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Kimmel, Weygandt, Kieso, Trenholm Financial Accounting, Second Canadian Edition

CHAPTER 4

Accrual Accounting Concepts

ASSIGNMENT CLASSIFICATION TABLE

Study Objectives QuestionsBrief

Exercises ExercisesA

ProblemsB

Problems

*1. Explain te revenuereco!nition principle andte matcin! principle.

1" #" $" % 1 1" # 1A 1B

*#. &ifferentiate bet'een

te cas basis and teaccrual basis of ac(countin!.

) # $ #A" $A #B" $B

*$. Explain 'y adjustin!entries are needed" andidentify te major typesof adjustin! entries.

" + $ %

*%. Prepare adjustin! entriesfor prepayments.

," -" 1" 11"1#" 1+" 1,"1-

%" )" " +"11 %" )" " +" ,"1" 11

#A" $A" %A")A" A" +A",A" -A" 1A"

11A" 1#A

#B" $B" %B)B" B" +B,B" -B" 1B"

11B" 1#B

*). Prepare adjustin! entriesfor accruals.

1$" 1%" 1)"1" 1+" 1,"1-

,"-"1"11 %" )" " +" ,"-" 1" 11

#A" $A" %A")A" A" +A",A" -A" 1A"11A" 1#A

#B" $B" %B")B" B" +B",B" -B" 1B"11B" 1#B

*. &escribe te nature andpurpose of te adjustedtrial balance.

# 1#" 1$ 1" 11" 1# ,A" -A" 1A"11A" 1#A

,B" -B" 1B"11B" 1#B

*+. Explain te purposes of

closin! entries.

#1" ##" #$ 1%" 1) 1$ -A" 1A"

1#A

-B" 1B"

1#B

,. &escribe te re/uiredsteps in te accountin!cycle.

#%" #) 1#A 1#B

Solutions 0anual %(1opyri!t 2 #% 3on 4iley 5 Sons anada" 6td. 7nautori8ed copyin!" distribution" or transmission of tis pa!e is strictly proibited.

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Kimmel, Weygandt, Kieso, Trenholm Financial Accounting, Second Canadian Edition

Problem9umber &escription

&ifficulty6evel

:imeAllotted ;min.identify accounts to be closed.

0oderate %()

11B omplete accountin! cycle trou! to preparation offinancial statements.

0oderate +

1#B omplete all steps in accountin! cycle. 0oderate +

Solutions 0anual %($opyri!t 2 #% 3on 4iley 5 Sons anada" 6td. 7nautori8ed copyin!" distribution" or transmission of tis pa!e is strictly proibited.

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ANSERS TO !"ESTIONS

1. ;a< 7nder te time period assumption" an accountant is re/uired to determine terelevance of eac accountin! transaction to specific accountin! periods.

;b< An accountin! time period of one year in len!t is referred to as a fiscal year.

#. :e t'o !enerally accepted accountin! principles tat pertain to adjustin! teaccounts are ;1< te revenue reco!nition principle" 'ic states tat revenue souldbe reco!ni8ed in te time period in 'ic it is earned" and ;#< te matcin! principle"'ic states tat efforts ;expenses< must be matced 'it accomplisments;revenues

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Questions ;ontinued