information that should be recorded. Kieso‚ Weygandt & Warfield (2007) explain that items should be recognized if‚ “it is an element‚ is measurable‚ and is relevant and reliable” (p 68). Companies are able to recognize as many dealings as they wish‚ especially if they feel that these dealings will
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accounting. The equation places debits and credits on each side of the equation with a balance on each side being required. The debits are accounted for as assets‚ while the credits fall under liabilities and shareholder equity. (Kimmel‚ Weygandt‚ and Kieso‚ 2011) The equation looks like: Assets = Liabilities + Shareholder Equity. A system of journal entries that show a debit and credit for each entry is used to enter the information. At the end of the accounting period‚ a ledger is generated that shows
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15 1‚ 2‚ 6‚ 12 Cash vs. Accrual Basis. 15‚ 16‚ 17 12 18‚ 19 *10. Reversing entries. 18 13 20 *11. Worksheet. 19 21‚ 22‚ 23 11 12 *These topics are dealt with in an Appendix to the Chapter. Copyright © 2011 John Wiley & Sons‚ Inc. Kieso‚ Intermediate Accounting‚ 14/e‚ Solutions Manual (For Instructor Use Only) 3-1 ASSIGNMENT CLASSIFICATION TABLE (BY LEARNING OBJECTIVE) Learning Objectives Brief Exercises Exercises Problems 1. Understand basic accounting terminology. 2.
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(Kimmel‚ Weygandt‚ & Kieso‚ 2011‚ p. 13). The claims of creditors are also known as liabilities‚ which are funds owed‚ and assets are the items that a company has or owns. The balance sheet is helpful to managers and employees to have a clear picture of the reported time period and creditors use this report to determine repayment of funds borrowed. “The income statement reports the success of failure of the company’s operations for a period of time” (Kimmel‚ Weygandt‚ & Kieso‚ 2011‚ p. 11-12). This
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(Weygandt‚ Kimmel‚ & Kieso‚ 2008). The purpose of the monetary unit assumptions is to only reflect the financial impact of the business. An economic entity assumption can be any unit or organization within a society which requires that the activities of the entity be kept separate and distinct from the activities of the owners and all other economic entities‚ ensuring transactions between businesses or personal and business activities are kept separate (Weygandt‚ Kimmel‚ & Kieso‚ 2008). The U.S
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“Assets consist of resources a business owns‚” (Kimmel‚ Weygandt‚ & Kieso‚ 2010‚ p. 12). Tangible assets would include land‚ land improvements‚ buildings‚ and equipment. These types of asset would be classified as fixed assets. “Intangible assets are rights‚ privileges‚ and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance‚” (Kimmel‚ Weygandt‚ & Kieso‚ 2010‚ p. 414). Types of intangible assets include patents‚ copyrights‚
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(Kimmel‚ Weygandt‚ Kieso‚ 2011) Internal control has Five Primary Components: 1. Control Environment 2. Risk Assessment 3. Control Activities 4. Information and Communication 5. Monitoring First since LJB is currently a privately held company they are not required to follow SOX‚ however the future plan is to become a publically held company and therefore the evaluation and recommendations within this
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The purpose of balance sheets is to provide users with the current financial position of a business based on what it owns and owes (Kimmel‚ Weygandt‚ & Kieso‚ 2010). For instance‚ creditors analyze balance sheets to determine the likelihood a debt will be repaid (Kimmel‚ Weygandt‚ & Kieso‚ 2010). Income statements provide a summary of gains‚ losses‚ revenues‚ expenses‚ net income‚ and net loss of a business for a specific period (Hillstrom & Hillstrom‚ 2002). The purpose
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consist of eight steps (1) analyzing transactions and other events‚ (2) journalizing‚ (3) posting; (4) preparing trail balance‚ (5) adjusting entries‚ (6) preparing adjusting trial balance; (7) preparing financial statements; and (8) closing process (Kieso‚ Weygandt‚ & Warfield‚ 2007‚ p. 93). For easier understanding‚ this paper I will explore a small auto repair business‚ Absolute Autowerks that I work for to explain the accounting process‚ including the people‚ processes‚ and the systems integrated
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that make it useful to existing and potential investors‚ lenders‚ and other creditors for making decisions about an organization. A decision maker needs to determine which alternative provides the most useful information for decision-making purposes (Kieso‚ Weygandt‚ & Warfield‚ 2007). To make the information useful‚ effective accounting information needs to be understandable to a reasonably informed user and contain primary qualities of relevance and reliability and secondary qualities of comparability
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