Over The Years
Over the years, what has the Canadian Institute of Chartered Accountants established?
A standard that all accountants follow In what publication are most of the rules of accounting found? The CICA HandBook
What does GAAP stand for? Generally Accepted Accountant Principals
Explain the business entity concept. Keeping Business and Personal Assets separate
Explain the continuing concern concept. A Business is going to continue to run unless they claim not too
Explain the principle of conservatism.
Accounting should be fair and reasonable
A customer who owes $500 to the business has recently died. The lawyer for the customer’s estate have told the business that there is only one chance in four of the debt being paid.
Should the amount be included on the balance sheet of the business?
No because it is not for sure you will get the money
What GAAP(s) affects this situation? Explain.
Secured Creditiors
A contracting company is involved in a dispute over its bill to a customer. The bill for $500,000 was recently reduced to $400,000 by a decision of the courts. The company is appealing the decision.
Which amount should be recognized on the balance sheet?
Which GAAP(s) affect this situation? Explain.
Six months ago, you closed out your business. Now a person has expressed an interest in acquiring the business. The potential buyer requests a current balance sheet, but you provide her with the one that was prepared just prior to closing.
Will the balance sheet be accepted by the buyer and her accountant?
Which GAAP(s) affect this situation? Explain.
Martha Higgins is currently trying to borrow some money from the bank. She has listed her personal automobile ($25,000) on the business balance sheet to make the statement look more attractive to the banker.
Is this a reasonable thing to do?
Which GAAP(s) affect this situation? Explain.
A standard that all accountants follow In what publication are most of the rules of accounting found? The CICA HandBook
What does GAAP stand for? Generally Accepted Accountant Principals
Explain the business entity concept. Keeping Business and Personal Assets separate
Explain the continuing concern concept. A Business is going to continue to run unless they claim not too
Explain the principle of conservatism.
Accounting should be fair and reasonable
A customer who owes $500 to the business has recently died. The lawyer for the customer’s estate have told the business that there is only one chance in four of the debt being paid.
Should the amount be included on the balance sheet of the business?
No because it is not for sure you will get the money
What GAAP(s) affects this situation? Explain.
Secured Creditiors
A contracting company is involved in a dispute over its bill to a customer. The bill for $500,000 was recently reduced to $400,000 by a decision of the courts. The company is appealing the decision.
Which amount should be recognized on the balance sheet?
Which GAAP(s) affect this situation? Explain.
Six months ago, you closed out your business. Now a person has expressed an interest in acquiring the business. The potential buyer requests a current balance sheet, but you provide her with the one that was prepared just prior to closing.
Will the balance sheet be accepted by the buyer and her accountant?
Which GAAP(s) affect this situation? Explain.
Martha Higgins is currently trying to borrow some money from the bank. She has listed her personal automobile ($25,000) on the business balance sheet to make the statement look more attractive to the banker.
Is this a reasonable thing to do?
Which GAAP(s) affect this situation? Explain.