We should deduct all expenses from the amount of revenues to get the net income. There is no loss. It means the company is a profit making company and there must be a return on investment.
Any one must be interested to invest in a profit making company for their safe investment. A loss making company cannot give such reliability. Income is the amount of collection of which the performance obligation is complete. The generally accepted accounting principles—GAAP, highlights the performance obligation as the completion of providing services or delivering goods to customers.
The revenue is recognized here as and when the performance obligation is complete. The company deposited the same into bank. Intermediate Accounting 15th Edition Edit editions. Increases in net assets of a particular enterprise resulting from transfers to it from other entities of something of value to obtain or increase ownership interests or equity in it. Assets are most commonly received as investments by owners, but that which is received may include services or satisfaction or conversion of liabilities of the enterprise.
Decreases in net assets of a particular enterprise resulting from transferring assets, rendering services, or incurring liabilities by the enterprise to owners. Distributions to owners decrease ownership interests or equity in an enterprise. Change in equity net assets of an entity during a period from transactions and other events and circumstances from nonowner sources.
It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Increases in equity net assets from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity during a period except those that result from revenues or investments by owners.
Decreases in equity net assets from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity during a period except those that result from expenses or distributions to owners. In the practice of financial accounting, certain basic assumptions are important to an understanding of the manner in which data are presented. The following four basic assumptions underlie the financial accounting structure:.
Economic activity can be identified with a particular unit of accountability in a manner that assumes the company is separate and distinct from its owners or other business units. In the absence of contrary information, a company is assumed to have a long life. The current relevance of the historical cost principle is dependent on the going-concern assumption.
Money is the common denominator of economic activity and provides an appropriate basis for accounting measurement and analysis. The monetary unit is assumed to remain relatively stable over the years in terms of purchasing power. In essence, this assumption disregards any inflation or deflation in the economy in which the company operates. Certain basic principles are followed by accountants in recording and reporting the transactions of a business entity.
These principles relate to how assets, liabilities, revenues, and expenses are to be identified, measured, and reported. Revenue Recognition Chapter Accounting for Income Taxes Chapter Accounting for Pensions and Postretirement Benefits Chapter Accounting for Leases Chapter Accounting Changes and Error Analysis Chapter Statement of Cash Flows Chapter Mark and Spencer Group plc Appendix B: Review and Practice and Solutions: New practice opportunities with solutions are integrated throughout the textbook and the Wiley Engage course.
Each textbook chapter now provides students with a Review and Practice section that includes learning objective summaries, a key term listing, and a practice problem with solution. Streamlined Learning Objectives and Design: Each chapter now offers a more focused approach within each chapter and a design that improves compatibility across all media.
Placed near the end of each chapter, the Authoritative Literature References include a full citation as well as a practice Research Case.
In response to the changing environment, we have significantly revised several chapters. Review and Practice Solutions: These videos provide a step-by-step walkthrough of thorough, relevant homework problems and solutions to review important concepts. A complete online version of the textbook is included with seamless integration of all content.
The accounting profession needs a conceptual framework to: (1) build on and relate to an established body of concepts and objectives, (2) provide a framework for solving new and emerging practical problems, (3) increase financial statement users' understanding of and confidence in financial reporting, and (4) enhance comparability among companies' financial statements.
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View Homework Help - Intermediate Accounting I - Chapter 2 Quiz (with answers) from ACCT at Arkansas State University. Intermediate Accounting I - Chapter 2 1. Quality of information that80%(5). Analyze routine economic transactions and events and record their effects on a company's financial position using the accounting equation format;.
Study Flashcards On Intermediate Accounting 1 Chapter 2 at paydayloanslexington.gq Quickly memorize the terms, phrases and much more. paydayloanslexington.gq makes it easy to get the grade you want! CHAPTER 2 Conceptual Framework Underlying Financial Accounting ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises.