. A restaurant has traditionally used the straight line method to depreciate all its heavy duty kitchen equipment. This year it decides to start using the double declining balance depreciation method on the same equipment. This change must be announced in the financial statements due to the _______ principle. Choices: a. Full disclosure principle b. Time period assumption c. Materiality constraint d. Cost Principle e. Revenue recognition principle f. Conservatism Constrain

. A restaurant has traditionally used the straight line method to depreciate all its heavy duty kitchen equipment. This year it decides to start using the double declining balance depreciation method on the same equipment. This change must be announced in the financial statements due to the _______ principle. Choices: a. Full disclosure principle b. Time period assumption c. Materiality constraint d. Cost Principle e. Revenue recognition principle f. Conservatism Constrain

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter6: Accounting Quality

Section: Chapter Questions

Problem 12QE: Financial accounting rules require firms to assess whether they will recover carrying amounts of...

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Question

1. A restaurant has traditionally used the straight line method to depreciate all its heavy duty kitchen equipment. This year it decides to start using the double declining balance depreciation method on the same equipment. This change must be announced in the financial statements due to the _______ principle. Choices: a. Full disclosure principle b. Time period assumption c. Materiality constraint d. Cost Principle e. Revenue recognition principle f. Conservatism Constraint g. Matching principle h. Economic entity assumption i. Monetary unit j. Going concern k. Some other answers

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Answer the following questions: Required: a-1. Find the discussion of Property, Plant, and Equipment and depreciation methods used by Campbell's. Use data from the Campbell Soup Company annual report O Straight-line method O Double declining method O Written down value method a-2. Why the particular method is used for the purpose described. Straight-line depreciation is used for financial reporting purposes because depreciation expense will be lower than under any of the accelerated depreciation methods. O Straight-line depreciation is used for financial reporting purposes because depreciation expense will be higher than under any of the accelerated depreciation methods. a-3. What method do you think the company uses for income tax purposes? O Accelerated depreciation using the MACRS rates is probably used for tax purposes to minimize taxes payable. O Straight line Method using the MACRS rates is probably used for tax purposes to minimize taxes payable. Written down value Method using…
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Q3. Classify the following items as either revenue or capital expenditure: Repairs to a refrigeration system of a meat wholesaler. Repainting of the interior of a bar/restaurant which has greatly improved the potential for finding a buyer for the bar/restaurant as a going concern. Wages paid to employees who worked on the construction of their company’s new office building
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1. State whether each of the below is Capital Expenditure or Revenue Expenditure. Purchase of new delivery vehicle Payment of an invoice for advertising а. b. Costs of clearing the site ready for an extension to the factory building Signwriting on the outside of the new delivery vehicles Redecoration of the office с. d. е. f. Payment of delivery driver's wages g. Fuel for delivery vehicles h. Fitting of shelving in delivery vehicle
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Which of the following would have an effect on the presentation of past years' comparable financial statements? Select one: O a. A component operation of the company is discontinued O b. Revising the estimated life of equipment Oc Correcting an error due to improper revenue recognition O d. Impairment of Goodwill Oe. Using MACRS to compute the depreciation of an asset for tax purposes
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The following expenditures shall be expensed when incurred, except O Payment in advance of delivery of goods or the rendering of services. O Start up costs O Advertising and promotion costs O Business relocation or reorganization costs Which of the following items would qualify as an intangible asset? * College tuition fees paid to employees who decide to enroll in an executive MBA program while working with the company. O Legal costs paid to intellectual property lawyers to register a patent. O Advertising and promotion on the launch of a huge product. Operating losses during the initial stages of the project. Which is not considered a research and development activity? O Design, construction and operation of a pilot plant. O Laboratory research aimed at discovery of new knowledge. O Conceptual formulation and design of possible product or process. O Routine on-going effort to refine, enrich or improve quality of existing product. Which statement is correct concerning the amortization…
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1-Change in fair value of the biological assets between the beginning balance and ending balance should be classified to: a. price change and physical change b. price change and quality change c. price change and quantity change d. quantity change and quality change 2-which of the following would not be measured at fair value less expenses to sell: a. herd of sheep b. wheat and maize C. apples were detached today from the tree d. cheese that was produced from milk cow 3-the basis that we use to prepare the four financial statements is/are: a. cash basis b. both accrual and cash basis c. fund basis d. accrual basis 4-price change and physical changes of fair value must appear respectively in: a. income statement and other comprehensive income b. other comprehensive income and income statement c. income statement and retained earnings statement d. income statement and income statement