Answer the following questions in depth .... Why do accountants have to classify items as capital or revenue expenditures? Why do you treat exchanges of similar and dissimilar assets differently? Aren't they all exchanges? Is it true that the higher the depreciation, the lower the net income? If that is the case, why would we not want the lowest depreciation method so we can show the highest net income? Why do we have various methods of depreciation? Isn't that encouraging misleading results?

Q: Which sentence is incorrect? Select one: a. Depreciation is not the actual change in the value of…

A: Depreciation expense is a non-cash expense, which is recorded on the income statement reflecting the…

Q: which metric is used as the profitability metric and explain what it evaluate?

A: Profitability Matric is somewhere helps to analyse the financial performance and financial position…

Q: Which of the following statements is TRUE? 1) The purchase of assets increases income and therefore…

A: Base on the given question we have answered the question

Q: Illustrate the rules and laws that govern asset depreciation and the methods that accountants use to…

A: Any asset cannot last for life and hence its original value reduces because of its use which is…

Q: Which of the following statements regarding economic capital and economic income is incorrect? (i)…

A: e (v) Explanation: e (v) is the incorrect statementEconomic income is the way for companies to…

Q: Which of the following is NOT a characteristic of intangible assets? They are long-term in nature.…

A: Intangible assets  Intangible assets are a type of non-physical assets that have a life of greater…

Q: inherent risk

A: Inherent risk is the risk of errors or frauds that may occur irrespective of the operation of…

Q: What if noncurrent asset is not a subtitle I can chose from? Is there another heading I can use or…

A: The non-current assets means those assets which are not current assets, i.e. they would benefit the…

Q: Which of the following is NOT a way to dispose of an asset? a.Sell it. b.Exchange it for another…

A: solution concept Disposing of the asset                 Discarding a asset means retiring the asset…

Q: Different categories of financial assets are valued differently in the balance sheet.  The different…

A: SOLUTION:- The company needs to look at its balance sheet and identify tangible and intangible…

Q: hat is the amount realized in a transaction? The gain on the sale of an asset The proceeds less the…

A: Capital gain is realized from the sale of fixed assets.

Q: An impairment loss is recorded when capital asset's   1. net book value is higher than the amount it…

A: Impairment loss is excess of carrying amount of assets over its recoverable amount .  Recoverable…

Q: What part of the A=L +SE does expenses and revenues under and are they CR or DR balances? Expenses…

A: The accounting equation shows that sum of all assets= sum of liabilities + sum of owner's…

Q: What is a capital asset?  Why do we care about the treatment of assets as either capital or…

A: Capital assets is an assets which are generally not meant for sale but for investment purpose which…

Q: Discuss the implications of a misstated useful life of a category of capital equipment. What steps…

A: Prior period errors are the errors or omissions or misstatements that occur in one or more previous…

Q: In accounting, we usually use historical cost (i.e. original price) on the balance sheet. However,…

A: Investment in equity securities is the current or non-current investment made by the firm in the…

Q: Which of the following capital losses can be used to offset a capital gain made from the sale of an…

A: Losses incurred as a result of the sale of a personal dwelling are not deductible.

Q: The key difference between amortization and depreciation is that amortization charges off the cost…

A: In this question, we are required to determine the key difference between depreciation and…

Q: So on one hand we have Depreciation Expense. On the other, we have Accumulated Depreciation.…

A: Depreciation is the amount of value of fixed assets which occurs due to use of an assets over a…

Q: Explain why the value of an asset is its current market value and not what you paid for it? Why is…

A: There are two methods for valuing anything. The first method is the historical cost method.…

Q: What is the common characteristic of all the assets owned by a company? A. Intangible B. Long Life…

A: Assets are resources owned by a company that hold economic value and are expected to provide future…

Q: What is the real return?   Multiple Choice   The after-tax return on assets.   The pre-tax return…

A: Rate of return is the percentage of profit that is earned on an investment.

Q: Record the entry to adjust asset values to fair value.

A: In this problem assets are revalued at a gain.  So the gain i.e difference…

Q: Why aren't they fully expensed at the time they are purchased?

A: Assets : - Assets are classified into two types.  1. Fixed assets  2. Current assets Depending on…

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.