Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
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Chapter 6, Problem 1BIC
90907-6-1BIC
To determine
Advice Company S to get better of accounting quality.
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REQUIRED:
You are required to prepare a reflection paper that incorporates your answers to the following questions:
1. Why are financial statements important? What problems can you foresee if a business manager does not
have a basic knowledge of financial statements?
Adapted from:
Price, J., Haddock, M., & Farina, M., (2021). College Accounting, 16th edition. McGraw-Hill Education.
2. Your friend is thinking of ways to lower tax by lowering the net income using the following means:
Do not adjust for accrued revenue for any earned revenues, cash is not collected anyway.
Adjust the full amount of prepaid expense as expenses even if not yet used.
Explain to your friend the accounting implications and ethical considerations of her idea.
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For this intro accounting class, Are there any study tips you have used in this class and past classes that were particularly
effective? Are there any habits you have used in prior courses that made you more successful? Provide a habit you found
that you have not used before, that you think might help you in your classes?
A friend asks you about whether GAAP requires companies to disclose forecasts of financial variables to external users. She thinks that information could be very useful to investors.Required:1. What are the two primary qualitative characteristics of accounting information?2. Does GAAP routinely require companies to disclose forecasts of financial variables to external users? Indicate yes or no and explain how your answer relates to the qualitative characteristics of accounting information.
Chapter 6 Solutions
Financial Reporting, Financial Statement Analysis and Valuation
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- For each of these itens, list the assumption, principle, information characteristic, or convention that is violated. Write your Learning Task 4: Below are a number of accounting proccdures and practices in Prospere General Merchandise. answer in your notebook. ác company prepares financial reports are based on the SFAS promulgated by the ASC. 4. The assets and owner's couity are reported at fair value but business obliga tions are reported at historical cost. 3. The company maintains only one employee to function as accountant, inter- nal auditor, collector and treasurer. 4. The financial reports are always delayed. 5. Due to recession, estimated future earnings are reported in the current finan- cial reports of Prospere General Merchandise. 6. The accounting methods and procedures used are regularly changed semi- annually. 7. The accountant records transactions as desired by the owner without proper supporting documents. 8. The financial reports do not include minutes of the meeting,…arrow_forwardIdentify the various users of accounting information and state how this information can benefit them. Your response should be no more than one page or no more than 200 words. It must reflect evidence of research. 2. Post your reflection in the student tutor exchange forum and critically respond to the posting of one of your peers.arrow_forwardHow can the enhancing characteristic understandability be improved in high-quality accounting information? Do not simply repeat what it is, provide suggestions as to how a particular part of the enhancing characteristic could be improved. Please provide different answers and explanations than copy and pasting: “Information that is understandable to the average user of financial statements is highly desirable.”arrow_forward
- What are the best accounting and finance resources? Note: I want to know the best accounting and finance learning resources that I can study from and refer to in case I want to relearn something related to finance or accounting again.arrow_forwardRelevance versus Faithful RepresentationYou are listening to two accounting majors, both of whom are seniors.They are debating the merits of having relevant versus faithfullyrepresented accounting information for external decision making. One student states, "In my decision making, if given a choice betweenrelevant and representationally faithful accounting information, I wouldprefer to have relevant information." The other student replies, "Nonsense! If you cannot rely on the information, then of what use is it?"Required: Based on your knowledge of the FASB's Conceptual Framework, define the qualitative characteristics of relevance and faithful representation.Include definitions of the ingredients of each. Which do you think ismore important?arrow_forwardWhy shall accounting students need to study accounting theory? Choose one of accounting theories you have learned in ACC202 Accounting Theory, such as agency theory, an alternative accounting system, efficient market hypothesis, etc., reflect on what benefits you have obtained from learning this theoryarrow_forward
- select a “start-up” company in an industry of your choice and provide a brief summary description of the start-up company you chose and the goods or services it provides. 1. As a start-up company, identify three Credit Risks the company currently faces today or could face in the future. Explain in detail why these risks are a threat to the company. 2. What advice would you give to the CEO of the company to prevent or minimize these credit risks?arrow_forwardAnswer the following question and provide detail examples to support your answer. Analyze and make an assessment of the International Accounting Standard Board's (ASB) Conceptual framework 2018 by highlighting its strength and flaws. Afterward, state how would improve it in order to further enhance the relevance and reliability of financial reporting. 2. a) Define the concept of research methodology in the context of accounting theory. Discuss the consequences of choosing an incorrect research methodology in accounting research, highlighting the strengths and limitations of quantitative and qualitative approaches to accounting research. b) Evaluate the role of accounting theories in guiding research in the field of accounting. Discuss how different accounting theories, such as agency theory, positive accounting theory, and institutional theory, influence research questions, hypotheses formulation, and empirical analysis are from each other, highlighting their strengths and…arrow_forwardAccounting professionals apply many technology tools to aid them in their everyday tasks and decision making. The General Ledger tool in Connect automates several of the procedural steps in the accounting cycle so the accounting professional can focus on the impacts of each transaction on the full set of financial statements. use this tool in helping students see the advantages of technology and, in particular, the power of the General Ledger tool in accounting practice, including financial analysis and “what-if” scenarios. How much are total expenses for Apple for the current year?arrow_forward
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