Intro to Accounting Week 3 Notes
Intro to Accounting Week 3 Notes ACCT - 23020 - 002
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ACCT - 23020 - 002
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This 5 page Class Notes was uploaded by Alyssa Brutsche on Friday February 12, 2016. The Class Notes belongs to ACCT - 23020 - 002 at Kent State University taught by Wendy M. Tietz (P) in Fall 2015. Since its upload, it has received 59 views. For similar materials see INTRODUCTION TO FINANCIAL ACCOUNTING in Accounting at Kent State University.
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Date Created: 02/12/16
S3-1 Southeast corporation made sales of $825 million during 2014. Of this amount, southeast collected cash for all but $27 million. The company’s cost of goods sold was $255 million, and all other expenses for the year totaled $325 million. Also during 2014, Southeast paid $350 million for its inventory and $255 million for everything else. Beginning cash was $75 million. Southeast’s top management is interviewing you for a job and they ask two questions: How much was Southeast’s net income for 2014 How much was Southeast’s cash balance at the end of 2014 -a. Net income= $245 -b. Ending cash $263 An expense incurred in 2014 is not paid until 2015. Using the accrual basis of accounting, the expense should appear on -the 2014 income statement The revenue principle requires that a business record revenue when the business -deliver goods or services to customer A customer pays Starbucks $250 on March 15 for coffee to be served at a party in April. Has Starbucks earned revenue on March 15? -no Which of the following is not one of the three basic categories of accounting adjustments? a.)Expenses b.)Deferrals c.) Depreciation d.)Accruals -Answer A What type of account is Prepaid Rent? a.)Asset b.)Liability c.) Revenue d.)Expense -Answer A What type of account is unearned revenue? a.)Asset b.)Liability c.) Revenue d.)Expense -Answer B A deferral is an adjustment for payment of an item or receipt of cash in advance -True Which of the following accounts would be closed at the end of a period? -Answer Wages Expense
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