lets review the job and process costing sytems: Job order cost system: • Jobs are assigned to each job or batch • A job may be for a specific order of inventory Process cost system : • This cost system is generally used when a large volume of similar products are manufactured Answers: a. A custom yacht builder – job order costing b. A golf course designer – job order costing c. A potato chip manufacturer – process costing d. A business
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Accounting Alternatives Case At the beginning of the year 20x1‚ two companies began operations to sell home heating units. Eads Heaters Inc. is located in Eads‚ Colorado‚ and Glenwood Heating Inc. is in Glenwood Springs‚ Colorado. The companies operate under similar economic conditions and have identical operations during the year. However‚ each manager makes different accounting choices and estimates when applying generally accepted accounting principles (GAAP) in preparing the company’s financial
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Chapter 2 Worldwide accounting diversity Chapter Outline I. Considerable differences exist across countries in the accounting treatment of many items. These differences can result in significantly different amounts being reported in the financial statements prepared by companies using different GAAP. II. A variety of factors influence a country’s accounting system. A. Legal system – in code law countries‚ accounting rules tend to be legislated; common law countries tend to have
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The Lucent Accounting Scandal Abstract The case discusses the accounting frauds committed at the US-based telecommunications giant‚ Lucent Technologies Inc. (Lucent) during early 2000. It provides an insight into the ways by which the financial statements were manipulated at Lucent. It examines the loopholes in the financial management of the company and the price it had to pay for circumventing the provisions of law. The case examines the allegations against Lucent and its officers with reference
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NATURE AND SCOPE OF ACCOUNTING TERMINOLOGIES As an introduction to the course in accounting‚ it may be useful to define the following terms : - Accounts : These are the financial records in the organization. Every business transaction‚ or accounting entity‚ may be represented in an account by itself‚ e.g. wages‚ telephone expense‚ motor vehicle‚ Cash at bank‚ Investment - Book-keeping : This is the recording of the financial transactions of a business
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Accounting decisions Case: Accounting at MacCloud winery Methodological note We want to distinguish between Economic “facts/data” – No need to discuss them – Taken for granted Accounting “issues” – The topic of our discussion – We will follow the order of the case questions Accounting at McCloud Winery The MacCloud winery 5 acres of land One building Accounting at McCloud Winery 1: The building Worth $32‚000 Leased for 10 years for $5‚000 per year How
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Financial Accounting and Reporting Case: America Online 1. What accounting approach has AOL used in the past that it is now changing (related to the $385 million)? AOL‚ prior to October 1‚ 1996‚ recorded the expenditure related to subscribers acquisitions as an asset and amortized monthly over a period < 24 months. This was a strongly criticized approach. Furthermore‚ the accounting approach in the article is considered aggressive. In October 1996‚ they discontinued capitalizing customer acquisition
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share some similarities in their accounting systems. Being strongly influenced by the individualism culture‚ both countries exercise a high level of professionalism among accountants. There is a common tendency to follow accounting standards bodies in both countries. In the UK this would be the Accounting Standards Board (ASB) which helps to set the Financial Reporting standards (FRS) used in the UK‚ whereas in the Netherlands the Dutch Generally Accepted Accounting Polices (GAAP) are provided by the
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Chapter 02 Student Revision Quiz 1. According to Australian Accounting Standards (AAS)‚ assets are carried on the financial statements at the higher of current market value or historical cost. | True | | False | The Australian Accounting Standards state the assets are to be ’carried on the books ’ (recorded) at what the firm paid for them. 2. Suppose KLM Inc. just received a patent on a new anti-cholesterol drug. This patent is an intangible fixed asset. | True | | False |
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EXERCISE 3-3 (1) Determination and Distribution of Excess Schedule Company Parent NCI Implied Price Value Fair Value (80%) (20%) Fair value of subsidiary $340‚000* $272‚000 $ 68‚000 Less book value of interest acquired: Common stock ($10 par) $100‚000 Retained earnings 150‚000 Total equity $250‚000 $250‚000 $250‚000 Interest acquired 80% 20% Book value $200‚000 $ 50‚000 Excess of fair value over book value $ 90‚000 $ 72‚000 $ 18‚000 Adjustment
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