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

question 157

Essay

You are reviewing the accounting records of Buddy's Foreign Automotive,owned by a single stockholder,Bruce Jones.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:

Society's Norms

The unwritten rules and expectations that guide behavior and interactions within a community or society.

Accrued Wages

Wages that have been earned by employees but have not yet been paid by the employer.

Liabilities

Financial obligations or debts that a company owes to external parties.

Net Income

The net income of a company following the deduction of all expenses, taxes, and costs from its total revenue.