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

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: Dividing quick assets by current liabilities is the calculation for the a.ratio of liabilities to…

A: Ratio analysis is a method of measuring the financial position of the organization with different…

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 financial ratio is predominantly used to determine profitability?

A: Return on Investment: Return on Investment (ROI) is a performance measuring ratio utilized to assess…

Q: When analyzing financial statements, creditors are more concerned with which of the following? a.…

A: Financial statement analysis: The process of analyzing the financial statements of a company to…

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: w is the use of financial statement ratio

A: Financial ratios are computed by averaging numerical values 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: What are some possible financial decisions in which using the Number of Periods (NPER)  formula…

A: NPER is a financial formula or function of excel that signifies the length of term of an investment.…

Q: Computing liquidity, working captial and current ratio. Computing measures of profitability, profit…

A: Liquidity ratios emphasizes on the company’s ability to fulfill the current obligations out of the…

Q: What is “benchmarking” and how is it used in financial ratio analysis? Provide an example.

A: Benchmarking is a process used in financial ratio analysis to compare a company's performance and…

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: 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: Match the ratio to the building block of financial statement analysis to which it best relates.A.…

A: Times interest earned ratio is used to measure ability of the company to pay it's debt payment.…

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.