about the reliability of a written assertion of another party. Audit of historical financial statements: A form of attestation services, the auditor issues a written report expressing an opinion about whether the F/S is in material conformity (一致) with accounting standards. e.g.: listed company must provide shareholders with annual financial statements that are audited by an independent accounting firm. Review of historical cost financial statements: A form of attestation services, a public accounting
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Principles of accounting 1. Reliability 2. Historical Cost Basis – assets and rights of the Company are accounted for at their historical or production cost 3. Revenue – the company should establish rules when the revenue must be recognized and subsequently recorded. In accrual accounting revenue is recognized when the products are already delivered. 4. Matching – its important to link the income of the period with the costs incurred for that income. 5. Consistency 6. Disclosure
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decisions Historical perspective Emphasis on verifiability Emphasis on precision Primary focus is on the whole organization Must follow GAAP and prescribed formats Managerial Accounting Managers who plan for and control an organization Future emphasis Emphasis on relevance for planning and control Emphasis on timeliness Focuses on segments of an organization Need not follow GAAP or any prescribed format 10 Accounting Differences Financial External focus Whole organization Historical Quantitative
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Chapter 01 Environment and Theoretical Structure of Financial Accounting True / False Questions 1. | The primary function of financial accounting is to provide relevant financial information to parties external to business enterprises. True False | 2. | Accrual accounting attempts to measure revenues and expenses that occurred during accounting periods so they equal net operating cash flow. True False | 3. | The FASB is currently the public-sector organization
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with your recommendations on the European expansion of Custom Snowboards Inc. for the chief executive officer (CEO) by doing the following: 1. Present a historical analysis of past performance. a. Analyze what the historical analysis indicates about future performance. 2. Discuss how the current operations can be improved through better cost controls. 3. Custom Snowboards, Inc. has the opportunity to enter the European market by building a production plant, merging with European SnowFun, Inc
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Problems, Options and Recommendations The problem that we have recognized in this case is that Butler Lumber Company does not have enough funds to finance its operations in the future. The company has experienced a shortage in cash and needs to issue debt as it moves forward. The company is also under pressure because of the payment to be made to Mr. Stark for the buyout of his share in the company of $105,000. Although, the majority of this payment has been made, Butler still owes Stark another
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all texts assume that the business which is likely to use management accounting is a manufacturing business. Also, there is unanimity in assuming that the behavior of variable costs within a relevant range tends to be linear. The consequence of assuming that variable costs vary directly with volume is a classification of cost into fixed and variable. A description of the managerial accounting perspective of management and the business enterprise will help put in focus the subject matter to be presented
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fair value accounting will make financial statements more relevant and reliable. Currently the majority of assets are recorded under historical cost. Under historical cost the asset is recorded under the price it was purchased at and then depreciated over its useful life. However, this concept has proven to be not as reliable since it does not take into account changing appreciation and depreciation of the asset. Under IFRS and fair value the asset must be annually checked for impairment making
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this paper. Information for the analysis portion was retrieved from the financial statements included in the assignment. Keywords: Accrual Basis Accounting; Cost Basis Accounting; Current Assets and Liabilities; Double Entry Accounting; Financial Accounting Standards Board (FASB); General Accepted Accounting Principles (GAAP); Historic Cost; Non-current Items; Security Exchange Commission (SEC); Financial Statements: Foundational Accounting Principles and Terminology Introduction The
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payment-determination bases. Cost base - —A payment system that uses provider cost, as opposed to charges, as the starting point to determine the amount of payment. A cost-payment basis simply means that the underlying method for payment is the provider’s cost. The rules for determining cost are specified in the contract between the payer and the healthcare provider. Fee-schedule -—The actual payment is predetermined and is unrelated to either the provider’s cost or the provider’s actual prices
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