Explanation Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the generally followed rules, concepts and principles which are used for the presentation of the financial information of a business organization. The accountant is concerned regarding the manipulation of financial statements by the client. The intention of the client is to report the inflated net income by deliberately capitalizing the costs, that should be appropriately expensed, and through increasing the estimated useful life of the asset. The motive of the accountant was to adhere with the GAAP. Generally, the daily repair and maintenance costs should be recorded as incurred by debiting the repair and maintenance expense account. Given the large number of vehicles, it is anticipated that the repair and maintenance costs would sum up to a huge amount. So, to capitalize the repair costs, the nature of the costs is essential not the amount of total cost. Changing the estimated life of an asset is ethical when the modification is due to the major enhancements to the asset that lengthens its useful life. The change in the estimated life of an asset is acceptable when there is new information available which clearly justifies the change and for that reason better reflects the depreciation expense...

Financial Accounting (5th Edition) (What's New in Accounting)

5th Edition

ISBN: 9780134727790

Author: Robert Kemp, Jeffrey Waybright

Publisher: PEARSON

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…

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Chapter 8 Solutions

Financial Accounting (5th Edition) (What's New in Accounting)

Ch. 8 - Prob. 1DQ Ch. 8 - Prob. 2DQ Ch. 8 - Prob. 3DQ Ch. 8 - What is depreciation, and why is it used in...Ch. 8 - Prob. 5DQ Ch. 8 - Which depreciation method would be moot...Ch. 8 - Prob. 7DQ Ch. 8 - Prob. 8DQ Ch. 8 - Prob. 9DQ Ch. 8 - Prob. 10DQ

Ch. 8 - Prob. 1SC Ch. 8 - Prob. 2SC Ch. 8 - How should a capital expenditure for a long-term...Ch. 8 - Which depreciation method usually produces the...Ch. 8 - Prob. 5SC Ch. 8 - Prob. 6SC Ch. 8 - Prob. 7SC Ch. 8 - Prob. 8SC Ch. 8 - Prob. 9SC Ch. 8 - Prob. 10SC Ch. 8 - Prob. 11SC Ch. 8 - Prob. 12SC Ch. 8 - Prob. 1SE Ch. 8 - Long-term asset terms (Learning Objective 1) 5-10...Ch. 8 - Prob. 3SE Ch. 8 - Lump-sum purchase (Learning Objective 2) 5-10 min....Ch. 8 - Errors in accounting for long-term assets...Ch. 8 - Concept of depreciation (Learning Objective 3)...Ch. 8 - Depreciation methods (Learning Objective 3) 10-15...Ch. 8 - Depreciation methods (Learning Objective 3) 10-15...Ch. 8 - Prob. 9SE Ch. 8 - Prob. 10SE Ch. 8 - Prob. 11SE Ch. 8 - Prob. 12SE Ch. 8 - Prob. 13SE Ch. 8 - Prob. 14SE Ch. 8 - Prob. 15SE Ch. 8 - Other long term assets (Learning Objective 8) 5-10...Ch. 8 - Prob. 17SE Ch. 8 - Prob. 18AE Ch. 8 - Prob. 19AE Ch. 8 - Prob. 20AE Ch. 8 - Prob. 21AE Ch. 8 - Depreciation methods (Learning Objective 3) 15-20...Ch. 8 - Prob. 23AE Ch. 8 - Prob. 24AE Ch. 8 - Prob. 25AE Ch. 8 - Prob. 26AE Ch. 8 - Prob. 27AE Ch. 8 - Prob. 28AE Ch. 8 - Prob. 29AE Ch. 8 - Prob. 30AE Ch. 8 - Prob. 31AE Ch. 8 - Prob. 32BE Ch. 8 - Prob. 33BE Ch. 8 - Prob. 34BE Ch. 8 - Prob. 35BE Ch. 8 - Prob. 36BE Ch. 8 - Prob. 37BE Ch. 8 - Prob. 38BE Ch. 8 - Prob. 39BE Ch. 8 - Prob. 40BE Ch. 8 - Prob. 41BE Ch. 8 - Prob. 42BE Ch. 8 - Prob. 43BE Ch. 8 - Prob. 44BE Ch. 8 - Prob. 45BE Ch. 8 - Long-term asset costs and partial-year...Ch. 8 - Journalizing long-term asset transactions...Ch. 8 - Prob. 48AP Ch. 8 - Prob. 49AP Ch. 8 - Prob. 50AP Ch. 8 - Prob. 51AP Ch. 8 - Prob. 52AP Ch. 8 - Prob. 53BP Ch. 8 - Journalizing long-term asset transactions...Ch. 8 - Prob. 55BP Ch. 8 - Prob. 56BP Ch. 8 - Prob. 57BP Ch. 8 - Prob. 58BP Ch. 8 - Prob. 59BP Ch. 8 - Prob. 1CE Ch. 8 - Prob. 1CP Ch. 8 - Continuing Financial Statement Analysis Problem...Ch. 8 - Prob. 1EIA Ch. 8 - Prob. 2EIA Ch. 8 - Financial Analysis Purpose: To help familiarize...Ch. 8 - Prob. 1IA Ch. 8 - Prob. 1SBA Ch. 8 - Written Communication A client of yours notified...

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