You Are Reviewing the Accounting Records of Buddy's Foreign Automotive,owned

question 50

Essay

You are reviewing the accounting records of Buddy's Foreign Automotive,owned by Bruce Jones,its sole stockholder.You have uncovered the following situations.List the appropriate accounting principle related to each independent scenario and suggest a correct action for each.
1.In August,a check for $500 was written to Community Sports.This amount represents soccer camp for his daughter Cassie.
2.Bruce plans a Going Out of Business Sale for June,since he will be closing the business for a month-long vacation in July.He plans to reopen August 1 and will continue operating Buddy's Foreign Automotive indefinitely.
3.Buddy received a shipment of tools from Ontario,Canada.The invoice was stated in Canadian dollars.
4.Sandy Lane paid $1,500 for a major repair services.The amount was recorded as revenue.The parts for the repair must be ordered from overseas and the service won't be complete until the following month.

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Definitions:

Cardiovascular Deaths

Fatal outcomes resulting from diseases and conditions that affect the heart and blood vessels.

Just-World Phenomenon

The cognitive bias that a person's actions are inherently inclined to bring morally fair and fitting consequences to that person, to the end of all noble actions being eventually rewarded and all evil actions eventually punished.

Victims of Misfortune

Individuals who suffer from unfortunate events or circumstances that are beyond their control and often elicit sympathy from others.

Just-World Phenomenon

The cognitive bias to believe that the world is fair and people get what they deserve, leading to rationalizing inequality or suffering.