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can someone please help me solve the questions on the bottom!!! Several years ago your brother opened Magna Appliance Repairs. He made a small inital
can someone please help me solve the questions on the bottom!!!
Several years ago your brother opened Magna Appliance Repairs. He made a small inital investment and added money fron his personal bank acoount as needed. He withdrew money for living expenses at irregular intervals. As tha business grew he hired an assistant. He is now considening adding more empioyees, purchasing additional service rucks, and purchasing the building he now rents. To secure funds for the expansion, your brother submitted Ioan appication to the bank and included the most recent financial statements (which follow) prepared from accounts maintained by a part-time bookkeeper. Magna Appliance Repairs Balancesheet October 31,20 r9 After reviewing the financial statements, the loan officer at the bank asked your brother if he used the accrual basis of accounting for revenues and expenses. Your brother responded that he did and that is why he included an account for 'Amounts Due from Customers.'The loan officer then asked whether or not the accounts were adjusted prior to the preparation of the statements: Your brother answered that they had not been adiusted. Discussion Questions: Why do you think the loan oflicer suspected that the accounts had not beeri actusted prior to the preparation of the statements? - Indicate possible accounts that might need to be adjusted bofore an accirater set of ninancial statements could ba prepared Step by Step Solution
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