returns in a general journal made the following errors. Enter A, B, or C indicating when each error should be discovered. A. When preparing the schedule of accounts payable. B. When crossfooting the purchases journal. C. When preparing the trial balance. 1. Made an addition error in totaling the Office Supplies column of the purchases journal. 2. Made an addition error in determining the balance of a creditor’s subsidiary account. 3. Posted a purchases return to the Accounts Payable account and to the creditor’s subsidiary account but did not post the purchases return to the Inventory account. 4. Correctly recorded an $8,000 purchase in the purchases journal but posted it to the creditor’s subsidiary account as an $800 purchase. 5. Posted a purchases return to the Inventory account and to the Accounts Payable account but did not post to the creditor’s subsidiary account.arrow_forward
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