Acc280 Wk3

ACC/280 Week Three Individual Assignment 2. State span in the main accepted story principles that relate to adjusting the accounts. Revenue actualization Principle The tax income recognition principle dictates that companies recognize receipts enhancement enhancement in the accounting period in which it is earned. co-ordinated Principle Accountants follow a straightforward rule in recognizing expenses: Let the expenses follow the taxations.That is, expense recognition is tie to revenue recognition. 3. Rick fen, a lawyer, accepts a legal difference in March, performs the work in April, and is paid in May. If Marshs law trusty prepares monthly fiscal statements, when should it recognize revenue from this ne 2rk? Why? It should recognize revenue once the unanimous accepts a legal betrothal, since the contract is a legal engagement and it is a binding contract, regardless of the time set for a payment agreement, the firm can rec ognize this on their pecuniary statement. 4. Why do accrual- foot financial statements provide more useful data than cash-basis statements?

Under the accrual basis, companies take proceeding in the periods in which the events occur, using the accrual basis to countersink net income essence companies recognize revenues when earned (rather than when they receive cash). It withal means recognizing expenses when incurred (rather than when paid). An utility(a) to the accrual basis is the cash basis. Under cash-basis accounting, companies record revenue when they receive cash. They record an expense when th ey pay forth cash.The cash basis seems appe! aling due to its simplicity, but it ofttimes produces misleading financial statements. It fails to record revenue that a caller has earned but for which it has not received the cash. Also, it does not forgather expenses with earned revenues. Cash-basis accounting is not in accordance with generally accepted accounting principles (GAAP). 8. Distinguish between the two categories of...If you demand to get a full essay, order it on our website: OrderCustomPaper.com

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