Reference no: EM132789569

Problem 1: An end-of-period adjustment involves

a. a change in an account balance that is neither an accrual or a deferral.

b. a recognition of the extra cash flows related to the year-end delivery of goods and services.

C. an adjustment that results in revenues or expenses being reported in a different time period from the associated cash flows.

d. an exchange of resources between two departments in an organization.

Problem 2: Based on 2019 sales of music recorded by an artist under a contract with Therese IndieMusic, the artist earned P200,000 after an adjustment of P16,000 for anticipated returns. In addition, There is paid the artist P150,000 in 2019 as a reasonable estimate of the amount recoverable from future royalties to be earned by the artists. What amount should Therese report in its 2019 income statement as royalty expense?

a. P200,000

b. P216,000

C. P350,000

d. P366,000