financial accounting income frequently differ. Income for federal tax purposes is computed in accordance with the prevailing tax laws, whereas financial accounting income is determined in accordance with GAAP. Therefore, a company’s income tax expense and income taxes payable may differ. The incongruity is caused by temporary differences in taxable and/or deductible amounts and requires interperiod tax allocation. II. Intraperiod Tax Allocation – Intraperiod Tax Allocation involves apportioning
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of the employees with the financial performance of Proxima, the award was designed to vest only if cumulative revenue over the following three-year reporting period was greater than $10 million and the employees were still employed by the organization at the end of the exercise period. At the date of the grant, management believed it was probable that Proxima would achieve cumulative revenue in excess of $10 million over the prescribed three-year period. Each award had a grant-date fair value of $9
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Week One Individual Explaining Basic Accounting Concepts and Business Structures Week One Individual Generally Accepted Accounting Principles and Source Hierarchy The sources of Generally Accepted Accounting Principles are the FASB standards, Interpretations, and Staff Positions, APB Opinions, AICPA Accounting Research Bulletins and other authoritative pronouncements. The hierarchy is as such: Category A, B, C, and D and Category A is the highest hierarchy. The following
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and ownership equity at a given point in time. 2. Statement of Comprehensive Income: also referred to as Profit and Loss statement, reports on a company's income, expenses, and profits over a period of time. A Profit & Loss statement provides information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state. 3. Statement of Changes in Equity: explains the changes of the company's equity throughout the reporting period 4. Statement
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Organizations A free resource provided by the Virginia Society of Certified Public Accountants Introduction • Selecting the budget committee • The task of the budget committee • Setting budget priorities and realities — revenues • Setting budget priorities and realities — expenses and costs • When to prepare the budget • A budget for cash flow • A budget for capital expenditures — bought or received • Restricted grants • Changes to the budget • Conclusions Introduction Nonprofit
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about rights and obligations deal with whether assets are the rights of the entity and liabilities are the obligations of the entity at a given date. • Assertions about valuation or allocation deal with whether asset, liability, revenue, and expense components have been included in the financial statements at appropriate amounts. • Assertions about presentation and disclosure deal with whether particular
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matches your income and expenses, but if this method is not managed carefully you could lose track of your actual cash flow. For example you could be recording lots of income for jobs completed, but not receiving payments on a transaction. Under accrual basis transaction that changes a company’s financial statements are recorded in which the events occur. The revenue recognition matching principles are used under the accrual basis. Under the accrual basis accounting revenue is recorded when cash is
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interest-bearing note receivable from Easton Company. Pizzini Company will receive interest at the prevailing rate for note of this type. Both the principal and interest are due in one lump on March 31, 20X2. When should Pizzini Company report interest revenue from the note receivable? Discuss the rationale for your answer. A note receivable is a formal, written promise to receive a specific amount of cash from another party in the future. In this case, the party who receives payment under the terms of
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recorded in Runway’s income statement. Is this consideration an adjustment of the selling prices of the vendor’s products or services, and therefore characterized as a reduction of revenue, or is it a cost incurred by the vendor for assets and services received from the customer, and therefore characterized as a cost or expense? The next significant accounting issue is regarding when Runway should record the $25 referral credit as a liability: (a) at the time an existing customer receives the $25 referral
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Lapping refers to misappropriation of cash receipts. The theft is concealed by manipulation of A/R to cover the cash receipts. The cash received later is recorded toward the original A/R. The fraud is also covered by recording cash transfers to rare expenses or other accounts in G/L. c. A critical evaluation of evidence and professional skepticism are required for all financial statement audits, fraud examinations, and financial forensic examinations. Agreed. A critical evaluation of evidence is required
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