Generally Accepted Accounting Principles and Subject Matter Expert

Good Essays
Alpha Corporation hires a subject matter expert at a salary of Rs 5,000 per month including benefits. The subject matter expert is non-billable and is expected to help engineers with resolving their technical queries as well as assist them in development of new technology. The subject matter expert was hired on 1st of February and today is 1st of March of the same year. You have just paid him his salary. What accounts will this transaction impact?
Answer : Engineers cash account increases and company balance decreases . In terms of accounting head : (DR) Salary account (L) (CR) operating expense account ( Bank) (A) Bravo Corporation borrows Rs 1,000,000 on 1st Jan 2013 from a bank for corporate expenses. As per the terms of the agreement, Bravo Corporation will need to pay the bank $1,728,000 at the end of three years. Today is 1st of Jan 2014 and Bravo Corporation is preparing its Income Statement. What will be the value of Interest Expense that figures in the Income Statement?
Answer : As the accounting year would be 1st Jan – 31st dec 2013 and this being the first year ,and interest amount would be divided proportionally for 3 years hence income statement would be as follows . Baro Corporation. Income statement (1st Jan to 31st Dec 2013) Interest expense 242666
Charlie Corporation is in the business of development of software and as a result most of its engineers use PCs provided by the company for their work. During the past year, it sold 2 old PCs and bought 3 new PCs for its engineers. Each old PC sold was Rs 1000 and each new PC was bought for Rs 2000. The PCs were sold for cash and were purchased for cash. Owing to this transaction, how much should Charlie Corporation’s Fixed Asset account change for this year? You may ignore depreciation.
Answer :

You May Also Find These Documents Helpful

  • Powerful Essays

    Generally Accepted Accounting Principles (United States) In the U.S., generally accepted accounting principles, commonly abbreviated as US GAAP or simply GAAP, are accounting rules used to prepare, present, and report financial statements for a wide variety of entities, including publicly-traded and privately-held companies, non-profit organizations, and governments. Generally GAAP includes local applicable Accounting Framework, related accounting law, rules and Accounting Standard. Similar to…

    • 1498 Words
    • 6 Pages
    Powerful Essays
  • Better Essays

    Generally Accepted Accounting Principles September 2, 2013 NUR/571 Generally accepted accounting principles (GAAP) is the term “used to describe the body of and requirements that shape the preparation of the four primary financial statements (Cleverley & Cameron, 2007).” These statements include the balance sheet, the statement of revenues and expenses, statement of cash flow, and statement in changes of net assets (Cleverley & Cameron, 2007). These statements track financial information and…

    • 753 Words
    • 4 Pages
    Better Essays
  • Better Essays

    “Generally Accepted Accounting Principles (GAAP) is the methods, rules, practices and other procedures that have evolved to govern the preparation of financial statements” Justify the statement with suitable examples. Accounting is the language of business and it is used to communicate financial information. In order for that information to make sense, accounting is based on some fundamental concepts. Transactions are recorded in accounts, following certain fundamentals concepts and conventions…

    • 1145 Words
    • 5 Pages
    Better Essays
  • Good Essays

    Generally Accepted Accounting Principles HCS/571 July 11, 2011 Generally Accepted Accounting Principles Generally Accepted Accounting Principles, or GAAP, is an accounting language of business used in health care facilities that have specific policies they must abide by when making choices for the direction of the institution. The Financial Accounting Standards Board, also known as FASB, developed these rules to guide them in recording and reporting financial information. Organizations use…

    • 917 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Generally Accepted Accounting Principles Healthcare is continually evolving and has become a business and an economic force in current society. Historically, stakeholders such as physicians and other health care professionals are adept at making clinical and health-related decisions. However, they often lack the ability to make informed financial decisions. Many have come to realize financial criteria and cost-effective health care delivery is paramount to the success of modern healthcare systems…

    • 635 Words
    • 3 Pages
    Good Essays
  • Better Essays

    Part I. A. Generally Accepted Accounting Principles. GAAP is not a fixed set of rules. It is a guideline or more precisely a group of objectives and concepts that have evolved over 500 years from the basic concepts of Luca Pacioli set forth in the 1400s. It governs how financial statements are prepared and presented in the United States. The Financial Accounting Standards Boards (FASB), the American Institute of Certified Public Accountants and the Securities and Exchange Commission (SEC)…

    • 1268 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Accountants use generally accepted accounting principles (GAAP) to guide them in recording and reporting financial information. GAAP comprises a broad set of principles that have been developed by the accounting profession and the Securities and Exchange Commission (SEC). Two laws, the Securities Act of 1933 and the Securities Exchange Act of 1934, give the SEC authority to establish reporting and disclosure requirements. However, the SEC usually operates in an oversight capacity, allowing the FASB…

    • 1303 Words
    • 6 Pages
    Powerful Essays
  • Better Essays

    Generally Accepted Accounting Principles Stephanie R. Stewart HCS/571 September 24, 2012 Anne Harney Finlon Generally Accepted Accounting Principles Generally Accepted Accounting Principles (GAAP) are important ideas to understand when discussing finances of any kind. It is important for all nurses, especially those in management roles, to understand financial concepts and be involved in the budgetary process. This paper will help to create an understanding of GAAP, the purpose of the principles…

    • 1226 Words
    • 5 Pages
    Better Essays
  • Good Essays

    set of accounting criteria used to develop medical centers financial statements are known as generally accepted accounting principles (GAAP). GAAP are a mixture of respected criteria created by Securities and Exchange Commission (SEC) and accountants. The SEC has authority granted by The Securities Act of 1933 and the Securities Exchange Act of 1934, to determine reporting and disclosure requirements. Oversight is the general functions of the SEC, granting the Governmental Accounting Standards…

    • 844 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    How should goodwill, properly recorded on the books, be written off in accordance with generally accepted accounting principles? Goodwill is recorded in the accounts only under the circumstances that is is acquired through a purchase of another business or combination of businesses. According to Generally Accepted Accounting Principle under these circumstances where goodwill is acquired through a purchase by another business that it is recognized as having indefinite…

    • 2553 Words
    • 11 Pages
    Satisfactory Essays