Accounting period: the annual reporting period (or fiscal year) Accounting priciples: are fundamentals theories, truths and propositions that serve as the foundation for financial accounting and reporting Accounting standards: establish the authoritative guidance on how companies should account for and report specific transactions events and arrangments in their financial statements Accrual accounting: measures the reports and economic effect of a companies transactions evente etc in the periods
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be the most important financial record because it shows whether a business achieved its Profitability goal though its operating activities. 2. [Revenues – Expenses = Net Income] 3. Elements a. Revenues: Increases in stockholder’s equity resulting from business operations b. Expenses: Decreases in stockholders’ equity resulting from operating expenses. Generally, a company
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4-7 1. State’s entry for 2011 Taxes receivable $550 Sales tax revenues $550 To record sales taxes for 2011 (the entire amount, inasmuch as the taxes were remitted within 15 days of the close of the year and thus were “available”). The taxes collected in February were applicable to 2012 and thus are given no recognition on the 2011 statements. 2. City’s entry for 2011 Taxes receivable $ 55 Sales tax revenues $ 55 To record sales taxes for 2011. The city would recognize the
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2007 Income Statement An income statement is the amount of revenue earned and expenses incurring by a business over a period of time. The income statement is separated into two parts, the revenue or moneys coming into a business and the expenses or the money going out of the business. Brandywine’s 2007 Income Statement Revenue $12,000,000 Operating Expenses: Salaries Expense $5,000,000 Supplies $120,000 Utilities
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SUMMARY Rosewood Hotels & Resorts (Rosewood) was a group of private iconic luxury hotels without any corporate branding in 2004. To boost the company’s growth, the then CEO and Vice President decided to bring about corporate branding of Rosewood hotels but also wanted to maintain its distinctiveness of each individually branded hotel. CURRENT SCENARIO As of 2003, Rosewood had 12 hotels worldwide with a total capacity of 1513 rooms. The nightly rates ranged from $120 for one of the Saudi
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cash receipts like revenue and cash payments like expenses. It records cash receipts whenever there is cash inflows and records cash payments whenever there is a use of assets and expenses. The second method is accrual accounting which is used by most of the big businesses. According to Horngren et al. (2007:102), effect of each transactions made by business are recorded as it occurs in accrual accounting. Recognition of revenue and matching principle are applied. Revenue will be recorded right
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The Difference between U.S. GAAP and IFRS on Revenue Recognition The Difference between U.S. GAAP and IFRS on Revenue Recognition Trade activities among world economies and the expansion of corporate America overseas have created a need for better and uniform global accounting standards. Many countries conduct businesses globally, especially with the United States. The convergence from Generally Acceptable Accounting Principle (GAAP) to International Financial Reporting Standards (IFRS)
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industry and reflect their performance in recent years. Activities Alaska Airlines reported record earnings for the year 2010, with a $203 million improvement from 2009. A 9.8% increase in passenger traffic over the previous year drove the revenue increase (Alaska Air Group, Inc., 2011). Alaska also led the ten largest carriers in on-time performance for the year. For the third year in a row, it ranked highest in customer satisfaction among traditional network carriers, as listed by J.D. Power
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What effect did Microsoft’s software capitalization policy have on its financial Wants to help up and coming firms By Lawrence Latif 1. statements? Ignore any potential tax effects. a. Assume that 60% of Microsoft’s research and development expenses were incurred after technological feasibility was established, that the average product life was two years, and that the company begins amortizing software costs at the beginning of the following year. Estimate the effect of capitalizing software
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1. Is the Power Starterpack a multiple-element arrangement? According to ASC 605-25-05-1, a multiple-element arrangement is one in which a company "will perform multiple revenue-generating activities." In such an arrangement, a company provides multiple products or services, usually under a single contract. Often, a company will "transfer [those] deliverables to the customer and performance may occur at different times or over different periods of time" (ASC 605-25-05-2). Given these complexities
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