following cases. 1. Qualitative characteristic being employed when companies in the same industry are using the same accounting principles. 2. Quality of information that confirms users’ earlier expectations. 3. Imperative for providing comparisons of a company from period to period. 4. Ignores the economic consequences of
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Questions A-1 In cost-plus pricing, prices are set by adding a markup to a product’s cost. The markup is usually a percentage. A-2 The price elasticity of demand measures the degree to which a change in price affects unit sales. The unit sales of a product with inelastic demand are relatively insensitive to the price charged for the product. In contrast, the unit sales of a product with elastic demand are sensitive to the price charged for the product. A-3 The profit-maximizing price should
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major component of cost of goods sold. External factors are generally considered to be a substantial driver of raw materials price changes. Political unrest, weather and geological disasters, and global supply issues are the common factors that affect cost of goods sold. A change in materials price is a surefire way of affecting gross profit. Implementation of 6% GST by government As GST is more "efficient" than the current sales tax because it only taxes value added, and not gross sales value. This
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Answer: TRUE Diff: 1 LO: 18-1 AACSB: Ethical Understanding AICPA Functional: Reporting 4) The accountant for Myra Lido deliberately deferred cash payments for business expenses in order to record a higher operating cash flow for the company. As long as the amount was not material, this would not be considered unethical behavior. Answer: FALSE Diff: 1 LO: 18-1 AACSB: Ethical Understanding AICPA Functional: Reporting 5) Financial statements prepared for investors and creditors
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Butler Lumber Company Case Analysis In completing the case, we have consulted only with each other and/or the instructor. Sergei Chunkovsky Hung Nguyen Jeffrey Parrish January 25, 2016 Butler Lumber Company, a lumber company located in the Pacific Northwest, is rapidly expanding and is seeking to borrow more cash to finance its day-to-day operations. However, their current bank, Suburban National, has imposed a limit on their borrowing thus causing Butler to seek funds from another
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Analysis Comparative and ratio analyses are two ways that companies look at their own growth and that of their competitors. Comparative analysis is a way for businesses to look over several accounting periods and find emerging trends and see how the business is progressing in areas. Ratio analysis is a financial technique that allows companies to quickly see how they are doing at any given moment and also allows investors to see how that company is doing at that moment. Two areas that can be looked
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concerned with evaluating the economic situation of the firm and predicting its future course. As we know, financial statement analysis so important for investors and creditors. Investors or creditors are interested in the trend of past sales, cost of good sold, operating expenses, net income, cash flows and return on investment. These trends offer a means for judging management's past performance and are possible indicators of future performance. Besides that, financial statement analysis shows the
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economic influences affecting Riordan Manufacturing are real GDP growth, inflation, labor cost, interest rates, global monetary values, and fuel prices. These economic influences have an effect on the operational cost and liabilities of Riordan Manufacturing. Tax rates, environmental regulation, customs regulations, and employment regulations are some key government influences that affect Riordan's operational cost and income taxes paid. Riordan is a multi-national corporation, the government influences
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John Lewis Partnership Contents Introduction 2 Mark and Spencer: 2 Competitors: 3 John Lewis Partnership 4 Factors affecting financial Performance: 5 Analysis of Data Available 6 Revenue and Growth: 6 Profitability Ratios: 6 Gross Profit: 7 ROCE: 7 Net Profit Margin 8 Net Asset Turnover 8 EBITDA/Capital employed 9 Activity Ratios 9 Debtor days 9 Creditor days 10 Stock days 10 Cash Conversation Cycle 11 Sales/net current assets 12 Liquidity ratios 13 Current Ratio 13 Quick Ratio
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Accounting -- a system for keeping score in business, using dollars. Accounting period -- the period of time over which profits are calculated. Normal accounting periods are months, quarters, and years (fiscal or calendar). Accounts payable -- amounts owed by the company for the goods or services it has purchased from outside suppliers. Accounts receivable -- amounts owed to the company by its customers. Accrual basis, system, or method -- an accounting system that records revenues and expenses at the
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