+0)26-4 Accounting Theory NEED FOR ACCOUNTING Business is one of the sources of earning income. Whenever a business is started‚ it requires investment of certain amount which is called as capital. With this amount of capital the businessman may deal either with trading business or manufacturing business. In a trading business‚ he will buy goods at a lesser price and sells the same to others at a higher price. In case of manufacturing business‚ he has to buy raw materials and incur other
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Accounting Theory There is always a reason behind each and every action of a human being. A man does not anything without any sound reason. Regarding Finance‚ or financial matters‚ a man is always extra cautious and so‚ he never makes any financial transaction without any reason. As accounting deals with financial transactions‚ so every accounting work is also based on reasoning. Accounting Theories always try to explain with reason‚ the logic underlying a particular practice. Generally Accepted
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Module 1: Accounting under ideal conditions Ideal conditions; certainty and uncertainty (including differences & similarities)‚ dividend irrelevancy‚ arbitrage‚ accretion of discount‚ abnormal earnings RRA - SFAS69; weaknesses of RRA (relevant but not as reliable) Historical Accounting Revisited mixed measurement model‚ (relatively reliable but lacks relevance)‚ revenue recognition‚ recognition lag Relevance VS Reliability -> tradeoffs (Without ideal conditions‚ complete relevance &
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of an organized system to replace the existing hodgepodge of record-keeping. QUESTION 2 Islamic accounting can be defined as the “accounting process” which provides appropriates information (not necessarily limited to financial data) to stakeholders of entity which will enable them to ensure that the entity is continuously operating within Islamic Sharia’ ah while “conventional” accounting can be defined to be the identification‚ recording‚ classification‚ interpreting and communications economic
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Scoring level | The depth and quality of the research undertaken by you | The application of the research to the WIL task | The ability to apply appropriate accounting theories to the context of the task | The ability to synthesise information into a coherent and engaging report | The ability to correctly acknowledge sources using the Harvard Referencing system | Score | | 8 marks | 6 marks | 6 marks | 6 marks | 4 marks | | 4- AccomplishedHigh Distinction | * Materials referred to are
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St Joseph Campus Capitol Hill‚ Monrovia Liberia Accounting 401 Section 01 Accounting Theory Assignment #2 To: Mr. Oye Williams By: Fatima E. Manyeh 07436 March 6‚ 2014 1) BDO Seidman’s attorney pointed out correctly that professional standards do not prohibit auditors and client personnel from being ‘friends’. At what point does such relationship result in violation of the auditor independence rules and guidelines? Provide hypothetical examples to strengthen your answers. Health
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the society. In this report‚ it will use Legitimacy theory to explain BP’s response to this event. Legitimacy theory can be treated as a explanation for voluntary corporate disclosures in annual report. As (Dowling&Pfeffer‚ 1975) says a corporation must act in congruence with norms and society value. First of all‚ Legitimacy theory is based on the concept of substantive rationality and replies upon the notion of a social contract. This theory asserts that organizations seek to ensure that they
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achieving future cash flows. Limitations * Companies omit items that cannot be measured reliably. * Income is affected by the accounting methods employed. * Income measurement involves judgment. Earnings Quality Companies have incentives to manage income to
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earnings quality since net income does not representatively portray the economic performance of the business entity for the period. Income smoothing relies not on falsehoods and distortions but on the wide leeway existing in alternatively accepted accounting principles and their interpretations. It is conducted within the structure of gaap. In effect‚ it redistributes income statement credits and charges among periods. The prime objective is to moderate income variability over the years by shifting
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3101AFE ACCOUNTING THEORY AND PRACTICE TUTORIAL 1 - Semester 2 2014 Deegan Topic 1: Introduction to financial accounting theory QUESTION 1 - Question 1.8: What is the difference between developing a theory by induction and developing a theory by deduction? As explained in this chapter‚ theory that is developed through induction is developed as a result of undertaking a series of observations of particular events‚ and on the basis of these observations‚ a theory is developed. Early
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