ACT 4000 Week 2 Materials TABLE OF CONTENTS Learning Objectives..................................................................................................... 2 Basic Accounting Concepts ....................................................................................... 3 Cash versus Accrual Accounting................................................................................7 Qualitative Characteristics of Accounting Information ...........................................9 Valuations
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requested. Assume a December 31 fiscal year-end unless specifically stated otherwise. Assume all amounts are material unless directed otherwise. Assume all companies are public companies unless otherwise noted. Assume no companies use differential reporting unless otherwise noted. 30 Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a)
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single-step income statement. F 10. Current operating performance approach. T 11. Reporting discontinued operations. F 12. Reporting extraordinary items. F 13. Irregular items. T 14. Intraperiod tax allocation. F 15. Reporting earnings per share. F 16. Computation of earnings per share. T 17. Prior period adjustments. F 18. Retained earnings restrictions. F 19. Comprehensive income definition. T 20. Reporting other comprehensive income. Multiple Choice—Conceptual Answer No. Description
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financial support to the cyclists. The cost of goods sold for Competition Bikes, Inc. declined 14.5% in Year 8, a 31.8% drop contrast to Year 7. Even though it does draw a parallel to earnings the decrease was not significant. Selling costs such as advertising, website creation and sales commissions, distribution network support, maintenance, and transportation showed declined by 14.9 %, a slump from 33% in Year 7. This decrease in the cost between goods sold and the selling expenses are full force
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excess amortizations. If Pilgrim has paid a significant amount in excess of book value so that annual amortization charges are quite high, use of the equity method might be preferred to show the effect of this expense each month (or whenever internal reporting is made). In this case, waiting until the end of the year and recording all of the expense at one time through a worksheet entry might not be the best way to reflect the impact of the expense. Amount of intercompany
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prices. 2. High market competition The market in which JB Hi-Fi (JBH) operates is a mature industry, thus severe competition exists, due to the high degree of similarity, between JBH and other retailers, such as Harvey Norman, Dick Smith and The Good Guys. Although, JBH has maintained its market leading position, its ability to gain may be limited when other competitors take actions to fight for market shares, for example, JBH experienced high level of unstable discounting in the 2012 financial
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concepts/topics as they are introduced throughout the course. LEARNING OUTCOMES Students should be able to: 1. Identify the various costs that are part of a business environment and the three elements of product cost 2. Differentiate between the different costing systems 3. Illustrate business transactions using T-account analysis 4. Prepare the statement of cost of goods manufactured and an income statement 5. Calculate the break-even point in units and dollars, and target sales in units and dollars
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9% and have been trending downward since that point. They are currently at their lowest point over the entire reporting period, at 8.2%. 4. Are sales (revenues) growing steadily, and, if so, at what rate? The sales growth peaked in 2004 and declined by about 4.9% in 2005 5. What is the cost of goods sold compared to revenues? The sales revenue is larger than the cost of goods sold for the years 2003-2005, but by a shrinking amount each year 6. Is it increasing or decreasing? It is
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WILEY CPA EXAM REVIEW Financial Accounting and Reporting F O U R T H • concepts • problem-solving E D I T I O N • terms • rules Less Antman and criteria WILEY CPA EXAM REVIEW Financial Accounting and Reporting F O U R T H • concepts • problem-solving E D I T I O N • terms • rules Less Antman and criteria Copyright © 2006, by John Wiley & Sons, Inc. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada.
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services, innovation and competition -- whether the income stems from a service company or a merchandising business. If you study an organization's income statement, you see things like revenues, cost of goods sold and administrative expenses -- all of which lead to net income or loss at the end of the reporting period. Income Statement When much of the economy struggles, you can look at corporation's income statement to figure out whether it's bowing to the overall negative environment or whether top
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