Assignment Finice

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timer Asked: May 5th, 2017
account_balance_wallet $60

Question Description

All information in ( financialaccounting.zip)

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School: University of Virginia

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Just finished editing this. Question A

STUDENT NAME AND ID

Accounting Assignment

Course title

Date

STUDENT NAME AND ID
DECLARATION
I hereby declare that the content of this document is purely my own. Where the ideas are from
other authors, appropriate acknowledgment has been made.

Programme:
Year of study
Module:

2

STUDENT NAME AND ID

3

QUESTION 1
a.
The owner is wrong. This is because under accrual basis of accounting, the respective accounting
expenses are matched with correlated revenues and are consequently reported when such
expenses occur and not when the cash is paid (Frank, 1979). Therefore, in this case, the accrual
basis permits that the books of accounts should be closed since the accrued salary expenses can
be matched effectively and sufficiently.
Additionally, the company will record more revenues due to the unpaid salaries. This revenue
does not portray the real balance that the firm has. Since the service has already been offered by
the workers and the month has ended, it is only proper for the company to pay the workers and
close the books through matching the salary expense with the income generated by the workers.
To account for the salary paid to the workers, the salary expense account should be credited
while the wage account debited. This way, the firm will close its books in a proper manner as
guided by the Generally Accepted Accounting Standards (Gunn, 1984).
Since the salary hasn’t been paid, there will be a problem in matching the salary payments in the
month of January since the service was not offered in that month but December. The improper
recording of the salary expense in the month of January may make the owner culpable of
accounting malpractice if an audit was to be conducted.
The magnitude of the owner’s malpractice can be tantamount to gross violation of the law of the
land if the statements were to be produced with this error since the statements will reflect unfair

Programme:
Year of study
Module:

STUDENT NAME AND ID

4

representation of the financial position of the firm. The quality of these documents will be very
bad and may misguide the user in a serious way (Gunn, 1984).
It is therefore evident that the expenses be matched with the revenues for consistency in the
financial statements. The firm should strictly adhere to its accounting system of matching
principle and avoid the delay of recognizing the expenses while acknowledging the revenues in
time. The vice versa is also wrong as the recognition should happen as and when they occur.
b.
Table 1: Profit transaction in assets
DETAILS
Selling price

AMOUNT
10000

Initial cost (0.75*1000)

7500.00

PROFIT

2500

Since the profit can be found by subtracting the costs from the revenues obtained, then we can
determine the profit through subtracting 7500 from 10000. The 7500 value can be obtained
through the multiplication of the cost per unit and the total number of units. i.e 0.75 by 1000
which we get the answer as 7500. The 10000 figure is already known from the sales value given.

Programme:
Year of study
Mod...

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Review

Anonymous
Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

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