Indicate the expense account affected and the amount

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Reference no: EM132091040

Question: Identifying Expenses Under accrual basis accounting, expenses are recognized when incurred, which means the activity giving rise to the expense has occurred. The following transactions occurred in January 2009:

a. American Express pays its salespersons $3,500 in commissions related to December financial advisory services sales. Answer from American Express's standpoint.

b. On January 31, American Express determines that it will pay its salespersons $4,200 in commissions related to January sales. The payment will be made in early February. Answer from American Express's standpoint.

c. The city of Omaha contracts with Waste Management, Inc. to provide trash collection services beginning in January. The city pays $7.2 million for the entire year. Answer from the city's standpoint.

d. The University of Florida orders 60,000 season football tickets from its printer and pays $6,000 in advance for the custom printing. The first game will be played in September. Answer from the university's standpoint.

e. A Houston Community College employee works eight hours at $15 per hour on January 31; payday is not until February 3. Answer from the college's point of view.

f. Wang Consulting paid $3,600 for a fire insurance policy on January 1. The policy covers 12 months beginning on January 1. Answer from Wang's point of view.

g. Ziegler Machines, a sole proprietorship selling farm equipment, receives a $230 phone bill at the end of January for calls made in January. The bill has not been paid to date.

Required: For each transaction that is an expense to be recognized in January, indicate the expense account affected and the amount. If an expense is not to be recognized in January, indicate why.

Reference no: EM132091040

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