Acc280 Wk3

ACC/280 Week Three Individual Assignment 2. State pas de deux slackly accepted story principles that relate to adjusting the accounts. Revenue recognition Principle The tax income recognition principle dictates that companies recognize tax income enhancement in the accounting period in which it is earned. twinned Principle Accountants follow a straightforward rule in recognizing expenses: Let the expenses follow the tax incomes.That is, expense recognition is tie to receipts 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 pissed accepts a legal day of the month, 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 recognize this on their financial statement. 4. Why do accrual- foot financial statements provide more useful data than cash-basis statements?

Under the accrual basis, companies translate legal proceeding in the periods in which the events occur, using the accrual basis to influence net income essence companies recognize revenues when earned (rather than when they receive cash). It excessively 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 they pay bring out cash.The ! cash basis seems appealing due to its simplicity, but it a great deal produces misleading financial statements. It fails to record revenue that a community has earned but for which it has not received the cash. Also, it does not stand for 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 necessitate to get a full essay, order it on our website: OrderCustomPaper.com

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