Categorize the accounting tasks performed by Urlacher as relating to either the identification (I), recording (R), or communication (C) aspects of accounting. E1-2 (a) The following are users of financial statements.
___I___Customers __I___Securities and Exchange Commission ___C__Internal Revenue Service __C__Store manager ___I___Labor unions __R__Suppliers ___C__Marketing manager __C_ Vice-president of finance ___R__Production superviso
Identify the users as being either external users or internal users. (b) The following questions could be asked by an internal user or an external user. __INTERNAL USERS__ Can we afford to give our employees a pay raise? __EXTERNAL USERS__Did the company earn a satisfactory income? __INTERNAL USERS___Do we need to borrow in the near future?
__EXTERNAL USERS__How does the company’s profitability compare to other companies? _ INTERNAL USERS____What does it cost us to manufacture each unit produced? _ INTERNAL USERS____Which product should we emphasize?
__EXTERNAL USERS___Will the company be able to pay its short-term debts?
For each of the three situations, say if the accounting method used is correct or incorrect. If correct, identify which principle or assumption supports the method used. If incorrect, identify which principle or assumption has been violated.
E1-5 Meredith Cleaners has the following balance sheet items. Accounts payable
Cash- incorrect- is an asset for the company is not something than the company needs to paid for to keep the company going. Salaries payable – Correct-is an expense that the company need to paid to keep the company running. Cleaning supplies – Correct-the need cleaning supplies to keep their company clean and it is an expense....
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