13. a. The following points should be considered: Revenue is the “lifeblood” of a business. Consequently, revenue growth suggests future profitability, particularly in the presence of fixed costs—once revenue rises to the point where fixed costs are met, profitability can rise very quickly. This suggests that revenue growth has potential as a predictor of future earning power. However, since net income includes both revenues and expenses, net income or loss has at least as much potential
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September 9, 2013 Accounting is the information system which records, summarizes, and reports the underlying economic conditions of an entity. Financial accounting is used to report this information to external parties [managerial accounting is to use this information internally]. Financial statements are management’s report to owners. 3 profit-seeking entities: Sole proprietorship simple to establish, owner controlled Unlimited liability (no legal separation). All profits and
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cash flow financial statements. Over the last three years Masimo has seen an increase in product revenue of more than 23% but has also experienced a decrease in royalty revenue by 42% since 2011. The income statement also shows a higher cost of production over a three year period. In 2011 the cost of goods sold was represented by 33%, however, two years later, the same cost of goods sold was 35% of revenue. Through the purchase of Spire Semiconductor, Masimo expects to see better production costs in
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bills. An electric utility company can estimate with reasonable certainty the expected revenue in a given period by taking into consideration some of the following: customer habits, average historical trends, demand and supply forecasts, and environmental changes. The electric utility industry effectively uses an insurance industry concept—the law of large numbers, to determine with certainty, expected revenue. The law of large numbers states, as the number of participants (customers) in a risk class
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University Malaysia Kelantan (UMK) Malaysian Graduate School of Entrepreneurship and Business (MGSEB) Course Name: Financial Reporting & Controlling Course Code: GST 5033 “Revenue Recognition of AirAsia” Submitted To: Prof Dr. Zulkarnain Bin Muhamad Sori Submitted By: Mohammad Osman Goni (Matric No. P13D179F) Hayder Alwan Kadhim – P13D20F Wesam Esam Hamzi - P14D482F Assel Faisal - P14D484 VALUE CHAIN OF AIRAISA To better understand and analyze the specific activities
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Excello Telecommunications October 4, 2014 ETH/376 Katherine Parks Excello Telecommunications has been profitable for many years, but recently has been faced with increased competition for its products by overseas manufacturers. For the first time in the company, it appears that earnings estimates will not be met. Management is concerned about the effect on bonuses, stock options, and the share price of Excello stock. When Terry Reed, the CFO, learns of a transaction on December 20, 2010,
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Re: Case 03-05, Accounting Issues Background Trademark, Inc., a public and growing global corporation, creates, assembles, and disburses their products through four main divisions of their corporation: Greeting Cards and Stationery, Calendars, Party Goods, and Specialty Gifts. Their core business comes from their customers in drug stores and supermarket chains. In the early to mid 1990’s, Trademark saw significant growth in response to their IPO issuance in 1992, however, since 1994, they have
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in this company. 3.2 Revenue recognition The revenue in the company include sale of goods revenue, rendering of services revenue, land development projects and dividends. According to annual report, these revenues recognized strike to accounting policy. In sale, the revenue only recognized when the significant risks and rewards of ownership have been transferred to buyer. In service revenue, the revenue will be recognized when contract is completed. Both of their revenues are recognized when the
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introduces two controversial financial accounting topics that arise in the software industry: revenue recognition and the capitalization of software development costs. Financial Accounting from a management perspective: With respect to revenue recognition, Microsoft argues that it will provide additional services throughout the life of the software it is selling, so it should defer revenue recognition on a part of the sale price. With respect to software development costs, accounting rules give
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Leases U.S. GAAP SS9 SS8 Generally Accepted Accounting Principle The International Accounting Standards Board (IASB) The International Accounting Standards (IAS) The International Financial Reporting Standards (IFRS) SS10 Recognition R33: Financial Reporting Quality R34: Financial Statement Analysis: Applications Measurement IFRS Disclosure Financial analysis 3-375 4-375 Framework Financial reporting & analysis 1. The role of financial reporting
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