Chapter 12 Cash debt coverage ratio A cash-basis ratio used to evaluate solvency, calculated as cash provided by operating activities divided by average total liabilities. (p. 000) Current cash debt coverage ratio A cash-basis ratio used to evaluate liquidity, calculated as cash provided by operations divided by average current liabilities. (p. 000) Direct method A method of determining net cash provided by operating activities by adjusting each item in the income statement from the accrual basis
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Watts (2003) Conservatism in Accounting Part I: Explanations and Implications Paper Review ACCT 3040 Advanced Accounting Theory and Practice Mr Terry Harris Conservatism is one of the fundamental principles of accounting and its application in financial accounting has recently become a highly controversial issue involving a variety of views as there is a desire for financial accounting information to be neutral. Conservatism has lasted in the accounting practice for many years and has
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payments resulted in poor profit performance. Collectively, this culminated to a reported loss in 1982 of $77 million. Accounting policy changes and estimates that Harnischfeger made during 1984 and the effect of these on the company’s 1984 reported profits are further explained in the following paragraphs. The Harnischfeger Company made accounting policy and accounting estimate changes as part of a corporate recovery plan. A plan which consisted of the following four criteria: changes in
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Kapitel 1 Normative (prescriptive) accounting theory Inte baserad på empiriska tester (som positive teorier är) utan de är baserade på vad researcher tror ska eller borde inträffa vid särskilda omständigheter. Teorier som föreskriver (prescribe) istället för förklarar (describe) särskilda handlingar kallas för normativa teorier eftersom att dom baseras på normer som researchern som lägger fram teorierna har. T.ex. säger hur vi ska ta till oss och använda redovisningsmetoder. Kapitel 2
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1 General-purpose financial statements are the product of a. financial accounting. b. managerial accounting. c. both financial and managerial accounting. d. neither financial nor managerial accounting 2 . Users of financial reports include all of the following except a. creditors. b. government agencies. c. unions. d. All of these are users. 3 . Which of the following statements is not an objective of financial reporting? a. Provide
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1.0 Introduction to Accounting • Accounting is the process of identifying, measuring and communicating information to permit informed judgments and decisions by users of the information. • There are two main types of accounting: 1. Financial accounting This is primarily concerned with the recording of transactions between the business and other individuals and organisations. It also includes the preparation of reports on the performance of the business
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I. Define: Historical cost principle – GAAP mandates that companies will record assets and liabilities at the acquisitions price. Unlike other methods this is the only method that is very verifiable. Going concern assumption- The assumption that a business has a long life span, it is important assumption as it crucial for both investors and lenders to review the company’s long-term assets and long-term liabilities. It is also very important from the depreciation aspects of assets and liabilities
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P R E FAC E THE ACCOUNTING ENVIRONMENT Accounting is the most employable, sought-after major for 2009, according to entrylevel job site CollegeGrad.com. One reason for this interest is found in the statement by former Secretary of the Treasury and Economic Advisor to the President, Lawrence Summers. He noted that the single-most important innovation shaping our capital markets was the idea of generally accepted accounting principles (GAAP). We agree with Mr. Summers. Relevant and reliable financial
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Verifiability 2.Representational faithfulness 3..Neutrality Secondary qualities: 1.. Comparability: information that has been measured and reported in a similar manner for different enterprise is considered comparable 2. consistency : same accounting treatments to similar events by an entity from period to period is considered consistent ELEMENTS OF FINANCIAL STATEMENTS ASSETS: Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions
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of constraints (TOC) is about thinking in logical, systematic, or structured processes similar to the PDCA learning loop and also about analyzing cause and effect, verifying basic assumptions, exploring alternatives and process improvement. The goal of TOC is to maximize the efficiency of a process selectively at the most critical points (constraints) and thereby maximize profitability. The purpose of this paper is to provide a comprehensive descriptive study on applying “Theory of Constraint” principles
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