The two main methods of recording accounting transactions are cash basis accounting and accrual basis accounting. Each method has both advantages and disadvantages. However, only one method is approved by GAAP. Cash basis accounting is the method in which cash receipts and cash payments are recorded during the period in which they occur (Spiceland et. al., p. 7). Under the cash basis accounting method, the revenue is recognized when the cash is received and the expense is recognized when the cash
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Accounting Information Systems Acc/340 March 28, 2016 Accounting Information Systems The good thing about having the same person working for the company and doing the same thing is being able to pinpoint that made the mistakes. It is less money that the company has to pay multiple people to perform the jobs. When one person is performing a task and them like it they show the company loyalty and the company shows them appreciation by compensating the workers. The disadvantage comes when
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Economic Consequence Consideration ATG 563 - Advanced Accounting Theory February 14,2012 Should economic consequences be considered by the FASB in the accounting standard setting process? Yes, the FASB should consider economic consequences in the accounting standard setting process. Ever since the creation of the FASB in 1973, it was charged with establishing standards of financial accounting and reporting in the most efficient and complete manner possible. The goal of the FASB is to maintain
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FAIR VALUE ACCOUNTING Abstract The speed of globalization in the capital markets and the increasing complexity of financial instruments have caused financial statement users to question the relevance and usefulness of historical cost accounting (HCA). The propensity to use fair value accounting (FVA) is imminent as we enter into a borderless economy and as financial markets evolve that require more current and relevant financial information. The U.S. Generally Accepted Accounting Principles
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margin, to just cover short-term variable costs, what consequences could it experience? Contribution margin-based pricing attempts to maximize profit generated from the sale of each unit of product by maximizing the difference between that product’s price and variable costs, or contribution margin. Under this pricing strategy, only variable costs, which increase with a higher sales volume and decrease with a lower sales volume, are considered; fixed costs are assumed to be constant over a range of
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sets of accounting standards that are used worldwide. One is the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (GAAP). There is a huge desire for there to one set of accounting standards worldwide with the increase of companies performing business in many different countries and global expansion. The International Financial Reporting Standards are issued by the International Accounting Standards Board. These set of accounting standards
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TABLE OF CONTENT Executive Summary …………………………………………………………………...................2 1.0 Introduction …………………………………………………………………………………...3 2.1 Economic Theory ……………………………………………………………………………...3 2.2 Costs …………………………………………………………………………………………...5 2.3 Cost – plus Pricing …………………………………………………………………………….5 2.4 Production Mix Decision …………………………………………………………..................6 2.5 Target Costing …………………………………………………………………………………7 Conclusion ……………………………………………………………………………....
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use of financial ratios. Ratio analysis is an established technique—involving the relationship between two or more variables--that is used to conduct qualitative analysis of information contained in a company’s financial statement to evaluate both current company performance and attempt to predict future performance. The process begins by acquiring the company’s annual financial statement reports (balance sheets, income statements, statement of cash flows and statement of retained earnings) spanning
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choose EduCare Service. 1. Investment Appraisal Methods There are four types of Investment Appraisal methods. They are- 1. NPV (Net Present Value) 2. PBP (Pay Back Period) 3. IRR (Internal Rate of Return) 4. ARR (Accounting Rate of Return) Among them, NPV (Net Present Value) method is the best way to estimate the profit of the venture. Among these four Investment Appraisal methods in evaluating investment proposals, I prefer NPV (Net Present Value) method most. Because
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What are the advantages of having the same person performing multiple activities in a particular process? What are the disadvantages? When one individual is assigned to multiple activities in a process, it can be advantageous because the person is likely to know how to complete the tasks accurately and efficiently. Additionally, having one person who is performing multiple tasks can reduce costs for employees, as a company is able to train one person to do the job of many. However, there are several
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