You are reviewing the accounting records of Cathy’s Antiques, Inc. owned by Cathy Miller. You have uncovered the following situations. Compose a memo to Ms. Miller that cites the appropriate accounting principle and the suggested action for each separate situation.
A. In August, a check for $500 was written to Wee Day Care Center. This amount represents child care for her son Brandon.
B. Cathy plans a Going Out of Business Sale for May, since she will be closing her business for a month-long vacation in June. She plans to reopen July 1 and will continue operating Cathy’s Antiques indefinitely.
C. Cathy received a shipment of pine furniture from Quebec, Canada. The invoice was stated in Canadian dollars.
D. Joseph Clark paid $1,500 for a dining table. The amount was recorded as revenue. The table will be delivered to Mr. Clark in six weeks.
Answer:A
You are reviewing the accounting records of Cathy’s Antiques, Inc. owned by Cathy Miller. You have uncovered the following situations. Compose a memo to Ms. Miller that cites the appropriate accounting principle and the suggested action for each separate situation.
A. In August, a check for $500 was written to Wee Day Care Center. This amount represents child care for her son Brandon. B. Cathy plans a Going Out of Business Sale for May, since she will be closing her business for a month-long vacation in June. She plans to reopen July 1 and will continue operating Cathy’s Antiques indefinitely. C. Cathy received a shipment of pine furniture from Quebec, Canada. The invoice was stated in Canadian dollars. D. Joseph Clark paid $1,500 for a dining table. The amount was recorded as revenue. The table will be delivered to Mr. Clark in six weeks.