You Are the Accountant for Klemmer Corporation

question 127

Essay

You are the accountant for Klemmer Corporation. At the company's year end, December 31, 2020, you discover there is an amount of $30,000 that has been earned by Klemmer but not yet billed to its customers by the year end. Laura Klemmer, the owner, tells you not to bill the customers as it is company policy not to bill customers until February 2020, well after the Christmas holidays. Klemmer has sales staff that are paid a bonus at year end on sales revenue billed.
-What account(s) is (are) affected by not recording the transaction? Identify the account(s) as an asset, liability, revenue or expense.

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Definitions:

Effective Number

A statistical concept that represents the number of units in a dataset that contribute information to a particular analysis, often used in the context of sample size or diversity.

Risk of Dying

The probability or chance of an individual dying from a specific cause or in a given time period.

Metastatic Cancer

Cancer that has spread from the primary site of origin to different areas of the body through the lymph system or bloodstream.

Piece-Rate System

A pay system where employees are compensated based on the amount of work they complete, commonly used in manufacturing and production jobs.