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1. The par value of the common stock is an arbitrarily assigned per share value used primarily for accounting purpose
True or False
2. As a rule, the necessary inputs to an effective financial analysis include, at minimum, the income statement and the statement of cash flow.
True or False
3. The president's letter, as the first component of the stockholders' report, is the primary communication from management to the firm's employees.
True or False
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- 1. From the information below construct an income statement. Calculate the firm’s earnings per share and dividends per share. What can we learn by reviewing a firm’s income statement? What basic relationship can we see in an income statement?A business will construct its financial statements in a particular order because they are interrelated. This means that items formulated in an earlier statement feed into the subsequent statements, and changes to items on one financial statement can have compounding effects on the overall financial position of a company. 1. Which of the following is one reason the statement of owner's equity is prepared after the income statement? 2. Which of the following is one reason the statement of owner's equity is prepared before the balance sheet?In this module, we learned about a corporation's dividends, retained earnings, and income reporting. The purpose of this discussion is to explore the underlying concepts in more detail so that all participants can increase their understanding. For your thread portion, think about a concept that you are either having difficulty understanding, would like to learn more about, or that you already understand. Topic areas could include how to account for cash dividends, stock dividends, and stock splits, the reporting of stockholders' equity and its related analysis, or the form and content of corporation income statements. Next, enter the discussion, create a thread, and post either a question or a short description of the concept that you selected. You can reference any part of the chapter, a video link, or any other content which will benefit your fellow classmate, or that they can use to help you increase your understanding.
- Which of the following is correct criticism on the positive accounting theory? O a. It gives prescriptions for accounting practice of the company. O b. It misleads the stock market by manipulating the earnings. O c Its earnings numbers prepared according to a single basis. O d. It says something about good or bad accounting policy of the company.Which of the following statements are (is) most likely be false? 1. The principal goal of the financial manager is to maximize the wealth of the stockholders. II. One of the major functions of the board of directors is to develop long-term business strategies and goals. III. The agency problem exists primarily in companies of which common stock is closely held. IV. Key financial statements filed on Form 10-K are the balance sheet, income statement, statement of cash flows, and statement of retained earnings. V. The treasurer typically handles the accounting activities, such as tax management, data processing, and cost and financial accounting. VI. Financing decisions deal with the right-hand side (credit) of the firm's balance sheet and involve the most appropriate mix of liabilities and equity. O I, II, and IV only O III and VI only O IV, V, and VI only O III and V only4. Match the description with its appropriate term. Group choices: a. Chief Financial Officer b. Financial Analyst c. Enrolled Agent d. Chief Executive Officer e. Controller f. Cash Managemnet Accountant Has responsibilities that include transferring monies between accounts and monitoring deposits? The corporation officer who has the overall responsibility of the management of a company? A corporate officer who reports to the chief executive officer and oversees all of the accounting and finance concerns of a company? The financial officer of a corporation reporting to the chief financial officer who is responsible for the accounting records and financial statements? A credential focusing on a career in taxation created by the IRS to signify significant knowledge of the US tax code? Someone who assists in preparing budgets, tracking actual costs and performs other tasks that support other management personnel in organizing forecasts and projections?
- In analysis earnings quality. Earnings quality refers to the reliability of the financial statements presented and whether it reflects the current business environment.Required:In 300 words, discuss the determinants of earnings quality2. Multiple choices, please choose one of the correct choices 1) Which one of the following statements is not true? a) Financial accounting reports are used by investors to make investment decisions while cost and management accounting reports are used by managers to make business decisions. b) Financial accounting summarizes accounting transactions while cost and management accounting presents a detailed analysis of costs, selling prices and any other information required by an entity's management.< c) Financial accounting reports report on what has happened while management accounting reports focus on current activity and future projections. d) Financial accounting reports have an internal user focus while management accounting reports are focused on external users of accounting information.< 2) What kind of cost does the table represent? Output Cost 5,000.00 12,000.00 a) Semi-variable Cost b) Fixed Cost c) Variable Cost 30,000.00 55,000.00 90,000.00 ✔ e A 3) The form and content of…Identify the term being referred to: A theory that states that shareholders will encourage the board of directors to declare as much dividends as possible so that only the minimum amount of cash is available to the entity. This is to prevent excessive spending by managers. *
- Question 1 .Generally, the purpose of financial statements is to help investors and other users make informed financial decisions about the entity in which they have an interest or stakeholding. Financial statements provide the owners of the business with some means of assessing the proficiency with which their business is being run. These statements are therefore one way in which shareholders can assess or evaluate the directors’ performance in running the company. This is because financial statements report the impact management decisions have on the company’s financial position and cash flows for the year. However, with creative accounting being practiced by the corporate world, it seems published financial statements rarely serve the purpose for which they are prepared. Discuss. .“The goal of a firm is to maximize shareholder’s wealth” Evaluate and comment on this assertion in view of the Agency Theory in Financial Management. From a mature Zambian company’s perspective, examine…The financial information presented in the financial statements needs to have some key qualitative characteristics to make it useful to the users of financial statements. a) Describe the "reliability" characteristic of financial information. b) Chairman's statement is not a compulsory disclosure. Discuss the reason for most of the annual reports include it as an important qualitative information? c) With examples, explain the five (5) components of the accounting equation that made up the statement of financial position (balance sheet), which is one part of several financial statement's components. d) Discuss how auditor's opinion helps the shareholders in their decision-making process. T7. Determine the response that best completes the following statements or questions. A) The primary objective of financial reporting is to provide information. multiple choice 1 About a firm's management team. Useful to capital providers. About a firm's financing and investing activities. Concerning the changes in financial position resulting from the income-producing efforts of the entity. B) Statements of Financial Accounting Concepts issued by the FASB multiple choice 2 Represent GAAP. Identify the conceptual framework within which accounting standards are developed. Have been superseded by SFASs. Are subject to approval of the SEC. C) In general, revenue is recognized when multiple choice 3 A good or service has been delivered to a customer. The sales price has been collected. A contract has been signed. A purchase order has been received. D) In depreciating the cost of an asset, accountants are most concerned with…
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