Download New ACCT 212 Week 3 Discussion: Reasons Why Accountants Use the Accrual Method

$2.99

Download New ACCT 212 Week 3 Discussion Reasons Why Accountants Use the Accrual Method

 

Let’s start the week by exploring accrual-basis accounting. Why do accountants use the accrual-basis method instead of the cash-basis method of accounting? What are some of the benefits of using accrual accounting?

GAAP requires that accrual accounting be used. This basis for accounting involves some basic accounting principles—the revenue recognition principle and the matching principle. Explain why these principles require adjusting entries.

A deferral involves putting off the recognition of a revenue or expense because the cash has changed hands before the appropriate recognition point. An accrual involves recording a revenue or expense because the recognition point is during the period, but the cash has not yet been received or paid. Provide an example of each and then the appropriate adjusting entry.

Apply accrual accounting by responding to some of these questions:

(1) On November 15, the company received $5,000 cash from a customer for services that were … on November 1. According to the Revenue Recognition Principle, on which date should the revenue … recorded?

(2) On November 15, the Company received $3,000 cash from a customer for services that will …d on December 1. According to the Revenue Recognition Principle, on which date should the revenue be recorded?

(3) On March 4, T Law asks GL Services for basic lawn maintenance totaling $200. GL provides maintenance on March 8, and T Law pays for the lawn maintenance on April 12. Under accrual-basis accounting, on which date should T Law record lawn maintenance expenses?

(4) The company performs $2,900 of services during the month and bills customers. The customers are … to pay next month. Record the journal entry for customer billing using (a) accrual-basis accounting and (b) cash-basis accounting.

(5) Suppose a company rents office space for one year, paying $18,000 ($1,500/month) in advance on September 1. Record the adjusting entry on December 31

(6) A gym offers one-year memberships for $99 and requires customers to pay the full amount of cash at the beginning of the membership period. For the gym, this is an example of a(n):

 

Want Assistance with the Discussions?

Exams are an essential part of a student’s schooling. Without an exam, no student can improve through the ladder of success. However, university college students these days do now no longer have the time to be interested in their studies, cause they will be overwhelmed by the manner of the method of jobs that help the very schooling they need. In their time of need, Get Exam Done is proper right here to offer a hand of help. For university college students who are thinking, can I pay a person to take my exam, this is the area to get it from. We have been supporting university college students for over 2 years with their pay someone to take my exam troubles and characteristic successfully completed over 5000+ exams everywhere in the states.

Scott Belmont from NYC, USA
Hired a tutor to take programming class and final exam
40 minutes ago
Ebony Nicole from Bronx, USA
Hired a tutor to take history and algebra final exams
2 hours ago
Randy Wells from Texas, USA
Hired an expert to take chemistry proctored exam
1 hour ago
Kurt LeBlanc from Iowa, USA
Hired an expert to take statistics online exam
1 hour ago