A Number of Unrelated Transactions Recorded by National Company Are

question 85

Essay

A number of unrelated transactions recorded by National Company are as follows: Instructions
For each of the above situations, identify the accounting assumption, concept, constraint or recognition criteria that have been violated. Prepare the correct journal entry as it should have been made. If no entry should have been made, or if additional financial statement disclosure is required, explain.

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Definitions:

Accrued Liabilities

Liabilities recorded on a company’s balance sheet for expenses that have been incurred but not yet paid.

Accounts Payable

Accounts payable is the balance of money owed to suppliers or creditors for goods or services purchased on credit, which is typically a short-term liability.

Inventory Increase

A rise in the total value or amount of goods held by a company intended for sale or production.

Cost of Goods Sold

The direct costs associated with producing goods sold by a business, including materials and labor.