<span>29 days of 1.3% inflation.
Convert to relative increase: (1+0.013) = 1.013.
(1.013)^29 -1 = 45.43% (the effect of compounding)
45%.</span>
Answer:
B. Credit to sales revenue
Explanation:
As per revenue recognition principle, revenue should be recognized when it is earned and not when cash is received.
As per accrual basis of accounting, revenue is to be recognized when the ownership of the goods has been passed by the seller to the buyer and there is reasonable assurance that payment would be received.
When a sale is effected and goods are delivered with reasonable certainty that payment would be received, following journal entry is recorded:
Accounts Receivable A/C Dr.
To Sales Revenue
(Being equipment sold recorded)
Answer:
The likely outcoe could be,
Likely be:
- Glinda will win, because the statute of limitations starts to run on the date, she filed a suit, i.e. Feb.22, 2014.
- Glinda will win, because the statute of limitations starts to run from the time that the she discovered the breach, i.e. Jan. 17, 2014.
Likely not be:
- Glinda will lose, because the statute of limitations ran on Jan. 13, 2013, i.e. two years after the date the contract was entered on Jan. 14, 2011.
-Glinda will lose, because the statute of limitations requires a demonstration of attempt to cure.
Answer: The answer is: Debit Account Receivable $2,000; Credit Unearned Revenue $2,000.
Explanation: The accounting entries above were premised on the <em>accrual accounting concept</em>, which states that income and expenses are recognized as they occur regardless of when actual cash settlement takes place. The amount was credited to unearned revenue simply because the client has not been billed and there is not further information on the duration of the service. Therefore, the amount would be <u>unwound from the unearned revenue to income, based on the duration of service and percentage of completion</u>. However, <u>when the client pays, the account receivable account would be credited.</u>
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