Quote (ChronFather420 @ Mar 21 2017 08:54am)
I think they word it so that even though it seems like there are multiple answers, if you refer to GAAP principles, it leaves only one answer. Get you thinking like an accountant.
Or maybe it was just written by an imbecile.
Both are equally plausible in my mind.
Nah the questions are just worded really really poorly. They do try to word them so ambiguously to require a lot of critical thinking, and application of GAAP, but they don't specify things.
There are some really bad examples, but I can't think of them off the top of my head. The most recent (not-so-bad one) is: A company does like 16 different transactions. In 2015 they prepaid for insurance, in 2016 they prepaid for insurance. This company does a range of activities. The prepaid costs of insurance were quite a bit different. It was expected that 2015's prepaid insurance not overlap with 2016's prepaid insurance (application of accrual expensing rules). However, it would've been easy to interpret the prepaid insurance costs as being separate and overlapping. It was easy to figure out what they wanted, but it would've been easy to specify in the question. But that wasn't even that bad.
I'd just prefer if questions were just a tad bit more specific, not in giving away details that I need to apply GAAP and IFRS standards to, but in just providing context about the business that I'm fixing the simplified question-based books for.
Another question referred to the company having "unpaid invoices". It was supposed to be assumed by students that meant the company didn't pay for their own invoices from a supplier. But the company themselves were suppliers, so I thought "unpaid invoices" meant that they had accounts receivable that were outstanding (not accounts payable).
This post was edited by Canadian_Man on Mar 21 2017 09:14pm