Help Question:5How does the prudence convention differ from the conservatism principle?(a) It ignores all potential losses(b) It requires delaying all revenue recognition(c) It requires evidence before recognizing positive events while still reporting threats(d) It only applies to asset valuation

Option a: This option is incorrect because the prudence convention does not ignore potential losses.…

Answered: Question:5 How does the prudence…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity

Section: Chapter Questions

Problem 7CYBK

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Which of the following risks is an inherent risk related to asset impairment? a. Determining asset impairment is based on management judgment. b. It is difficult to identify the costs associated with the discovery of natural resources. c. Management might have incentives to not record all asset disposals. d. All of the above are inherent risks related to asset impairment. 4.
Which of the following statements is correct? O Intangible assets used in the operation of a business are always long term O Some intangible assets convey exclusive rights which are represented only by tangible physical substance O Intangible assets are obtained in two ways: acquisition from an external source or internally developed O The process of recording the expiration of the economic benefits of an intangible asset is called depletion
Depreciation continues to be one of the most controversial, difficult, and important problemareas in accounting 1. Explain the conventional accounting concept of depreciation accouting，and discuss its conceptual merit with respect to ( a) the value of the asset, (b) the amount( s) expensed, an ( c) the discretion of management in selectin g the method. 2. Answer the following: a. Explain the factors that should be considered when applying the conventional concept of depreciation to the determination of how the value of a newly acquired computer system should be assigned to expense for financial.
23) The IFRS criteria for recognizing a transfer of a receivable focuses on which of the following? a)Risks b)Rewards c)Loss of control d) All of these answers choices are correct.
3. Which of the following is not an inherent risk related to long-lived asset. accounts? a. Failing to record asset disposals. b. `Capitalizing repairs and maintenance expense. c. Changing depreciation estimates to manage earnings. d. All of the above.
part 1. What is a contingency? a. An existing situation where uncertainty exists as to possible gain or loss that will not be resolved in the foreseeable future. b. An existing situation where certainty exists as to a gain or loss that will be resolved when one or more future events occur or fail to occur. c. An existing situation where uncertainty exists as to possible loss that will be resolved when one or more future events occur. d. An existing situation where uncertainty exists as to possible gain or loss that will be resolved when one or more future events occur or fail to occur. part 2. Which of the following is the proper way to report some gain contingencies? a. As an account receivable with additional disclosure explaining the nature of the contingency. b. As a disclosure only. c. As deferred revenue. d. As an accrued amount.
Which of the following is a false statement about depreciation? It has no impact on cash It represents the physical deterioration of an asset It exists because of the matching principle Accelerated methods of calculating depreciation are acceptable under GAAP
What is underpricing? Why is it used? What evidence do we have to support the belief that underpricing is a regular problem?
What type of intangible asset is the goodwill account? What does it mean to the purchaser if the goodwill account seems too excessive or is negative? What does it mean to the seller? Would you prefer to purchase excess goodwill or lower your purchase price to have zero or negative good will?

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Question:5 How does the prudence convention differ from the conservatism principle? (a) It ignores all potential losses (b) It requires delaying all revenue recognition (c) It requires evidence before recognizing positive events while still reporting threats (d) It only applies to asset valuation