CHAPTER 1 FInANCIAL ACCOUNTING AND ITS ECONOMIC CONTEXT ISSUES FOR DISCUSSION ID1–1 Security analysts and stockholders: These users would use financial statements to try to estimate the future earnings and cash flow potential of the company‚ which would be used to project a value for the company’s stock. Bank loan officers: These users would use the financial statements to determine the ability of a company to repay loans to the bank. A company’s
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used creative accounting to portray that the company’s profit were increasing when it fact it was making losses during the period 2000 – 2002 Creative accounting can be refers to accounting practices that seem to follow the applicable accounting standards but differ from the essence of those standards. It use the accounting methods to hide some elements of company’s financial dealings in order to make the company appears more successful that it is in reality. Creative accounting also can be describe
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Since the Secure Bank and Big Oil has been working together for two years through phone calls and e-mails. Secure Bank decided their senior executive would carry out the deal to closure. Julie is a female; and highly recommended with her knowledge and involvement with the oil field and oil product department with several companies. Saudi Arabia being behind where diversity is concerned and caught by surprise that they would be answering to a female executive; Julie should have been involved with
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1. The R&D department is planning to bid on a large project for the development of a new communication system for commercial planes. The accompanying table shows the activities‚ times‚ and sequences required: |Activity |Immediate Predecessor |Time (weeks) | |A |- |3 | |B |A |2
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ACTG2010 Exam-AID session. It is intended for students enrolled in any section of Introduction to Financial Accounting – ACTG2010 course who are looking for an additional resource to assist their studies in preparation for the exam. References Friedlan‚ John. Financial Accounting: A Critical Approach. Toronto: McGraw-Hill Ryerson‚ 2010. Print. Richardson‚ Alan J. Cases in Financial Accounting: A Principles-based Approach. Toronto‚ ON: Nelson‚ 2007. Print. Contents Chapter 1: page 2 Chapter
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THE DEVELOPMENT OF ACCOUNTING THEORY a. Explain the meaning of the term accounting principles as used in the audit report. (Do not in this part discuss the significance of generally accepted.”) Answer: Before I dissect the term “accounting principle‚” I first want to provide a brief definition of (1) accounting and (2) a principle. Accounting is the systematic recording‚ reporting‚ and analysis of financial transactions of a business and a principle is a rule or ethical standard. The definition
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198 Accounting Standard (AS) 14 (issued 1994) Accounting for Amalgamations Contents INTRODUCTION Definitions EXPLANATION Types of Amalgamations Methods of Accounting for Amalgamations The Pooling of Interests Method The Purchase Method Consideration Treatment of Reserves on Amalgamation Treatment of Goodwill Arising on Amalgamation Balance of Profit and Loss Account Treatment of Reserves Specified in A Scheme of Amalgamation Disclosure Amalgamation after the Balance Sheet Date ACCOUNTING STANDARD
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CASES Real World Case 5-1 Requirement 1 A bill and hold strategy accelerates the recognition of revenue. In this case‚ sales that would normally have occurred in 1998 were recorded in 1997. Assuming a positive gross profit on these sales‚ earnings in 1997 is inflated. Requirement 2 A customer would probably not be expected to pay for goods purchased using this bill and hold strategy until the goods were actually received. Receivables would therefore increase. Requirement 3 Sales that would
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role of Management Accounting Managerial accounting is the process of identifying‚ measuring‚ analyzing‚ interpreting‚ and communicating information in pursuit of an organization’s goals. Managerial accounting is an integral part of the management process‚ and managerial accountants are important strategic partners in an organization’s management team. The relation between accounting and management has been commonly expressed by the phrase‚ “Accounting is a tool of management”. Accounting practice
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The Importance of Accounting Theory to the Field Of Accounting The objective of theory is to explain and predict. One of the basic goals of the theory of a particular discipline is to have a well-defined body of knowledge that has been systematically accumulated‚ organized‚ and verified well enough to provide a frame of reference for future actions. The Webster’s definition of theory is the systematically organized knowledge‚ applicable in a relatively wide variety of circumstances‚ a system
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