Krystyne Bought a Widget from Ryan

question 24

Essay

Krystyne bought a widget from Ryan.As payment, she gave him a cheque for $10 000 that was drawn on her account at the Bank of Windsor.Because she discovered that the widget was defective, Krystyne countermanded her cheque before Ryan presented it for payment.Due to a clerical error, the bank nevertheless honoured the cheque and paid $10 000 to Ryan.Is the bank entitled to debit Krystyne's account? Do you have enough information to answer that question?

Grasp the differences between accrual and cash basis accounting, and the importance of adjusting entries in the accrual basis.

Understand the concept of unearned revenue and its impact on financial statements.

Grasp the principles of accrual basis accounting, including revenue recognition and matching principles.

Identify and explain the need for adjusting entries and their effects on the accounting equation.

---

Definitions:

European Monetary Union

An agreement among European Union member countries to adopt a single currency, the euro, and a single monetary policy governed by the European Central Bank.

Euro

The official currency used by 19 of the 27 European Union countries, also known by the acronym EUR.

Member Nations

Countries that are part of an international organization or agreement, and thus abide by its rules and contribute to its goals, such as the United Nations or European Union.

Volkswagen Beetle

A distinctive small car manufactured by Volkswagen, known for its iconic design and significant impact on automobile history.