Problem 1. How does failure to record accrued revenue distort the financial reports? If an annual financial report is in error (distorted) what action should be taken?
Problem 2. What are the major characteristics of plant assets? Are plant assets necessarily confined to a manufacturing plant?
Problem 3. Why is it necessary to make adjusting entries? In your experience what is the most common type of error?
Problem 4. Has there ever been a President who was a CPA? What financial background is most common among our Presidents? Would it be helpful if our Presidents had a working knowledge of accounting and the principles therein?
Problem 5. Of what significance is inventory turnover to a retail store? Are different kinds of inventory subject to different turnover rates? Please cite some examples.
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Problem 6. I am tired of being an accountant and want to become a real estate mogul like "the Donald". I will buy a piece of land and build a 60 story office building on the site. Several ...there is moreshow problemI am tired of being an accountant and want to become a real estate mogul like "the Donald". I will buy a piece of land and build a 60 story office building on the site. Several problems arise. First there is an old gas station on the site which has to be removed. Second, I don't have the cash to purchase so I will borrow during the construction phase and when the complex is complete turn the construction loan into a first mortgage.
You are now my accountant. I want to write off as an expense all the costs associated with this project. This includes the cost of the land, the demolition of the gas station, the payments on the construction loan (both principle and interest) and any real estate taxes incurred during construction.
Please discuss each of the above and tell me why I can or cannot expense all of the above. If I cannot expense some of them today, when can I do so?
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