Chapter 1 - In-Class Problems

general accounting problem please solve it

Which of the following is the primary objective of financial accounting?

a. What do the accounting policies say in the annual report (footnotes) regarding the cost of revenue? What are the drivers to the cost of revenue and the trends? b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business? c. Compare general and administrative expenses to similar companies. Are they reasonable? d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?

Which of the following is the primary objective of financial accounting? a) To ensure that a company pays the correct amount of tax b) To provide useful financial information to external users c) To control the company's day-to-day operations d) To help the company minimize its costs

IDENTIFICATION: Identify what branch of accounting renders the service/s being described:

Question 13 Match the following external users of financial accounting information with the type of decision that user will make with the information 1. Creditor 2. Investor 3. Regulatory Agency 4. Federal Tax Authority Is the company operating within prescribed guidelines? Is the company able to pay its debts? Is the company a good investment? Is the company complying with tax laws? A. 1 B. 3 C.2 D.4

Accounting Theorycal Question

Match each concept with the definition that best describes it. Expense recognition principle (matching [ Choose] principle) [ Choose ] Accounting basis in which companies record transactions that change a company's financial statements in the periods in which the events occur. Accounting basis in which companies record revenue when they receive cash and an expense when they pay out cash. The principle that companies recognize revenue in the accounting period in which the performance obligation is satisfied. Information that accurately depicts what really happened. The principle that companies recognize expense in the period in which they make efforts (consume assets or incur liabilities) to generate revenue. An assumption that accountants can divide the economic life of a business into artificial time periods. Monthly or quarterly accounting time periods. An accounting period that extends from January 1 to December 31. Revenue recognition principle Time period assumption Calendar year…

Why is the income tax payable not the same as income tax expense?  Why is the income tax expense shown in the income statement same as the income tax paid shown in the cash flow statement? Briefly explain the concepts of temporary difference and permanent difference. Identify any permanent differences that company may have. What do you find interesting, confusing, surprising or difficult to understand about the treatment of taxin your firm’s financial statements? What new insights, if any, have you gained about how companiesaccount for income tax as a result of examining your firm’s tax expense in its accounts?

Case Study: Accounting

Choose the appropriate letter to match the term and the definition. match these Question 2 options:   Income Statement   Unit of Measure Assumption   Financing Activities   Retained Earnings   Investors   Operating Activities   Audit   Balance Sheet   1. An example of external users of financial statements. 2. A procedure by which independent evaluators assess the accounting procedures and financial reports of a company. 3. A financial statement showing a company's assets, liabilities and stockholders equity. 4. Activities directly related to running the business to earn profit. 5. The idea that a company should report its financial data in the relevant currency. 6. The cumulative total amount of profits that have been kept by the company. 7. Transactions with lenders (borrowing and repaying cash) and…

Financial Accounting Case study Question

Accountant’s Report:   Who are the independent CPA’s? What kind of opinion did they express? Should this opinion increase the reliability of the financial statements? Why? Income (Operations) Statement:    Is this a comparative statement? Is this a consolidated statement? What is the profit margin percentage? What is the effective income tax rate? Are there any discontinued operations, extraordinary items, or cumulative effective changes in accounting principles (if so, what are they)? Which earnings per share (EPS) are reported (descriptions and amounts)? Are there any unusual items? Balance Sheet:    Determine the categories of plant assets. (hint: refer to the footnotes) Are there any unpaid or deferred income tax liabilities? How many classes of capital stock are shown? How many classes have been issued? Does the stock(s) sell at or above par or stated value? What percent of total assets is provided by stockholders’ equity? What percent of stockholders’ equity is represented…

Objective Question: What is a crucial step in the tax return process for businesses that involves identifying eligible expenses and activities to optimize their tax liability? Data collection and organization Compliance with tax laws Depreciation and amortization Strategic tax planning

An identifiable part of the company for which financial information is available is called __________.     ANSWER       a business segment   the contribution margin   the gross profit   the profitability analysis   I DON'T KNOW YET

Requirement Referring to the qualitative characteristics of accounting information, indicate the fundamental characteristic (relevance or representationally faithful) and its related attribute (confirmatory value, completeness, materiality, neutrality, or predictive value) for each of the following uses of accounting information. Use of Accounting Information This year's reported earnings per share is a. $.50 below analysts' forecasts Potential creditors review a company's long- term liabilities footnote to determine that b. entity's ability to assume additional debt. A corporation discloses both favorable and unfavorable tax settlements. C. A company discloses the write-off of an accounts receivable. The receivable due from a major customer accounts for 35% of the d. company's current assets. A financial analyst computes a company's five-year average cost of goods sold in order e. to forecast next year's profit margin. ***** Fundamental Characteristic Attribute

Subject: acounting

Part AThe corporate disclosure practice will help all the stakeholders to understand and measure businessoperation. Annual financial statement and particularly income statement is one of the most important ones.However, a company's reported profits will be impacted by different factors, including when particulartransactions and events are recognised and how such transactions and events are measured.Requirement:1) Using earning management concept, discuss why the timing of recognising events that impactincome, revenue or profit or expenses are important for managers?"Maximum 1000 words."Part BABC Ltd has incorporated a bonus plan that rewards the board of directors (executive members) by providinga bonus of 3 per cent of reported profits. This is an Accounting-based incentive that has the advantage whichthe accounting results may be based on subunit or divisional performance."A well-informed labour market will motivate management to work to maximise the value of its…

Evaluate the role of the going concern assumption in shaping the presentation and valuation of a company's assets and liabilities. Consider the implications of this principle for businesses experiencing financial distress or undergoing significant organizational changes. (ACCOUNTING THEORETICAL QUESTION)