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.

Analyze the rights and responsibilities involved in various bailment situations.

Assess the legal consequences of actions taken by parties in a bailment relationship.

Explain the significance of exculpatory clauses and their enforceability.

Evaluate how possession and authorization can affect ownership and liability in bailment cases.

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Definitions:

Calcium Cycle

A geochemical cycle involving the movement and exchange of calcium among the lithosphere, hydrosphere, biosphere, and atmosphere.

Nutrient Cycling

The process of the movement and exchange of organic and inorganic matter back into the production of living matter.

Wastes

Wastes are substances or materials that are discarded after serving their primary purpose or are considered not useful.

Bacteria

Single-celled, prokaryotic organisms that can be found in various environments, some of which are beneficial while others can cause diseases.