Elizabeth Taylor 72682 Computerize Accounting Mr. Taylor Home-work Assignment Definitions 1. Economic Entity Assumption :- is one of the assumptions made in generally accepted accounting principles. Basically, any organization or unit in society can be an economic entity. Examples of economic entities are hospitals, companies, municipalities, and federal agencies. The "Economic Entity Assumption" says that the activities of the entity are to be kept separate from the activities
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Questions 1. Accounting is a system that collects and processes financial information about an organization and reports that information to decision makers. True False 2. Assets on the balance sheet are recorded at market value or replacement cost. True False 3. In accounting and reporting for a business entity, the accounting and reporting for the business must be kept separate from other economic affairs of its owners. True False 4. The accounting period in which
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rule-based, whereas IFRS is principle-based. With a principle based framework there is the potential for different interpretations of similar transactions, which could lead to extensive disclosures in the financial statements. Although, the standards setting board in a principle based system can clarify areas that are unclear. This could lead to fewer exceptions than a rules-based system. Another difference between IFRS and GAAP is the methodology used to assess an accounting treatment. The difference
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The adjusting lower cost of market inventory on valuation is specified in Accounting Research Bulletin No. 43 (ARB No. 43). The Statement of Financial Accounting Standards (SFAS) No. 34 is the statement, which deals with capitalization of interest as part of the cost of the asset. The SFAS No. 144 addresses the reporting and accounting for the impairment of the disposal of long-lived assets. New rules for the accounting for goodwill have been addressed in SFAS No. 142. To be able to complete the
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records. Maintaining control of these principles once put in place permits activities to get the larger picture. Internal control principles include independent internal investigations or surprise inspections that are conducted by an outside source with no hidden agenda to the company. These inspectors follow procedures to reduce fraud and misuse and enhance accounting accuracy by examining documents of transactions received and performed. To balance accounting records bank reconciliation and adjusting
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Although the Conceptual Framework views the primary use of accounting numbers as decision making, we still see accounting measures used in contracts for management compensation. why do you think that companies use accounting numbers in management compensation contracts? (4 marks) The conceptual framework is a set of interrelated concepts that define the nature, purpose and broad content of the general-purpose financial report that provides information useful for the users to make and evaluate
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as well. Terry Reed, the Chief Financial Officer (CFO), is requesting that the accounting team find a way to record the revenue in the current month. Reed wants $1.2 million sale to happen with Data Equipment Systems. Marty Fuller is the accounting team lead. Marty is currently concerned about the legal and ethical consequences options available to the company. Breaking the law is not an option for the accounting department, so the decision needs to be evaluated carefully. Some of the laws that
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following the GAAP. However, to the word of Richard himself, this way of accounting was not a really big deal like the WorldCom bankrupt or Enron bankrupt. And he is also very confident to continue developing his career in the future after he is released from the jail. 1. Sumarize the lessons learned by you from reading this article. The way that Computer Association records its sales has pointed out several accounting principles and concepts. According to the article, the account department recognized
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CHAPTER 20 QUESTIONS 1. Comparability enables users to relate accounting information to a benchmark or standard. The benchmark may be in the form of another firm’s financial statements or financial data of the same firm but for some other time period. An accounting change could make it difficult to compare data from one period to another or from one firm to another, thus detracting from comparability. For example, if a company switched from straight-line depreciation to double-declining-balance
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