Question

b.   Critically evaluate the statement: “You don’t see profit hopping down the field”.
What does it refer to? Do you agree or disagree, and why?   

c.   Discuss the difference(s), if any, between Accounts Receivable and Notes Payable.

e.   Provide an example of an Accrued Liability for a company. Explain when and why a firm must record an Accrued Liability.

Answer 1

1) You don’t see profit hopping down the field that in layman language something is underlying day by day. It refer in business term when particular industry start ignoring the facts that impact its profitability. When we used this term that your profit decline toward the land.

2) Difference between Accounts Receivable and Notes Payable

Accounts receivable is received by business when they sold good on credit and received an promise note from customer that he/she will paid after this term.

But Notes Payable is a liability account in which a borrower's written promise to pay a lender is recorded. (The lender record's the borrower's written promise in Notes Receivable.) Generally, the written note specifies the principal amount, the date due, and the interest to be paid.

3) Meaning of accured liability and when business must record it.

Accrued liabilities are liabilities that reflect expenses that have not yet been paid or logged under accounts payable during an accounting period.

For better and fair treatment of books of accounts, it is always expected to show all relevant expense obligation of whom is done.But pending only for payment.

Like Rent is due every month on 10th. So whenever we are at SCO date always enter the 20 days payment as an outstanding or accured liability because it is pertaining to tgis like year itself