Purchase Solution

Accepted Accounting Principles

Not what you're looking for?

Ask Custom Question

2. State two generally accepted accounting principles that
relate to adjusting the accounts.
3. Rick Marsh, a lawyer, accepts a legal engagement in March,
performs the work in April, and is paid in May. If Marshâ??
law firm prepares monthly financial statements, when
should it recognize revenue from this engagement? Why?
4. Why do accrual-basis financial statements provide more
useful information than cash-basis statements?
8. Distinguish between the two categories of adjusting
entries, and identify the types of adjustments applicable to
each category.

Purchase this Solution
Solution Summary

The accepted accounting principles are examined.

Solution Preview

Dear student,
Answers to your four questions are provided in a separate word document attached supported by illustrations and power point slides for detailed explanation.

Question 2. State two generally accepted accounting principles that
relate to adjusting the accounts.
Answer to question 2:
GAAP include two important principles of accounting. They are Revenue recognition and Matching principles. Revenue Principle requires that companies should record revenue when it is (1) realized or realizable and (2) earned.It is not necessary that cash is received. This method of accounting is called Accrual Basis Of Accounting.
Revenue recognition principal states that the revenue is recognized when income is actually earned. The basic principal of revenue recognition is that income should be earned and its collectibility should be assured.
Most of the business enterprises use accrual basis of accounting. In accrual accounting revenue is recognized when it is actually earned whether actually received or notMatching principle states that expenses have to be matched with revenues as long as it is reasonable to do so. Expenses are recognized not when the work is ...

Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Introduction to Finance

This quiz test introductory finance topics.

Motivation

This tests some key elements of major motivation theories.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

View More Free Quizzes
Related BrainMass Solutions

  • GAAP Generally Accepted Accounting Principles

    The general accepted accounting principles, or generally accepted accounting principles, are the rules, guidelines, and regulations, that make up the structural framework of the principles and procedures by which accountants record and prepare quality

  • GAAP

    What are Generally Accepted Accounting Principles (GAAP)? These are rules and procedures that define accepted accounting practice. This is a mix of detailed procedures and principles.

  • Generally-Accepted Accounting Principles

    328486 Generally-Accepted Accounting Principles At the completion of the Darby Department Store audit the president asks about the meaning of the phrase "in conformity with generally accepted accounting principles," which appears in your audit report

  • Darby Department Store - Auditing Report

    accounting principles used.

  • Generally Accepted Accounting Principles

    Generally Accepted Accounting Principles (US GAAP); International Accounting Standards (IFRS); and Liquidity. Please see the below for the complete tutorial.

  • The GAAP and Accounting Principles

    The main way that generally accepted accounting principles vary from accounting principles, is due to the fact that generally accepted accounting principles are a compilation of the many different rules and principles that accountants generally follow

  • Countries That Follow Generally Accepted Accounting Principles

    304526 Countries That Follow Generally Accepted Accounting Principles Do all countries follow Generally Accepted Accounting Principles (GAAP)? Why or why not? Is there one set of accounting standards followed by all countries?

  • Generally Accepted Accounting Principles

    179439 Generally Accepted Accounting Principles Why are Generally Accepted Accounting Principles needed and what organization establishes them?

  • Explanation of Generally Accepted Accounting Practices (GAAP)

    568739 Explanation of Generally Accepted Accounting Practices (GAAP) What are the generally accepted accounting principles? Why do we need GAAPs? What is the purpose and goal for this practice? What is the challenge of using this practice?

  • GAAP and the Development of Management Accounting Systems

    This solution discusses whether generally accepted accounting principles assist with the development of management accounting systems.

View More Related Solutions