Question

During the Spock Hotel's last audit, the auditor noticed that the financial statements were missing some footnotes important for users using them for decision making. This action by the Spock Hotel is a violation of:

		the full disclosure principle.
		the economic entity concept.
		the revenue recognition principle.
		the going concern concept

A trial balance is a necessary checkpoint for uncovering certain types of errors before one proceeds to other steps in the accounting process.

True

False

When posting transactions from the general journal to the ledger, ________ will need to be recorded on the journal page.

		the debited amount
		the credied amount
		the date
		the account number

Le Hotel Cougar purchases $3,000 worth of supplies on July 15th, but they do not have to pay until next month. How should we record this transaction in July?

		Debit $3,000 for Supplies. Debit $3,000 for Accounts Payable.
		Debit $3,000 for Supplies. Credit $3,000 for Accounts Payable.
		Credit $3,000 for Supplies. Credit $3,000 for Accounts Payable.
		Credit $3,000 for Supplies. Debit $3,000 for Accounts Payable.

Answer 1

Requirement 1:

Answer: The full disclosure principle

Reason:

Full disclosure principle is a principle where the company is required to maintain all the relevant books and reports required for the users of financial information to go through such information and take decision on the performance of the business

Requirement 2:

Answer: True

Explanation:

In trail balance is an important check point where the can verify whether all the debits and credits tally with each other , Hence the given statement is true

Requirement 3:

Answer: The account number

Reason:

When posting transactions from the general journal to the ledger we must include proper account numbers under the column ref,no in order to quickly access to such respective ledgers from general journal

Requirement: 4:

Answer: Debit $3,000 for Supplies. Credit $3,000 for Accounts Payable.

Reason:

since the supplies are purchase on account so the supplies account is debited because its an asset and account payable is credited because its an liability