Case 10-2 1. Ida needs to test the U.S. commercial building for recoverability under both U.S. GAAP and IFRSs. Recoverability test is one of the requirement tests for impairment. As a result‚ we need to verify if impairment should be recognized. 2. The impairement is $600‚000. GAAP methodology of determining impairment uses a two-step recoverability test. Step one‚ requires a company to estimate the future undiscounted cash flows expected from the use of that asset and its eventual disposition
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Problem 1: You are the Senior Accountant for the Patty Corporation which has several divisions. They each keep their own accounting books and have chosen the appropriate method of revenue recognition based on their operations. | | | | Pat’s Electronics Division | | | | | Pat’s Electronics Division sells computers through agents in various cities. Agents send orders and down payments to our company. The division then ships the goods F.O.B. shipping point directly to
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not-for-profit organizations can operate at an accounting profit but still be considered a not-for-profit organization? Over the year’‚ not-for-profit organizations have had many changes in rules and regulations set forth for not-for-profit organizations to abide by. There are three major financial statements involved with not-for-profit organizations and one voluntary financial statement‚ plus four key governmental and federal agencies involved with not-for-profit accounting. There are some key differences between
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weaknesses‚ the cost principle is most often used because it is the most reliable basis of valuation. TRUE 2. The going concern assumption assumes the company will continue to operate for at least two years. TRUE 3. The economic entity assumption states that economic events can be identified with a particular unit of accountability. FALSE 4. The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records. TRUE
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Overview of government accounting Government accounting Government accounting refers to the different accounting systems that the different entities in the public sector use. Government Accounting Standards Board (GASB) set the accounting standards to be used by the state and local government. The role of the Governmental Accounting Standards Board (GASB) is to set up and improve the accounting standards of state and local government. It also ensures that financial reporting gives accurate and
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role accounting and financial information plays for a business and for its stakeholders. I. THE ROLE OF ACCOUNTING INFORMATION A. Financial information is the HEARTBEAT OF COMPETITIVE BUSINESS MANAGEMENT. 1. You have to know something about accounting if you want to understand business. 2. You need to learn basic accounting terms and understand basics of how accounts are kept. 3. To run a business effectively you need to be able to read‚ understand‚ and analyze accounting reports
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* Write an essay in 250 to 300 words‚ Include the following: * The basic assumption of accounting * The constraints of accounting * A conclusion stating how you think sound financial reporting depends on principles‚ assumptions‚ and constraints. Refer to the U.S. GAAP in your response. The basic assumptions of accounting = separate entity assumption- finances from the company finance so that they don’t get intertwined with the owner or shareholders finance. Going concern assumption=
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There is no generally accepted theory of accounting. There are a number of accounting theories (though a systematic attempt has been made by Financial Accounting Board (FASB) of USA and IASC and other to formulate a comprehensive theory of accounting). The definition of Accounting Theory given by Hendriksen as “a set of broad principles that (i) provide a general frame of reference by which accounting practice can be evaluated‚ and (ii) guide the development of new practices and procedures” lead
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Accountants Correspondence: Andy Wynne Technical Department ACCA 29 Lincoln’s Inn Fields London WC2A 3EE e-mail: a.wynne@accaglobal.com tel: +44 207 396 5778 Abstract • IFAC Public Sector Committee issued their standard on the cash basis of accounting and the ASB (UK) issued its draft interpretation for public benefit entities (not-for-profit organisations) earlier this year. In each case the private sector model of accounts was followed closely. • What is the experience in the UK of producing
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Budget and Responsibility Accounting Budget Meaning Budget is a financial and/or quantitative statement‚ prepared and approved prior to a defined period of time‚ of the policy to be pursued during that period for the purpose of attaining a given objective. * CIMA Official Terminology It is a plan quantified in monetary terms‚ prepared and approved prior to a defined period of time‚ usually showing planned income to be generated and/or expenditure to be incurred during that period
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