Shaving 5% off the estimated direct labor hours in the base for the predetermined overhead rate will falsely produce a high overhead rate‚ which will result in over applied overhead. Thus‚ inflating the cost of goods sold until year end‚ and overstating the inventories. The over applied overhead will be recognized at year end by closing it to cost of goods sold. The adjustment for the over applied overhead will result in a big boost in net operating income at year end.
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Accounting Homework Individual Chapter 7 Question 1&2 1. (a) What are generally accepted accounting principles (GAAP)? In the U.S.‚ generally accepted accounting principles‚ commonly abbreviated as US GAAP or simply GAAP‚ are accounting rules used to prepare‚ present‚ and report financial statements for a wide variety of entities‚ including publicly-traded and privately-held companies‚ non-profit organizations. (b)What bodies provide authoritative support for GAAP
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Re: Food For Thought Objective 1. Determine the total considerations transferred. 2. The land and buildings should be recorded on the premise of “in-use” or “in-exchange”. 3. Determine the fair value recorded for the intangible assets. Applicable accounting pronouncement ASC 805-20-25 Business Combinations-Identifiable assets and liabilities and any non controlling interest-Recognition Recognition Conditions 25-2 To qualify for recognition as part of applying
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transfer ownership and raise funds‚ no personal liability BE 1-2 1. Trying to determine whether the company complied with tax laws. (E) Internal Revenue Service 2. Trying to determine whether the company can pay its obligations. (C) Creditors 3. Trying to determine whether an advertising proposal will be cost-effective. (B) Marketing Manager 4. Trying to determine whether the company’s net income will result in a stock price increase. (A) Investors in common stock 5. Trying to determine whether
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To: Carminho Building Products Ltd From: Rodrigues Accounting Dear Sir/Madam‚ We are submitting herewith our report entitled UK Subsidiary Expansion. The main purpose of this report is to help Carminho Building Products Ltd decide the potential and suitable site for the formation of a public listed subsidiary. This report will include United Kingdom’s current financial reporting environment and other information that Carminho Building Products Ltd would need in order to make a sound decision
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Accounting for non-accounting students eighth edition John R. Dyson ACCOUNTING FOR NON-ACCOUNTING STUDENTS Visit the Accounting for Non-Accounting Students‚ eighth edition Companion Website at www.pearsoned.co.uk/dyson to find valuable student learning material including: G G G G Multiple choice questions to help test your learning Extra question material Links to relevant sites on the web Glossary explaining key terms mentioned in the book We work with leading authors to develop
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Case study on MacCloud Winery Questions 1. Applying the principles of accrual accounting‚ how should Mike treat the expenditures for the land‚ vines‚ vine planting‚ fertilizing‚ water? Be specific regarding the treatment over time‚ including amounts‚ and the rationale for the treatments. Answer: Following the key accrual accounting concepts: Conversation‚ Realization and Matching‚ we think Mike should treat the expenditures as follows: |No. |Item Description |Treatment
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Chapter 3 Adjusting Accounts and Preparing Financial Statements QUESTIONS 1. The cash basis of accounting reports revenues when cash is received while the accrual basis reports revenues when they are earned. The cash basis reports expenses when cash is paid while the accrual basis reports expenses when they are incurred (and matched with revenues they generated). 2. The accrual basis of accounting generally provides a better indication of company performance and financial condition than
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buyer of an automobile. The concepts of information risk for the buyer of an automobile and for the user of financial statements are essentially the same. They are both concerned with the problem of unreliable information being provided. In the case of the auditor‚ the user is concerned about unreliable information being provided in the financial statements. The buyer of an automobile is likely to be concerned about the manufacturer or dealer providing unreliable information. c.) Compare the
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COURSE ACCOUNTING IA CODE CAC 1107 AIM The purpose of the course is to provide an understanding of the basic concepts and techniques of accounting and their application to business management. The course covers the accounting cycle and assumes no prior knowledge of accounting. The course is intended for those who will use accounting information as managers rather than those who will prepare it as accountants. In appreciation of the question of the semantic value of accounting information
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