Acct

Assignment Questions


Lorren Rodriguez


Acc/280

October 27, 2011











State two generally accepted report principles that worry to adjusting the accounts
Two generally accepted score principles that relate to adjusting accounts ar the revenue credit entry principle and the matching principle. The recognition principle states that revenues should be make loved in the accounting menses in which they were earned. The matching principle matches expenses with revenues in the period when the smart set makes efforts to generate those revenues (Weygandt, 2008, p.96).
Rick fenland, a lawyer, accepts a legal dispute in March, performs the work in April, and is paying in May. If Marshs law family prepares monthly fiscal statements, when should it recognize revenue from this conflict? why?
We need first to even up if Rick Marshs law firm is utilise the accrual-basis or cash-basis accounting. In accrual-basis accounting, income and expenses are recorded when the services are given or received (no matter if they are paid or not).



In cash-basis accounting, revenues and expenses are recorded when cash is really received or spent. Therefore, Rick Marshs law firm will recognize revenue from the legal engagement in April if his law firm is using the accrual-basis accounting. Conversely, the law firm will record the revenues in May if it is using the cash-basis accounting.
Why do accrual-basis financial statements provide more information than cash-basis statements?
Accrual-basis financial statements provide more useful information than the cash-basis ones because they are lucid with the matching principle that aims to record expenses in the same accounting period as the revenues that are earned as a result of those expenses (Larson, Wild, & Chiappetta, 2005, p. 96). Furthermore, accrual-basis financial statements...If you want to get a full-of-the-moon essay, order it on our website: Ordercustompaper.com



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