Definition	Term
A.	Report the long life of a company in shorter periods.	not attempted
B.	Record expenses when incurred in earning revenue.	not attempted
C.	The time it takes to purchase goods or services from suppliers, sell goods or services to customers, and collect cash from customers.	not attempted
D.	Record revenues when earned and expenses when incurred.	not attempted
E.	Increases in assets or decreases in liabilities from peripheral transactions.	not attempted
F.	An asset account used to record cash paid before expenses have been incurred.	not attempted
G.	Record revenues when earned and measurable (when the company transfers promised goods or services to customers, and in the amount the company expects to receive).	not attempted
H.	Decreases in assets or increases in liabilities from peripheral transactions.	not attempted
I.	Record revenues when received and expenses when paid.	not attempted
J.	The income statement equation.	not attempted
K.	Decreases in assets or increases in liabilities from central ongoing operations.	not attempted
L.	The retained earnings equation.	not attempted
M.	A liability account used to record cash received before revenues have been earned.

• Accrual basis accounting
• Cash basis accounting
• Ending Retained Earnings = Beginning Retained Earnings + Net Income Dividends Declared
• Expenses
• Gains
• Operating cycle
• Prepaid expenses
• Revenue recognition principle
• Revenues Expenses = Net Income
• Unearned revenue
• None of these are correct

2.

Revenues are normally recognized when the company transfers promised goods or services in the amount the company expects to be entitled to receive. The amount recorded is the cash-equivalent sales price. Assume that the following transactions occurred in September:

1. A popular ski magazine company receives a total of $12,345 today from subscribers. The subscriptions begin in the next fiscal year. Answer from the magazine company's standpoint.
2. On September 1 of the current year, a bank lends $15,000 to a company; the note principal and $1,500 ($15,000 10 percent) annual interest are due in one year. Answer from the bank's standpoint.
3. Fucillo Automotive Group (offering a wide variety of car and truck brands) sells a Ford F-150 truck with a list, or sticker, price of $34,050 for $32,000 cash.
4. Macy's department store orders 1,000 men's shirts for $16 each for future delivery from PVH Corp., manufacturer of IZOD, ARROW, Van Heusen, Calvin Klein, and Tommy Hilfiger and other brand-name apparel. The terms require payment in full within 30 days of delivery. Answer from PVH Corp.'s standpoint.
5. PVH Corp. completes production of the shirts described in (d) and delivers the order. Answer from PVH's standpoint.
6. PVH Corp. receives payment from Macy's for the events described in (d) and (e). Answer from PVH's standpoint.
7. A customer purchases a ticket from American Airlines for $780 cash to travel the following January. Answer from American Airlines's standpoint.
8. Ford Motor Company issues $15 million in new common stock.
9. Michigan State University receives $70,000,000 cash for 50,000 seven-game season football tickets to be played in the upcoming season.
10. Michigan State plays the first football game referred to in (i).
11. Precision Builders signs a contract with a customer for the construction of a new $1,500,000 warehouse. At the signing, Precision receives a check for $200,000 as a deposit on the future construction. Answer from Precision's standpoint.
12. Best Buy receives inventory of 100 laptop computers from Dell; Best Buy promises to pay $96,000 within three months. Answer from Dell's standpoint.
13. Amazon.com delivers a $300 lamp to a customer who charges the purchase on his Amazon.com Store Card. Answer from Amazons standpoint.

Required:

For each of the transactions, if revenue is to be recognized in September, indicate the revenue account title and amount. (If revenue is not recognized choose "None".)

3.

Revenues are normally recognized when a company transfers promised goods or services to customers in the amount the company expects to be entitled to receive. Expense recognition is guided by an attempt to match the costs associated with the generation of those revenues to the same time period. Assume that the following transactions occurred in January:

1. McGraw-Hill Education uses $3,800 worth of electricity and natural gas in its headquarters building for which it has not yet been billed.
2. At the beginning of January, Turner Construction Company pays $963 for magazine advertising to run in monthly publications each of the first three months of the year.
3. Dell pays its computer service technicians $403,000 in salaries for the two weeks ended January 7. Answer from Dell's standpoint.
4. The University of Florida orders 60,000 football tickets from its printer and pays $8,340 in advance for the custom printing. The first game will be played in September. Answer from the university's standpoint.
5. The campus bookstore receives 500 accounting texts at a cost of $210 each. The terms indicate that payment is due within 30 days of delivery.
6. During the last week of January, the campus bookstore sold 400 accounting texts received in (e) at a sales price of $280 each.
7. Fucillo Automotive Group pays its salespersons $63,800 in commissions related to December automobile sales. Answer from Fucillo's standpoint.
8. On January 31, Fucillo Automotive Group determines that it will pay its salespersons $55,560 in commissions related to January sales. The payment will be made in early February. Answer from Fucillo's standpoint.
9. A new grill is received and installed at a Wendy's restaurant at the end of the day on January 31; a $12,750 cash payment is made on that day to the grill supply company. Answer from Wendys standpoint.
10. Mall of America (in Bloomington, MN) had janitorial supplies costing $3,500 in storage. An additional $2,600 worth of supplies was purchased during January. At the end of January, $1,400 worth of janitorial supplies remained in storage.
11. An Iowa State University employee works eight hours, at $23 per hour, on January 31; however, payday is not until February 3. Answer from the university's point of view.
12. Wang Company paid $4,800 for a fire insurance policy on January 1. The policy covers 12 months beginning on January 1. Answer from Wang's point of view.
13. Derek Incorporated has its delivery van repaired in January for $600 and charges the amount on account.
14. Hass Company, a farm equipment company, receives its phone bill at the end of January for $154 for January calls. The bill has not been paid to date.
15. Martin Company receives and pays in January a $2,034 invoice (bill) from a consulting firm for services received in January. Answer from Martin's standpoint.
16. Parillo's Taxi Company pays a $595 invoice from a consulting firm for services received and recorded in December.
17. PVH Corp., manufacturer of IZOD, ARROW, Van Heusen, Calvin Klein, and Tommy Hilfiger apparel among other brands, completes production of 450 men's shirts ordered by Macy's department stores at a cost of $16 each and delivers the order in January. Answer from PVH Corp.'s standpoint.

Required:

For each of the transactions, if an expense is to be recognized in January, indicate the expense account title and the amount. (If expense is not recognized choose "None".)