UGBA 102A Study Guide - Final Guide: Income Tax, Asset Turnover, Net Income
9 Sep 2019
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Homework 4: page 195 q 1,3; page 196 mc 3, 7; page 209 e4-19. The purpose of recording adjusting entries is to to update accounts to conform with the accrual concept by make adjustments at the end of the accounting period to measure all revenues and expenses of that period. A contra-asset is an account that is an offset to, or reduction of, the primary account. An example of one is accumulated depreciation of an asset. Interest payable: telephone expenses, depreciation expense, interest expense, maintenance expenses, no entry required. Revenue is earned in january of next year; entry in upcoming period: income tax expense. Earnings per share = net income average outstanding common shares. Total asset turnover ratio = net sales average total assets. Total asset turnover ratio is 1. 77, suggesting that the company a dollar of assets generates 1. 77 dollars of sales.
