Give an example of situation to show how a business adheres to each of the following accounting principles: Historical cost Revenue recognition
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Give an example of situation to show how a business adheres to each of the following accounting principles:
- Historical cost
- Revenue recognition
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- What are the key differences between financial accounting and managerial accounting?An internal accounting system should: a. provide information to enable costs to be minimized b. provide financial accounting data for external reporting purposes c provide management accounting information for decision-making d. provide data for tax purposes e. all of the aboveWhat are some of the accounting information costs? What are some advantages of accounting data? Describe the cost-benefit considerations to consider when proposing new accounting rules.
- An accountant must be familiar with the concepts involved in determining earnings of a business entity. The amount of earnings reported for a business entity is dependent on the proper recognition, in general, of revenues and expenses for a given time period. In some situations, costs are recognized as expenses at the time of product sale. In other situations, guidelines have been developed for recognizing costs as expenses or losses by other criteria. Instructions a. Explain the rationale for recognizing costs as expenses at the time of product sale. b. What is the rationale underlying the appropriateness of treating costs as expenses of a period instead of assigning the costs to an asset? Explain. c. In what general circumstances would it be appropriate to treat a cost as an asset instead of as an expense? Explain. d. Some expenses are assigned to specific accounting periods on the basis of systematic and rational allocation of asset cost. Explain the underlying rationale…which manner the manager behave when choosing a particular accounting method to increase the reported income a. efficient manner b. opportunistic manner c. non d. both efficient and opportunist mannerWhat are some of the costs of providing accounting information? What are some of the benefits of accounting information? Describe the cost-benefit factors that should be considered when new accounting standards are beingproposed.
- What are some of the expenses associated with the provision of accounting data? What are some of the advantages of having accounting information on hand? Describe the cost-benefit considerations that should be taken into account when new accounting standards are being evaluated.What are the factors that accountants should consider when setting up company accounting policy relating to PPE.Define accounting profit
- Using accounting vocabulary Consider the following accounting terms and definitions, and match each term to the definition:Describe the conceptual framework of accounting principles.The following is a list of accounting assumptions and principles that have had an important impact on the development of generally accepted accounting principles and statements describing certain accounting practices. A. Reporting entity B. Going concern C. Period of time D. Historical cost E. Monetary unit F. Recognition G. Accrual accounting H. Revenue recognition I. Expense recognition J. Conservatism Required: Select the accounting assumption or principle that justifies each accounting practice and select the appropriate letter on each statement. 1. To provide timely information, companies prepare and report financial statements at the end of each year. 2. Appropriate recognition when a company consumes economic resources in conducting business operations. 3. Accounting measurements for U.S. companies are reported in dollars. 4. The financial statements represent the business, rather than its owners. 5. In the absence of evidence to the contrary, the business can be reasonably…