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BYP 3-4 REAL–WORLD FOCUS
Answers will vary depending on the company and article chosen by
the student.
BYP 3-5 REAL-WORLD FOCUS
(a) Many large companies, big accounting firms, and accounting standard
setters tend to favor a switch to IFRS because they believe that global
accounting standards would save companies money by consolidating
(b) Many small companies are opposed to switching to IFRS because (1)
(c) It has been suggested that IFRS lacks standards that are specific to
utility companies that U.S. GAAP contains.
(d) Condorsement (a word invented by the SEC) represents a
combination of convergence and endorsement. Under condorsement,
BYP 3-6 DECISION MAKING ACROSS THE ORGANIZATION
(a) HAPPY CAMPER PARK
Income Statement
For the Quarter Ended March 31, 2015
Revenues
Rent revenue ($90,000 – $15,000) ................ $75,000
Expenses
Salaries and wages expense
[$29,800 + ($300 X 2)] ................................. $30,400
Advertising expense ($5,200 + $110) ........... 5,310
Supplies expense ($6,200 – $1,700) ............. 4,500
quarter ended March 31. The expense recognition principle dictates
that efforts (expenses) be matched with accomplishments (revenues)
whenever it is reasonable and practicable to do so. This means that the
BYP 3-7 COMMUNICATION ACTIVITY
Dear Ms. Hall:
Adjusting entries are made at the end of the accounting period to ensure
that the revenue recognition and expense recognition principles required
Adjusting entries are needed because the trial balance may not contain an
1. Some events are not journalized daily because it is not efficient to
by employees.
2. The expiration of some costs is not journalized during the account-
insurance.
3. Some expenses, such as the cost of utility service and property
There are four types of adjusting entries:
1. Prepaid expenses—expenses paid in cash and recorded as assets
BYP 3-7 (Continued)
3. Accrued revenues—revenues earned but not yet received in cash
or recorded.
BYP 3-8 ETHICS CASE
(a) The stakeholders in this situation are:
Melissa Ray, controller.
The president of Kellner Company.
Kellner Company stockholders.
entries.
2. It is customary for adjusting entries to be dated as of the balance
illegal).
