unreasonable estimates or one time transactions during good economic times in order to smooth out activity in bad economic times (Levitt). These transactions directly violate, not only simple human honesty, but also Conservatism, one of the main accounting principles. A real world example of the use of cookie jar reserves is the computer company Dell. In 2010, they paid a penalty to the SEC of $100 million dollars due to their using of cookie jar reserves. To establish their reserves, Dell did
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standards for accounting of state and local governments by determining what pieces of data are necessary to provide useful information to citizens. FASB creates standards for all business and government entities to follow. GASB monitors government entities and sets the standards for local and state governments, while FASB works to help investors and creditors make decisions from the rules regulating the accounting standards of private entities. GASB helps to identify how accounting should be handled
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Green Dreams Evaluation Exercise Answer these questions on a group basis: 1. Develop a chart similar to the evaluation handout and fill in all of the pieces for the main accounting issue: “How should Green Dreams account for the sales/use taxes?” Use the provisions of SFAC #6 and FASB #5 to reach a conclusion. |Elements of Reasoning | |What is
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Q NO.03: Discuss the role of each of the following in the Formation of Accounting Principles? * AICPA * FASB * SEC Ans: * AICPA: American Institute of Certified Public Accountant: The American Institute of Certified Public Accountants (AICPA) is the national professional organization for Certified Public Accountants (CPAs) in the United States. Founded in 1887, the American Institute of Certified Public Accountants (AICPA) is the national professional organization of Certified
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Case 1-3 Politicalization of Accounting Standards Some accountants have said that politicalization in the development and acceptance of generally accepted accounting principles (i.e., standard setting) is taking place. Some use the term politicalization in a narrow sense to mean the influence by governmental agencies, particularly the SEC, on the development of generally accepted accounting principles. Others use it more broadly to mean the compromising that takes place in bodies responsible for
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significant asset for numerous companies, especially those which are operating in high technology industries. According to the growing importance of intangibles there has also been a significant change in standards associated with accounting for goodwill. In 2004 International Accounting Standard Board (IASB) issued
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Theoretical Structure of Financial Accounting AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments, and faculty may approach assessment and its documentation differently, one approach is to provide specific questions on exams that become the basis for assessment. To aid faculty in this endeavor, we have labeled each question, exercise and problem in Intermediate Accounting, 7e with the following AACSB
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investment opportunities. This, in turn, made the need of financial information essential in international capital market. Relevant and reliable financial information aids in making economic decisions relating to the reporting entity. Also enables its users to measure and quantify the economic and financial aspects of an enterprise. Kothari and Barone (2006:23) believe that 'accounting is becoming increasingly globalized'. However, ‘current accounting practice does not meet the information needs of capital
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up to date for the released results of standard-setting activity. c. What authoritative literature does the codification supersede? The codification in Statement No. 168 supersedes Statement No. 162 - The Hierarchy of Generally Accepted Accounting Principles. d. How is the codification structured? Include as discussion of the topic, subtopics, sections and subsections in your answer. The Codification is organized into Areas, Topics, Subtopics, and Sections. Each Area, Topic, and
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drawing conclusions and communicating your results. 2. Accounting, auditing, or tax research involve a systematic and logical investigation of an issue or problem using the accountant’s professional judgment. Furthermore, accountants approach this problem using critical-thinking skills to obtain and document evidence underlying a conclusion relating to an issue or problem currently confronting the accountant or auditor. 3. Accounting, auditing, or tax research are necessary in order to determine
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