The existence ug that have sustained losses for the previous two years partnersh

Question

The existence ug that have sustained losses for the previous two years partnership form of business for less than a year 16. Accounts Receivable is best described as 1. Liabilities of the company that represent the amount owed to suppliers. 2. Amounts that have previously been received from customers 3. Assets of the company representing the amount owed to them by 4. Amounts that have previously been paid to suppliers. 17. Using the numbers below. calculate the receivalettoerrais e Beginning A/R $1,200,500 v Ending A/R Net Sales $2,300,000 $11,759,000 18. GAAP stands for: a. Grand Accounting & Able Procedures b. Generally Accepted Accounting Principles c. Good Accounting & Auditing Policies d. Governmental Accounting and Auditing Procedures b. "We recognize expenses in the same period as the revenue they help to generate. This is the defintion of which principle in accounting? d. 19. Ste wer year Which of the following is not possible when recording a transaction" a. Liabilities increase and assets decrease b. Stockholders' equity increases and assets increase c. One asset increases and another asset decreases d. Stockholders' equity decrease and assets decrease 20. the 75,C he e rooner Gompany has the following transactions: l on installation service to be done on May 15 one on May 15

Explanation / Answer

16. answer-

3. assests of the company representing amount owned to them by customers

17. answer-

(a) receivable turnover ratio= net sales/average account receivable

average debtors= open acoount receivable+ closing account receivable/2

= ($1200500 + $ 2300000)/2

= $ 1750250

RTR = $ 11759000/$1750250

= 6.72 times

(b) avearge collection period = 365 days/ receivable turnover ratio

= 365/6.72

= 54 days (approx)

18. answer

GAAP stands for (b) generally accepted accounting principles

19. answer.

MATCHING PRINCIPLE- accounting principles follow double entry system of accounting in which expenses are to be matched with the revenue.

20. answer

following situation is not possible-

(a) liabilities increases and assests decreases

because increase in liabilities will result in increase in assest.

  

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