Explain and evaluate the effects of capitalizing versus expensing costs in the period in which they are incurred on financial statements and ratios.

Q: What are the measurement alternatives involved with using ROA as a performance measure? For example,…

A: The return on asset is the financial ratio that is used by the company in order to analyse how…

Q: Which of the following is an input method for recognizing revenue over time?

A: Cost to Cost Method While recognizing the revenue in the contract work there are different method…

Q: Gain contingencies are usually recognized in the income statement when: a. realized…

A: Introduction: Contingency relates to the actual situation in which there is a chance of making or…

Q: Explain and evaluate the eff ects on financial statements and ratios of capitalizing versusexpensing…

A: Capitalizing Costs: When any cost is incurred with respect to any asset which will provide long-term…

Q: What element should be assessed when considering the quality of profit and loss and balance sheet.

A: The elements are as follows: Leverage is a measurement of the business's ability to meet long-term…

Q: how the cost of capital serves as a screening tool when dealing with the net present value method…

A: Answer with explanation are as follows. cost of capital - cost of capital is a expected rate of…

Q: What are the three main profitability ratios, and howis each calculated?

A: Ratio analysis is the method of checking the company's operational efficiency, liquidity, and…

Q: How is a financial ratio analysis performed? Comparing two items in financial statements. Evaluating…

A: Performing a financial ratio analysis involves examining and interpreting various ratios derived…

Q: Advantage and disadvantages of ratios in analyzing financial performance

A: Ratio Analysis is the financial analysis technique which is used to analyse the financial condition…

Q: What is the possible link between the following ratios: (a) profitability and efficiency (b)…

A: SOLUTION A- Relation between profitability and efficiency ratios   Profitability ratio depicts how…

Q: What does the accrual-accounting model measures?

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: Discuss each group of ratio’s relationship to the balance sheet and income statement. Liquidity…

A: Ratio Analysis is a quantitative tool or method used for gaining insights into a company's…

Q: explain financial ratios and financial cycle

A: Financial ratios are designed using the numerical values taken from financial statements to obtain…

Q: Identify the major types of financial ratios and what they measure.

A: Accounting ratios are calculated to measure the liquidity, solvency, and profitability of the…

Q: Quick assets divided by current liabilities is the: Select one: a.Current ratio. b.Working capital…

A: Quick assets are the highly liquid assets that include all the current assets except inventory and…

Q: If a company capitalizes costs that should be expensed, how is its income statement for the…

A: A capitalized cost seems to be an element that is added to the cost structure of a fixed asset on a…

Q: comparison of financial performance with one period to another period is possible this is as

A: The accounting info provided by the money statements would be helpful in drawing conclusions…

Q: Provide factor analysis: influence of the factors (Current Assets and Current Assets Turnover on…

A: Current ratio is a ratio which specifies about the ability of the company to pay-off their current…

Q: Define net income and explain its computation.

A: Net income is the amount of income which is left over revenue after all the expenses have been…

Q: Question: What is the formula for calculating the net profit margin? a. Net Profit / Revenue b.…

A: The income statement is prepared to record the revenue and expense of the current period. The income…

Q: compare the current rate method and the temporal method, evaluate how each aff ects theparent…

A: Under the current rate method, assets and liabilities are translated at the current exchange rate,…

Q: Explain why the comparison of financial ratios may be more meaningful than the comparison of figures…

A: Financial analysis is a crucial aspect of decision-making for investors, creditors, and company…

Q: which ratio is of greater interest to the owner-manager, the rate of return on total assets or the…

A: The ratio refers to the measure that determines the relation between two numbers. In accounting, the…

Q: Why is it important to use ratios to analyze financial statements?

A: Financial statements are those records which are prepared by businesses to convey activities related…

Q: Explain an example how to calculate accounting rate of return.

A: The accounting rate of return (ARR) is the percentage rate of return expected on investment or asset…

Q: Choose a financial ratio, describe what financial statement each variable in the ratio comes from,…

A: A financial ratio is a quantitative measure used to analyze and assess various aspects of a…

Q: how value drivers (Return on Equity, Net Profit Margin, and Total Asset Turnover) are related to…

A: Financial statements: Financial statements are the summary of transactions presented in the form of…

Q: What is the difference between a cash basis and an accrual basis measure of performance?

A: Cash Basis :- It is an Accounting Method where Revenue and Expense are identify at the time of…

Q: facilitates the comparison of financial noriod t moth

A: Option a is wrong because historical cost concept suggests to record of assets and liabilities at…

Q: Net net profit is computed in the

A: Net profit in computed in the Income statement or profit and loss statement .  The format of the…

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.