What is your opinion of randys reasoning

Assignment Help Accounting Basics
Reference no: EM131231392

Accounting

Consider the following scenario:

A small equipment company is preparing its annual financial statements in anticipation of applying for a loan. During the last week of the year, the company received a shipment of inventory but has not paid for it. The invoice indicates that the company owes $5,000 for the purchase. The owner, Randy Ray, has decided to omit this asset and the related liability from the year-end balance sheet, reasoning that it is okay because he is omitting both of them, which means there is no difference in owners' equity.

For this assignment you are to address the following:

• What is your opinion of Randy's reasoning? (1 paragraph)

• Explain the circumstances under which Randy's decision would be acceptable under GAAP and circumstances under which it would definitely be unacceptable. (3 to 4 paragraphs).

Reference no: EM131231392

Questions Cloud

Determine the quantity consumed and supplied : Economics 217 - Determine the quantity consumed and supplied domestically if there is free trade and derive the import demand schedule and the export supply schedule.
Why hedge funds may be able to achieve higher returns : Explain why hedge funds may be able to achieve higher returns for their investors than mutual funds. - Explain why hedge funds and mutual funds may have different risks.
How private equity funds can improve business conditions : Money that individual and institutional investors previously invested in stocks is now being invested in private equity funds.
Develop excel spread sheets to do strength design : Develop Excel spread sheets to do strength design to give the sizes of the tension members, columns and the connections at A, B and C for the truss system. It is required that you use only OneSteel 300 Plus UB and UC sections.
What is your opinion of randys reasoning : What is your opinion of Randy's reasoning? Explain the circumstances under which Randy's decision would be acceptable under GAAP and circumstances under which it would definitely be unacceptable.
Prepare a preliminary design for a solar pv system : Prepare a preliminary design for a solar PV system to provide 1 kW of stand-alone 24 h/day power to a travel trailer. Make a schematic diagram of the overall system, a cost estimate, a cell array design, and a battery storage. Then discuss the ass..
Internal seminar of developing effective work teams : You are a department manger with a need to help create an inter-department work team. You have just completed an internal seminar of developing effective work teams and want to put that information to use for this project. What factors are important ..
Source of mutual fund versus private equity fund : Which type of fund do you think would be better able to capitalize on a weak, publicly traded firm that has ignored all forms of shareholder activism?
Write a paper on foreign exchange rate specifically to honda : Accounting One page of paper double space. Write a paper on Foreign Exchange Rate specifically to Honda and Brexit. Yen exchange rate during exporting 2015.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Earnings per share problem

For 2010 Kuhlman Corporation reported net income of $28,000; net sales $400,000; and average share outstanding 6,000. There were no preferred stock dividends. What was the 2010 earnings per share?

  Bamba corporations cost formula for its selling and

bamba corporations cost formula for its selling and administrative expense is 47900 per month plus 52 per unit. for the

  In a february 10 2003 businessweek article cvss potent

in a february 10 2003 businessweek article cvss potent growth potion joseph agnese points out that the retail pharmacy

  Each department has a different overhead cost driver -

dsl company has two manufacturing departments - the machining department and the assembly department. each department

  Determine the following measures for 2014 rounding to one

the comparative financial statements of blige inc. are as follows. the market price of blige inc. common stock was 57

  Concept of sustainable income

Understand the concept of sustainable income. Indicate how irregular items are presented. Explain the concept of comprehensive income.

  Explain the concept of depreciation

Explain the concept of depreciation. Which of the following depreciation methods would you recommend: straight-line depreciation, double declining balance method, or an lternative method?

  Payroll-what it means to you

Do you receive a form 1099? Why should you receive a higher hourly rate than if you were issued a W-2 Form (this relates to the self-employment tax of 14.3% based on 7.65% as the withholding from the employee and the match paid by the employer as p..

  During 2005 patnode announced and paid dividends of 1000

during 2005 patnode announced and paid dividends of 1000 the only dividend-related activity during the year. what was

  Using internal control to restrict illegal or unethical

problem 4-21 using internal control to restrict illegal or unethical behavior required for each of the following

  Company x purchases all its required inventory exactly 1

company x purchases all its required inventory exactly 1 quarter prior to the quarter of sale. the cost of inventory is

  Capital asset transactions

Kirby is in the 15% tax bracket and had the following capital asset transactions during 2010:

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd