Desired qualitative characteristics of financial reporting

Assignment Help Financial Accounting
Reference no: EM131208062

Demonstrate your ability to identify the basic assumptions, principles, and desired qualitative characteristics of financial reporting and accounting information. Listed below are the accounting assumptions, principles, and qualitative characteristics contained in the FASB’s Conceptual Framework for financial reporting.

A Periodicity assumption

B Monetary unit assumption

C Going concern assumption

D Economic entity assumption

E Full disclosure principle

F Revenue recognition principle

G Historical cost principle

H Matching principle

I Comparability (incl. Consistency)

J Representational faithfulness

K Relevance

L Materiality

M Conservatism

Provide the letter corresponding to the SINGLE, PRIMARY assumption, principle, or qualitative characteristic that corresponds with each of the following statements. Hint: Use only one of these concepts (letters) twice.

1. A company’s FS footnotes provide a detail listing of items comprising total selling and administrative expense, reported only in total within the income statement.

2. A company’s FS exclude the separate assets, liabilities, and operating results of a business in which it holds a 10 percent equity interest and over which it does not exercise significant influence.

3. Management prepares a company’s FS using the accrual basis of accounting.

4. A company’s interim FS include an accrual for part of anticipated yearend manager bonuses, even though interim (mid-year) income has not reached the mandated minimum required for any bonuses.

5. A company adopts properly designed internal controls over the approval and processing of transactions recognized in its accounting systems and tests the efficacy of those controls annually.

6. A company’s FS describe the assumptions managers used to determine the amounts of inventory and accounts receivable valuation allowances recognized in the balance sheet.

7. In its income statement, a company reports total sales in terms of their value, rather than their physical attributes (e.g., number of units, volume, weight, function, etc.)

8. A company presents its recognized assets and liabilities in a classified balance sheet, rather than an expected order-of-liquidation balance sheet.

9. A company recognizes product manufacturing costs as inventory (in the balance sheet) until it sell the related goods.

10. A company defers immediate recognition of profit from customers’ purchases of annual memberships even though customers’ annual dues are paid in advance and not refundable.

11. A company recognizes immediately a loss resulting from an anticipated adverse judgment in a lawsuit by an injured employee, but does not recognize the anticipated recovery under a related insurance policy.

12. Management decided not to correct a company’s FS for a prematurely recorded sale that it discovered immediately before it was to issue the FS because the overstatement represented 0.03% of total sales.

13. A company reports its obligation to repay bonds it issued a year ago at their principal balance (par value), even though the quoted market price of the company’s bonds has risen to 103% of par value.

14. In each of the past 3 years, a company applied the “percent of sales” approach to determine the amount of the provision (expense) for anticipated uncollectible accounts receivable recognized in its FS.

Reference no: EM131208062

Questions Cloud

Total taxable gifts that lanny made in the current year : Lanny won $10 million at a casino 2 years ago and invested in mutual funds. When he married Judy last year, they signed prenuptial agreements. Then, in the current year, Lanny decided to give away some of his money. He made the following gifts: $100,..
Compute activity rates for an activity-based costing system : Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company’s five activity cost pools: Compute activity rates for an activity-based ..
Buy the small fitting and start manufacturing timing unit : Waterways has discovered that a small fitting it now manufactures at a cost of $1.00 per unit could be bought elsewhere for $0.82 per unit. Waterways has fixed costs of $0.20 per unit that cannot be eliminated by buying this unit. Waterways needs 460..
What is the hierarchy of data in database model : Each DBMS has many databases holding data, and each database is usually entirely independent of every other database. What is the hierarchy of data in database model? Please provide an example for a particular accounting application.
Desired qualitative characteristics of financial reporting : Demonstrate your ability to identify the basic assumptions, principles, and desired qualitative characteristics of financial reporting and accounting information. Listed below are the accounting assumptions, principles, and qualitative characteristic..
What income and losses do redfern-blackfoot-rod-kurt report : Redfern Corporation, a calendar year taxpayer, has been an S corporation for several years. Rod and Kurt each own 50% of Redfern’s stock. On July 1 of the current year (assume a non-leap year), Redfern issues additional common stock to Blackfoot Corp..
About the lean operations : Identify each of the following as a characteristic of ABM or lean operations:
What is the amount of sea corps net operating loss : During the current year, Sea Corp reported gross income from operations of $100,000 and operating expenses of $150,000. Sea Corp also received dividend income of $90,000 from a domestic corporation in which Sea is a 20% shareholder. What is the amoun..
Transactions for the village of sycamore general fund : For each of the summarized transactions for the Village of Sycamore General Fund, prepare the general ledger journal entries.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd