Generally Accepted Accounting Principles And Sample Test...

Generally Accepted Accounting Principles and Sample Test...
ACCY111 / SAMPLE TEST PAPER Q & A
MULTIPLE CHOICE QUESTIONS (Answers are on page no 16 onwards) Q. What is the primary objective of most businesses? a. To
maximize profits b. To pay dividends to stockholders c. To provide a benefit to society d. To manufacture a quality product ANS:
Q. When a business borrows money, it incurs a(n) a. tax. b. liability. c. receivable. d. addtional equity. ANS: Q. When a product is
sold, this cost is often called a. cost of goods sold. b. revenue. c. products. d. retained earnings. ANS: Q. The financial resources a
business owns are called a. assets. b. liabilities. c. earnings. d. stockholders' equity. ANS:
Q. Rights to receive money from customers are a. liabilities. b. prepaid expenses. c. accounts ... Show more content on
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b. balance sheet. c. statement of cash flows. d. retained earnings statement. ANS:
Q. The debt created by a business when it makes a purchase on credit is referred to as an a. account payable. b. account receivable. c.
asset. d. expense payable. ANS:
Compiled by Manek. 2011.
P age |4
ACCY111 / SAMPLE TEST PAPER Q & A
Q. If there was 10,000 O equity at start, net income of $20,000, and O equity at end of $16,000, how much were withdrawn? a.
$10,000 b. $4,000 c. $6,000 d. $14,000 ANS:
Q.During 2010, Smith Corporation had an increase in total assets of $70,000 and an increase in total liabilities of $90,000. Assuming
that capital introduced by $5,000 and no money withdrawn, calculate Smith's net income or net loss for 2010. a. Net loss of $15,000
b. Net loss of $20,000 c. Net loss of $25,000 d. Net income of $15,000 ANS: Q. The "rules" of accounting are called a. income tax
regulations. b. SEC regulations. c. Internet rules. d. Generally Accepted Accounting Principles. ANS:
Q. Which principle determines the amount initially entered into the records for purchases? a. Cost principle b. Going concern concept
c. Business entity concept d. Objectivity concept ANS:
Q. Expressing financial data as if a business will continue operating for an indefinite period time refers to which concept? a. Business
entity concept b. Going concern concept c. Objectivity concept d. Adequate disclosure concept ANS:
Compiled by Manek. 2011.
P age |5
ACCY111 / SAMPLE TEST PAPER Q
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General Accepted Accounting Principals Essay
Generally Accepted Accounting Principles Health care organizations financial statements are the key tools to show the economic
stability of an organization and guide leadership in making informed decisions. The Generally Accepted Accounting Principles
(GAAP) is basic assumptions, and principles of accounting to determine the financial position of an organization. These principles
offer consistency across health care organizations, and businesses maintaining track of the organizations fiscal returns, detailed
balance, and outstanding debt. Generally Accepted Accounting Principles help guide health care organizations through the economic
framework of accounting (Finkler & Ward, 2006). Over the next several pages I plan to discuss the ... Show more content on
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Cost Principle The accounting for purchases of a health care organization must be at cost price and not the fair market value at time of
purchase. An example, if an asset is purchases, entering the price paid for the purchases is considering be base for all future
accounting.
Object Evidence Principle This principle states accounting will be on the basis of objective evidence. If different people are looking at
the evidence all will arrive at the same conclusion for the transaction. This means objective accounting entries on facts and not
personal feelings, or opinions. The source document for transactions is usually the best objective evidence available (Finkler & Ward,
2006).
Materiality Principle Materiality principle allows accountants to use generally accepted principles for determining immaterial cost in a
budget. An auditor tracking individual staples or gem clips is a mundane task; materiality permits certain transactions to be left out of
the organizations financial statement because of the insignificance (Cleverly & Cameron, 2007).
Consistency Principle Health care organizations using the consistency principle refers to the state of accounting rules, concepts,
principles, and practices consistently. When consistency is there, the results and stability of information from one period to the next
auditors can easily make comparisons. If a change in accounting methods occurs

What Are Generally Accepted Accounting Principles?
Introduction
The case centers on actual events that occurred in the Roman Catholic Archdiocese of New Orleans from 2001 to 2009. In 2008, the
archdiocese announced that it had lost more than $100 million as a result of Hurricane Katrina – because insurance failed to cover all
its property losses. Those losses had no bearing on the parish a closure, the church says. Not all the faithful are convinced. Later
released prospectus indicated that the Archdiocese paid over $10 million directly from its own assets to settle claims of sexual abuse,
and these payments were not part of financial statement or notes. Due to unauthorized expenditure parishioners and media questioned
about Good Counsel's. Good Counsel's parishioners were very ... Show more content on Helpwriting.net ...
2. Consider Exhibits 2 and 3. Do you find any errors, ambiguities, or questionable line items?
Exhibit 2 and 3 showed the balance sheet and income statement of the Archdiocese of New Orleans. There are error in the balance
sheet and income statement. In this balance sheet, shareholder equity was not mentioned, so it is very difficult to calculate the return
on equity and debt to equity ratio. This information is very important, the organization need it to pay its debt in future. There are little
ambiguities in the current assets and liabilities figure (doubtful receivables).
3. Does the Financial Report include a full set of financial statements? Explain to Cheron and Harold why it is important to have a full
set of financial statements.
Financial statement includes such as balance sheet, income statement and cash flow as well as related statement with them. The
financial statement should contain all the formal data of the financial activities of business, person and other entity. Since there are
over $10 million expense were only mentioned in prospectus but not in the financial statement, the Financial Report does not include
a full set of financial statements.
Financial statement measures the financial performance, liquidity and strength of the firm, it is important

Generally Accepted Accounting Principles and Substantive...
PRAIRIE TECHNOLOGY PARTNERS Planning Memo December 31, 2011 We have been retained as continuing auditors for Prairie
Technology Partners (PTP) for the year ending December 31, 2011 Engagement Objectives * Provide our report on the examination
of PTP's financial statements by February 5, with year–end fieldwork to begin January 14, 2012 * Issue our management letter
comments by February 10, 2012 Preliminary Analytical Review Briefly describe the results of your analytical procedures. Print this
memo as an outline, then compose your answers as attachments in your wordprocessor. Describe any unusual or unexpected
relationships ... Show more content on Helpwriting.net ...
We chose 5% for our basis because of the loan covenant. Study of Internal Control Briefly summarize the key facts you noted in your
study of the five components of internal control and the rationale for the conclusions you made in the audit program concerning
whether each component was adequately designed and implemented. The design and implementation and objectives of company
controls are not adequate to meet the control objectives. The control environment control objective is ineffective. This control
objective lacks a written policy on ethical conduct, is lacking oversight from the board of directors and audit committee, lacks a
consistent style and philosophy from management, and lacks a strong commitment to competence. The risk assessment control
objective is effective but lacks any antifraud program and controls. The information and communication control is ineffective. A virus
has been detected and is affecting the files of the company. This control is lacking a strong IT department. The general controls
financial reporting control objective is effective but is weak in detecting or preventing material misstatement. The monitoring control
objective is ineffective; this control has need of an internal auditor. Summary of Team Meeting about RMM Including Fraud Conduct
a team meeting and write a brief summary here including the date, who attended, what was discussed, and any conclusions drawn.
Prior–Year Working Papers Last year's

Generally Accepted Accounting Principles Essay
GAAP for Health Care The mutual set of accounting criteria used to develop medical centers financial statements are known as
generally accepted accounting principles (GAAP). GAAP are a mixture of respected criteria created by Securities and Exchange
Commission (SEC) and accountants. The SEC has authority granted by The Securities Act of 1933 and the Securities Exchange Act of
1934, to determine reporting and disclosure requirements. Oversight is the general functions of the SEC, granting the Governmental
Accounting Standards Board (GASB) to determine the standards. Generally accepted accounting practices are required for accountant
to follow and medical centers to use so medical centers and provide investors with a minimal ... Show more content on
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Since there is a discrepancy, the production department will need to presents undeniable proof to authentication the appraisal, the
medical center auditor has a duty to adhere to the conservatism principles and prepare for the five–percent rate return. Losses and
costs are documented when they are credible and equitably estimated. Profits are documented when achieved (Finkler & Ward, 2006).
Matching principle. The medical center expenditures for providing safe patient care should be documented with the corresponding
fiscal year in which the income was produced. Documented in the same fiscal year as the income they help to generate. An illustration
of this particular cost is the cost of products sold in the medical center, salaries paid to staff. It is consider when patients are admitted
to the medical center and the supplies used to provide safe quality care. Revenue is recognized when reimbursed by Medicaid and
Medicare (Finkler & Ward, 2006). Cost principle. The dollar amount deducted from the budget to purchase land, medical equipment,
and supplies. Assets are documented at price purchased, which is equivalent to the price paid to gain acquisition. When a medical
centers assets such as property or office structures increase in worth each fiscal year, reappraisal in not required for financial reporting
purposes (Finkler & Ward, 2006).

Nur 571 Generally Accepted Accounting Principles
Generally Accepted Accounting Principles
Amy Santus RN BSN
HCS/571
October 3, 2011
Debra Vaughn
Increasing pressures of cutting costs and improving the quality of care in health care services influences the management of the health
care organization to implement the generally accepted accounting principles (GAAP) within their daily routines. Generally accepted
accounting principles (GAAP) are a set of uniform accounting guidelines health care organizations follow to determine the financial
position of an organization. According to Finkler, Kovner, and Jones (2007) the most common and important GAAP are as follows:
(a) Entity concept, (b) Going–concern concept, (c) Matching principle and cash versus ... Show more content on Helpwriting.net ...
However, the materiality principle assists the professional judgment of a manager with these challenges on deciphering whether or not
to deem an item as material. Usually if an item has an impact on the income, or affects the decision making of the professional using
the financial statement, the item is material. Another GAAP is the full disclosure principle. This principle states that it is imperative to
include all information in a financial statement of an entity that would affect the reader's understanding of the statements. This
principle also includes the reporting of any current accounting policies as well as any changes of them. The last GAAP is the
consistency principle. The consistency principle suggests that once an organization agrees upon the utilization of an accounting
principle or method, they should consistently use the same method for future fiscal years. This will provide a more accurate
comparison for the individuals dealing with the massive amounts of numbers and transactions each fiscal year. In conclusion, a health
care organization's primary focus may be to provide quality care services; however the financial wellbeing and viability is critical to
meet that focus. "A substantial portion of U.S. Generally Accepted Accounting Principles (U.S. GAAP) applies specifically to
reporting entities that are involved in the business of healthcare. Therefore, the generally accepted accounting principles were
developed as a set of

Generally Accepted Accounting Principles
Generally Accepted Accounting Principles (United States)
In the U.S., generally accepted accounting principles, commonly abbreviated as US GAAP or simply GAAP, are accounting rules
used to prepare, present, and report financial statements for a wide variety of entities, including publicly–traded and privately–held
companies, non–profit organizations, and governments. Generally GAAP includes local applicable Accounting Framework, related
accounting law, rules and Accounting Standard.
Similar to many other countries practicing under the common law system, the United States government does not directly set
accounting standards, in the belief that the private sector has better knowledge and resources. US GAAP is not written in law,
although ... Show more content on Helpwriting.net ...
This principle allows greater evaluation of actual profitability and performance (shows how much was spent to earn revenue).
Depreciation and Cost of Goods Sold are good examples of application of this principle.
Disclosure principle. Amount and kinds of information disclosed should be decided based on trade–off analysis as a larger amount of
information costs more to prepare and use. Information disclosed should be enough to make a judgment while keeping costs
reasonable. Information is presented in the main body of financial statements, in the notes or as supplementary information
[edit] Constraints
Objectivity principle: the company financial statements provided by the accountants should be based on objective evidence.
Materiality principle: the significance of an item should be considered when it is reported. An item is considered significant when it
would affect the decision of a reasonable individual.
Consistency principle: It means that the company uses the same accounting principles and methods from year to year.
Prudence principle: when choosing between two solutions, the one that will be least likely to overstate assets and income should be
picked (see convention of conservatism).
Generally Accepted Accounting Principles (UK)
The Generally Accepted Accounting Practice in the UK, or UK GAAP, are the overall body of regulation establishing how company
accounts must be prepared in the United

Generally Accepted Accounting Principles and Net Income
1. According to the cost allocation methods used in the company's accounting system that are described in the Production Cost
Report, if a company employs 100 PATs at a total labor cost of $15,000,000 (including wages, fringes, incentives, overtime, training,
and severance expenses), assembles and ships 800,000 entry–level cameras and 200,000 multi–featured cameras over the course of a
year, has revenues of $100 million from sales of entry level cameras, and revenues of $150 million from the sale of multi–featured
cameras, then the total annual labor costs allocated to the assembly and shipment of multi–featured cameras and the labor costs per
multi–featured camera assembled and shipped, respectively, will be None of these. ... Show more content on Helpwriting.net ...
80% of the $7 million in advertising expenditures for Latin America will be allocated to the costs of advertising for entry–level
cameras in Latin America and 20% will be allocated to the costs of multi–featured cameras. 75% of the $7 million in advertising
expenditures will be allocated to the costs of advertising for entry–level cameras in Latin America and 25% will be allocated to the
costs of multi–featured cameras. 50% of the $7 million in advertising expenditures in Latin America will be allocated to the costs of
advertising for entry–level cameras and 50% will be allocated to the costs of multi–featured cameras. 7. Which of the following is not
an action company co–managers can take to boost a subpar ROE? Decrease the dividend payment so as to boost the amount of
earnings retained in the business Use available cash (or perhaps borrow against the company's line of credit) to repurchase shares of
stock Strive to boost the company's net income Increase dividend payments so as to reduce the amount of net income retained in the
business (retained earnings act to increase equity investment and thus dampen ROE) None of these 8. According to explanations
provided on the Help screens for the Production Cost Report, if a company pays a PAT member a base wage of $18,000, a $50
quarterly bonus for perfect attendance, and annual fringe benefits of $3,000, if a PAT is paid a $1 incentive bonus per camera
assembled, and if

GAAP Or Generally Accepted Accounting Standards Board (FASB)
GAAP or Generally Accepted Accounting Principles are set by the Financial Accounting Standards Board (FASB), an organization of
accountants, financial analysts, and regulators who draw up accounting practices to meet ongoing changes in the markets. Every time
some new issue arises, the FASB studies the problem, develops a proposed accounting procedure, and sends it for review and
comment to different users of financial statements, including corporations and analysts (Logue, n.d.). IFRS or International Financial
Reporting Standards is a set of accounting standards developed by an independent, not–for–profit organization called the International
Accounting Standards Board (IASB). It is also the common accounting standard used by over 110 countries around the world. GAAP
is generally used in the U.S., though the SEC Commission Chief proposed supplemental use of IFRS for statement reporting, which
was eventually quashed (Cohn, 2015). FASB is considering a new format of globally accepted principles and reporting standards to be
decided upon. It has been said that conceptually IFRS is more of a principles based accounting standard, while GAAP is more of a
rules based accounting standard (Nguyen, 2010). There are both advantages and disadvantages to switching to IFRS from GAAP.
Some advantages are: comparisons to foreign companies will be that much easier, and raising capital through foreign nations will be
made easier because investors are used to seeing financial statements

Part I.
A. Generally Accepted Accounting Principles. GAAP is not a fixed set of rules. It is a guideline or more precisely a group of
objectives and concepts that have evolved over 500 years from the basic concepts of Luca Pacioli set forth in the 1400s. It governs
how financial statements are prepared and presented in the United States. The Financial Accounting Standards Boards (FASB), the
American Institute of Certified Public Accountants and the Securities and Exchange Commission (SEC) provide guidance about
acceptable accounting practices. Some of the reasons we use GAAP are that any business that expects anyone from outside their
company to look at their financial data needs to use GAAP. Compliance with GAAP helps maintain ... Show more content on
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For example, a tract of land which was purchased 50 years ago for $10,000 may be worth $1 million today, but it will be recorded on
the balance sheet at its historical cost of $10,000. The historical cost principle is used because of its reliability and freedom from bias
when compared to the fair market value principle.
C. Accrual Basis vs. Cash Basis Accounting. In accrual basis accounting, income is reported in the fiscal period it is earned, regardless
of when it is received, and expenses are deducted in the fiscal period they are incurred, whether they are paid or not. In other words,
using accrual basis accounting, you record both revenues and expenses when they occur. The difference between the two types of
accounting is when revenues and expenses are recorded. In cash basis accounting, revenues are recorded when cash is actually
received and expenses are recorded when they are actually paid (no matter when they were actually invoiced).
D. Current Assets and Liabilities vs. Non–Current items. Before you go into this first you must know what the definition of assets is.
Assets equal things of value. Three requirements of an asset are, it has to be controlled by the entity, valuable to the entity and have
measurable costs. Controlled by the entity basically means the item has to be owned, like rental space, employees and contracts for
valuable people. Valuable

Accrual: Generally Accepted Accounting Principles and Revenue
Accrual concept Accrual Concept is a fall–out of Accounting Period concept. This concept requires that expenses incurred for a
particular accounting period should be reckoned in the same period, irrespective of the fact whether these expenses have been paid in
cash or not in that year. The same holds true for revenues, i.e., revenues earned in a specific accounting period are construed as
incomes of the same period, irrespective of their receipts. This concept is also known as the accrual theory of accounting or accrual
accounting. This concept applies equally to revenues and expenses. In the accrual basis of accounting Revenue is recognized when it
is realized, that is, when the sale is complete or not. Similarly, the expenses are ... Show more content on Helpwriting.net ...
Realization Concept Revenues are recognized when goods and services are delivered and in an amount that is reasonably certain to be
realized" There are two important dimensions to this principle, i.e. when revenue is recognized, and whether it is certain that all
revenue will eventually be collected. If the accountant believes that based on past experience only 90% of revenues will be collected,
then the accountant will create an "allowance for doubtful accounts". The income or the profit of a business is defined as "The
increase in Net Assets measured by excess of Revenues over Expenses." The term Net Assets means excess of Assets over Liabilities.
Revenues result from the sale of goods and services and include gains from the sale and exchange of assets other than inventories,
interest and dividends earned on Investments and other increases in owners' equity during a period other than capital contribution and
adjustments. A major problem in the determination or measurement of Income is related to the point at which the revenue is
recognized. It is possible to recognize the revenue at different points in the production/selling levels. Example: * When cash is
received from the customer * When an order is received from a customer * When the goods are produced * When the goods are
delivered to a customer and accepted by him It must be clearly

Timberlands: Generally Accepted Accounting Principles and...
IFRS for U.S. Timber Industry
INTRODUCTION This memorandum will address issues raised by the transformation from U.S. Generally Accepted Accounting
Principles (US GAAP) to International Financial Reporting Standards (IFRS) in the timber industry. I will cover the following topics:
different accounting treatment under U.S. GAAP and IFRS, the influence on investment decisions, Plum Creek's reason for the
opposition against transformation, and conclude with my preferred accounting treatment under different roles. ACCOUNTING
TREATMENT The concern is mainly on recognition of the value of standing timberlands. Under US GAAP, standing timber is
accounted for on a historical cost basis. On the other hand, the relevant accounting ... Show more content on Helpwriting.net ...
In such a long term, a snowball effect will probably incur on the fair value estimates based on small changes in assumptions, making
the estimates inaccurate and meaningless. Plum Creek further reasons that reporting standing timber at fair values does not improve
comparability. To support this argument, they again bring up the extensive and numerous assumptions required in estimating the fair
value of standing timber. They argue those estimates are not likely to be consistent among companies and companies will not all
revise estimates in the same reporting period. However, in my opinion, this concern can be addressed by FASB's regulation. The
legislator will establish a detailed document listing standards of timberland value estimation and force the industry to implement it
before a certain point of time. So, Plum Creek's this argument is unreasonable. In addition, the company believes the cost to compute
the fair value of standing timber far outweighs any benefit. There will be extensive documentation and auditing requirements for the
company in order to shift to fair value accounting method. Plum Creek estimates that an annual appraisal of their standing timber
could be twice as high as they are currently paying for the annual audit of financial statements. Indeed, the nature where timber grows
varies and the annual appraisal must be extensive and costly. I find this argument compelling and I believe to avoid more cost is the
real reason

Essay about Generally Accepted Accounting Principles
There are general rules and concepts that preside over the field of accounting. These general rules, known as basic accounting
principles and guidelines, shape the groundwork on which more thorough, complex, and legalistic accounting rules are based. The
Financial Accounting Standards Board (FASB) uses the basic accounting principles and guidelines as a foundation for their own
comprehensive and complete set of accounting rules and standards. GAAP is exceptionally useful because it attempts to regulate and
normalize accounting definitions, assumptions, and methods. Because of generally accepted accounting principles one is able to
presuppose that there is uniformity from year to year in the methods that are used to prepare a ... Show more content on
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One explanation of why firms might choose to put into practice conservative accounting practices lies in efficient contracting theory,
for example, conservative accounting can be used as part of a firms strategy to ease the conflicts that arise among the many claimants
of a firm's net assets. This is because conservative accounting methods place restrictions on the distribution of those net assets thereby
limiting the scope for self–serving opportunistic behavior. Conservative accounting can also help in bringing into line the interests of
managers and shareholders through its impact on accounting earnings measures that are regularly used in management compensation
contracts (Iyengar & Zampelli, 2010). The literature on conservatism accounting is very limited. Watts (2003), has suggested that
conservatism is related to debt contracts, while Gjesdal & Antle (2001) suggest that conservatism is the interaction between income
measurement and dividend covenants. Even though conservatism may be most favorable, the result derives from shareholders trading
off cash flows in different periods, not from the need to protect the interests of creditors. Another theory used in accounting is that of
Materiality. This notion necessitates that accounting centers on material facts and not on facts that are immaterial to figuring revenues.
Only transactions that have monetary

Generally Accepted Accounting Principles and Capital...
AirThread
Valuation of AirThread
This case deals with the valuation of AirThread Connections Business (ATC) from the perspective of its potential acquirer, American
Cable Communication (ACC). ACC is a large cable operator which serves the video, internet and landline telephony needs of millions
of users across America. However it is recently looking to acquire ATC which is one of the largest wireless companies in the United
States. This acquisition will bring with it certain synergies that both can benefit from, which is primarily the reason behind the
valuation requirements of AirThread.
Methodological approach to value AirThread
American Cable Communication is interested in raising significant capital following the Leveraged Buyout ... Show more content on
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Using the other data provided in Exhibit 1 of the case study, we can calculate the Un–Levered Free Cash Flow for ATC during the
period 2008–2012 as shown in the above table.
Discount rate calculation for AirThread
To calculate the discount rate for AirThread, we have looked at the industry Asset Beta (this measures the systematic business risk).
The Asset Beta for each firm is calculated using the formula βa= βe/1+(D/E)(1–t)
e.g. For Universal Mobile this value is computed as follows (we are using the tax rate as 40%)
0.86 / (1 + (0.923)(1–0.4) = 0.5534
The Industry average is simply the average of all the firms listed. Once we have the Asset Beta, we can calculate the Equity beta using
the following formula βe = βa/ (1 – (D/V))
The highlighted row represents the average Debt/Value ratio for the industry as seen in the previous table. Therefore the Unlevered
Cost of

Accepted Truism
History to the Victors, an Accepted Truism History is not always written by the winners of wars, however, most of the accepted
records are. "History is written by the victors," attributed to Niccolò Machiavelli, Winston Churchill and others, as we do not know
who originally said this truism. Every country has different historical views on the same topic, for example, the Iranian revolution and
the American Hostage Crisis. From a radical Shia's view, the revolution brought forth much wanted reforms. Yet from an American
view, the radicalists were in the wrong. The view of those around you affects the way you see. Conformity. History is written by the
survivors and historians, not the victors in particular. The losers also get their say in

Proforma: Generally Accepted Accounting Principles and...
Chapter 3 Lecture (Part III)
In addition to forecasting cash flows, managers and investors are also interested in forecasts of the firm's financial statements. These
projected financial statements are called pro forma financial statements. They give both the management and investors an insight into
what the financial statements will look like in the future and a signal as to any need to raise long–term funds.
The starting point in the creation of the pro forma financial statements is the construction of the pro forma income statement (do you
remember why?). Like the cash budget, it also relies heavily on the sales forecast. Significant errors in the sales forecast will result in
errors in the income statement which, in turn, ... Show more content on Helpwriting.net ...
To access the worksheet, double click on it, then scroll up or down as needed to see view the worksheets. I will make the following
assumptions regarding the pro forma balance sheet:
1. The firm wants to continue to maintain a minimum cash balance of $100,000
2. Marketable securities will increase to $75,000 in 2008.
3. Accounts receivable have historically been 36.5 days of sales. Since sales for 2008 are expected to be $12,000,000, accounts
receivable will be $12,000,000 x (36.5/365) = $1,200,000 (you could also do the following which is algebraically identical:
($12,000,000/365) X 36.5).
4. Inventories have historically been 20% of cost of goods sold. Since cost of goods sold for 2008 are expected to be $9,000,000,
inventories will be $9,000,000 x .20 = $1,800,000.
5. Vectra will increase fixed assets by $750,000. Depreciation expense for 2008 is estimated to be $200,000. Net fixed assets for 2008
will be:
Net fixed assets (2007) + additions to fixed assets – depreciation expense 2008
$5,000,000 + $750,000 – $200,000 = $5,550,000
6. Annual purchases (all on account) have historically averaged 60% of cost of goods sold. The accounts payable balance, in turn, is
typically 20% of purchases. Accounts payable will therefore be $9,000,000 X .60 X .20 = $1,080,000
7. Taxes payable will be approximately one quarter of the tax expense shown on the 2008

Gross Income Implications For The Individual Who Accepted...
Gross Income implications for the individual who accepted the bribe:
The definition of gross income per section 1 of the Income Tax Act for any resident is:
the total amount
in cash or otherwise
received by, or accrued to, or in favour of such resident
during such year or period of assessment
excluding receipts and accruals of a capital nature
The bribe of R300 000 meets all the aforementioned requirements of the gross income definition except for whether or not the amount
has been 'received by' the senior official during the year of assessment ending 28 February 2015.
The gross income definition requirement of 'received by' is not defined in the Income Tax Act and therefore the following case law
principles will be applied in determining whether the bribe, being illegal income, should be included in the individuals gross income
for the current year of assessment.
Cases:
An amount is 'received by' a tax payer if the taxpayer intended to receive the amount for his own benefit irrespective of the
legality(legal or illegal) of such amounts (MP Finance Group CC v CSARS (2007)).
The source of income, legal or illegal, is irrelevant in determining if an amount constitutes gross income. Moreover, illegal receipts
are taxable(CIR v Delagoa Bay Cigarette Co)
In order to constitute a 'receipt' for normal tax purposes, the taxpayer must have received the amount on his own benefit and for his
own behalf (Geldenhuys v CIR).
It can be deduced using the above

General Accepted Accounting Principles
Accounting Principles i
Running head: GENERAL ACCEPTED ACCOUNTING PRINCIPLES
General Accepted Accounting Principles
Accounting Principles ii
Abstract
My paper is about the GAAP (General Acceptance of Accounting Principles) which were created by the Accounting Principles Board
(APB). The board was created by American Institute of Certified Public Accountants (AICPA) in 1959. APB issued 31 Opinions from
1959 to 1973 and those Opinions created GAAP. I think GAAP is interesting due to how many companies think they can get away
with financial dealings but get caught. I also think that GAAP is a system that really needs a good looking at and maybe an overhaul.
Some people say the GAAP is dead and should be shelved ... Show more content on Helpwriting.net ...
In the United States, as well as other countries practicing English common law system, the government does not set accounting
standards, in the belief that the private sector has better knowledge and resources.
http://en.wikipedia.org/wiki/US_generally_accepted_accounting_principles
GAAPS are rules to be followed by every company and are shunned or misused by many more. That said GAAP is only a set of
standards. There is plenty of room within GAAP for unscrupulous accountants to distort figures. Some say that the GAAP
Accounting Principles 3
standards distort the true economic reality, produce unreliable corporate standards and serve as an unproductive compensation system.
GAAPS are not natural laws of physics or other sciences but instead are identified in response to the needs of users and others
affected by accounting. They are man–made rules that depend for their authority upon their general acceptance by the accounting
profession. (Pyle & Larson,1981).
GAAP include both broad and specific principles. The broad principles describe the basic assumptions and general guidelines that
accountants follow in preparing financial statements. The specific principles provide more detailed rules that accountants follow in
reporting results of various business activities. The broad principles stem from observing long–used accounting practices were as the
specific principles are established more often by the

Generally Accepted Accounting Principles and Premium...
Chapter 9 – Test 1 Note: Most questions can be placed in more than one of the four achievement categories. The achievement chart
designation provided here indicates the category that is predominant within the question. 1. For each of the following, choose the
most appropriate response. 1) A one–year insurance policy was purchased for $960 on July 1, 20–1. On December 31, 20–1, it had an
unexpired value of: a. $240. b. $480. c. $560. d. $400. e. none of the above. 2) The accountant did not prepare an entry to adjust the
Supplies account at the end of the accounting period and, as a result: a. the Supplies account was overstated. b. the total expenses
were understated. c. the net income was overstated. d. the ... Show more content on Helpwriting.net ...
3. The unexpired insurance at December 31, 20–2, amounted to $1 040. 4. a) Using the additional information above, complete the
eight–column work sheet. GST accounts are not to be considered. b) Prepare the four closing journal entries for Premium
Decorating as of December 31, 20–2. Omit explanations. 4. c) Assuming all entries have been posted, calculate the ending
Capital balance for Premium Decorating as of December 31, 20–2, in the account provided below. d) Prepare a post–closing trial
balance for Premium Decorating as of December 31, 20–2. 5. A company purchases equipment costing $50 000, which it expects
to last for 12 years and to have a salvage value of $2 000. a) Prepare a schedule of depreciation for the first five years using the
straight–line method. Year Straight–line Depreciation Depreciation Balance $50 000 1 2 3 4 5 b) For the same equipment, prepare a
schedule of depreciation for the first five years using the declining–balance method. Canada Customs and Revenue Agency's
prescribed rate for depreciation is 30%. Year Declining Balance Depreciation Balance $50 000.00 1 2 3 4 5 c) Repeat the same type of
calculations as in b) above, but this time assume CCRA's 50% rule is in effect. Year Declining Balance with 50% Rule Depreciation
Balance $50 000.00 1 2 3 4 5 6. Indicate which

Generally Accepted Accounting Principles Stephanie R. Stewart HCS/571 September 24, 2012 Anne Harney Finlon Generally
Accepted Accounting Principles Generally Accepted Accounting Principles (GAAP) are important ideas to understand when
discussing finances of any kind. It is important for all nurses, especially those in management roles, to understand financial concepts
and be involved in the budgetary process. This paper will help to create an understanding of GAAP, the purpose of the principles, and
how they relate to the health care industry today. Every profession tends to have a language specific to the profession or occupation.
The financial world is not immune to this language subset. The term Generally Accepted ... Show more content on Helpwriting.net ...
This specific concept examines the likelihood of whether the entity will still be operating tomorrow, next month, or next year. The
reason for examining this information is due to the value of organizational assets (Finkler, Kovner, amp; Jones, 2007). Assets of a
company that is not expected to be in business next month will have a different value than the assets of a company expected to be in
business for many years to come. For example, the value of the building where Shady Acres Nursing Home operates may be worth far
less if it is known the facility will be ceasing operation in a few weeks. The next tenet of GAAP is the matching principle and cash vs.
accrual accounting. As discussed by Finkler, Kovner, and Jones (2007), payment for services rendered is not always received in the
same year. Additionally, the cost of providing those services may also not be noted as paid in that same year. Inconsistencies can
occur as a result of the timing of income and expenses towards the end of a financial year. This GAAP rule helps to create consistency
by requiring income and expenses to be reported in the same year. An instance of this rule is when Shady Acres provides skilled
nursing care to Mrs. Smith for the month of December 2012. Though it is unlikely that Mrs. Smith's insurance will pay Shady Acres
any sooner than January 2013, the accountants at the nursing home must show that the income was received in 2012. Additionally, the

Generally Accepted Auditing Principles
There are many different types of audits including financial statements audit, the operational audit and the compliance audit. Either an
internal auditor or an external auditor from another firm can conduct these various audits. The American Accounting Association
defines auditing as a systematic process of objectively obtaining and evaluating the accounts of financial records of a governmental,
business, or other entity based on established criteria (www.referenceforbusiness.com, 2009). Essentially the review is done to
enable an accountant to assess the representations of management and to consider whether the financial statements conform to the ...
Show more content on Helpwriting.net ...
An operational audit is designed to examine the organizations activities to assess the performance of the business and to develop
various recommendations to improve the use of the business resources. Finally, a compliance audit is designed to determine whether
an organization is following established procedures or rules. The company that I currently work for conducts compliance audits to
ensure that businesses are adhering to their wholesale security agreement and are following all government rules and regulations. As
an auditor, it is my responsibility to adhere to all the policies that my company imposes on myself and to follow all government rules
and regulations while conducting the audit. The Sarbanes Oxley act has had many affects on audits of publicly traded companies. The
Sarbanes Oxley act is designed to protect investors of publicly traded companies because they are presumed to be at a further distance
from the management of the company and are therefore more vulnerable to inaccurate reporting. Title I of the Sarbanes Oxley act
creates an independent Public Company Accounting Oversight Board, which is under the Securities and Exchange Commission. The
PCAOB regulates, registers, inspects and oversees companies that audit publicly traded companies. Title II of the Sarbanes Oxley act
legislates the behavior of auditing firms. Its most important provisions

Essay about Generally Accepted Accounting Principles and...
REQUIREMENTS Part 1 – The Situation, Consolidation, and Interpretation This is an unusual type of corporate relationship. The
first set of questions will reinforce your understanding of the relationship and provide evidence on the pros and cons of consolidation.
1. Carefully reread the information provided about the corporate headquarters and the Development Agreement. Which company is
actually performing the research and development activities? Pharmco 2. Justify your response. Disco is obligated, via a
Development Agreement, to engage Pharmco to perform all of Disco's research, development, clinical testing activities related to
products under development. 2. Using the financial statements provided in Teaching ... Show more content on Helpwriting.net ...
The return on equity, profit margin return on assets ratios all decrease if they are consolidated. It appears very little incentive to
consolidate. o If Pharmco and Disco are not consolidated, then what should Pharmco's annual report disclose about Disco? Pharmco
has to disclose that they have contractual control of Disco. Part 2 – The Control Question The next set of questions will put you in the
auditor's chair, as you will judge whether Pharmco controls Disco using current GAAP guidance; these questions will also ask you to
determine the motivation for creating Disco. 1. The concept of control has a long and storied history, starting with the Committee on
Accounting Procedure's (CAP) Accounting Research Bulletin No. 51, Consolidated Financial Statements issued in 1959. This early
statement did not use the term control, but controlling financial interest. This was generally evidenced by ownership of a majority of
the voting shares, and over time, majority ownership became the de facto indicator of control. Within the last five years, the FASB has
addressed some of these issues regarding Variable Interest Entities and Research and Development Arrangements. Utilizing the FASB
Accounting Standards Codification (which may be accessed at http://aaahq.org/ascLogin.cfm using the USERNAME AAA52114 and
the Password Skt1wI3), identify the current definition of control, and evaluate whether Pharmco controls Disco after the LPO.

What Are Generally Accepted Accounting Principles?
Introduction
The case centers on actual events that occurred in the Roman Catholic Archdiocese of New Orleans from 2001 to 2009. In 2008, the
archdiocese announced that it had lost more than $100 million as a result of Hurricane Katrina – because insurance failed to cover all
its property losses. Those losses had no bearing on the parish a closure, the church says. Not all the faithful are convinced. Later
released prospectus indicated that the Archdiocese paid over $10 million directly from its own assets to settle claims of sexual abuse,
and these payments were not part of financial statement or notes. Due to unauthorized expenditure parishioners and media questioned
about Good Counsel's. Good Counsel's parishioners were very disappointed because they heard news about its closing. They didn't
accept clarification that is provided by archdiocese. They felt that Good Counsel's was solvent so they wanted to close it for finance
repairs.
1. What are generally accepted accounting principles (GAAP)? Has the Financial Report in Exhibit 3 been prepared in accordance
with GAAP?
Generally accepted accounting principles (GAAP) are the standard structure of the guideline for financial accounting. GAAP contain
balance sheet item sorting, share measurement and revenue recognition, organizations need to carefully scan their financial statement
when they use GAAP. When accountants record and summarize financial statement, they need to apply these standards into their
work. The Financial

Generally Accepted Accounting Principles and Revenue...
Revenue Recognition:
Case Study on
Caltron Computers, Inc.
Julie Mong
April 17 , 2010
1. In general, evaluate Caltron's revenue recognition policy and the quality of Caltron's earnings. Caltron Computers, Inc., a computer
hardware company, is publicly held with market capitalization amounting to over $450 million. Carlton's system designs enable their
mini–computer systems to measure up to the power of mainframes with small cost outlays. The accounting practices at Carlton
normally permit revenue recognition after the shipment of the computer systems. Peale, Gower and Quill, Carlton's auditors, are
worried about the accounting practices regarding revenue recognition of certain transactions during the ... Show more content on
Helpwriting.net ...
Further, acceptance could be either by means of an affirmative customer acceptance or on the customer not taking specific action to
reject the product shipments (Grant Thornton, 2010). In the instant case of Elegant Housing, Inc. neither has the affirmative customer
acceptance been received by Caltron Computers, Inc. nor has the 6 month trial period ending on May 15, 20X2 lapsed. In light of the
above circumstances and the revenue recognition provisions, it is recommended that the revenue of $400,000 should not be
recognized. Certain business situations necessitate that customers take title to the goods purchased, agree to pay for them and yet not
be in a position to accept delivery of the goods. In such cases, the sellers fulfill the manufacturing requirements and segregate the
goods in their warehouses so as to make the goods available to the customers for shipment. Such transactions are labeled 'bill and
hold' agreements (Grant Thornton, 2010). SAB 104 lays down the following conditions that should all be fulfilled to enable revenue
recognition in cases on non–delivery of goods: (1) The risks of ownership need to have been transferred to the purchasers, (2) The
customers have made commitments, preferably written, to procure the goods, (3) The purchasers call for the 'bill and hold'
transactions, (4) The buyers should be

General Accepted Principles
Generally Accepted Accounting Principles HCS/571 Generally accepted accounting principles, better known as (GAAP) discloses
statements and reports financial information dealing with businesses and organizations. They are rules made by the Financial
Accounting Standards Board (FASB) in which are commonly used in the health industry to maintain the decisions of the organization.
GAAP gives detailed information to investors about the budget of the organization and their debt. GAAP includes the most common
principles used in the health care setting. They are; the entity concept, going–concern concept, matching principle and cash vs. accrual
accounting, cost principle, objective evidence, materiality, consistency, and full disclosure ... Show more content on Helpwriting.net
...
Accountants are able to determine the accrual accounting by focusing on the matching principle (Finkler, Kovner, and Jones, 2007).
With the matching principle organizations and businesses are able to record expenses and revenues that were accumulated in the same
year to match. Accrual accounting is necessary because it gives a better explanation of expenses accrued annually. Cost principle The
cost principle is anything the business or organization purchases to get. For instance hospitals need equipment. After buying brand
new equipment over the years it will depreciate in value. The reported value will be known as a net book value because of the change
in cost over time (Finkler, Kovner, and amp;, 2007). Objective evidence Due to mishaps with the cost principle and inconsistency of
the balance sheet, objective evidence is used. Objective evidence is providing proof objectively of financially statements and expenses
by different groups of individuals that are expected to agree (Finkler, Kovner, amp; Jones, 2007). If a patient leaves the hospital
with a device or surgery, knowing how much in value the organization spent on the patient assets can help determine the precise
amount spent to receive it. Materiality Materiality relates to errors or discrepancies within the financial information. Having a hospital
to partner with another hospital and ask for help financial can affect the partnership if the financial information is unclear

Generally Accepted Accounting Principles (G.A.A.P)
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (G.A.A.P)
GAAP is an international convention of good accounting practices. It is based on the following core principles. In certain instances
particular types of accountants that deviate from these principles can be held liable.
The Business Entity Concept
The business entity concept provides that the accounting for a business or organization be kept separate from the personal affairs of its
owner, or from any other business or organization. This means that the owner of a business should not place any personal assets on the
business balance sheet. The balance sheet of the business must reflect the financial position of the business alone. Also, when
transactions of the business are recorded, ... Show more content on Helpwriting.net ...
If this is not done, the financial statements will not measure the results of operations fairly. The Cost Principle
The cost principle states that the accounting for purchases must be at their cost price. This is the figure that appears on the source
document for the transaction in almost all cases. There is no place for guesswork or wishful thinking when accounting for purchases.
The value recorded in the accounts for an asset is not changed until later if the market value of the asset changes. It would take an
entirely new transaction based on new objective evidence to change the original value of an asset.
There are times when the above type of objective evidence is not available. For example, a building could be received as a gift. In
such a case, the transaction would be recorded at fair market value which must be determined by some independent means. The
Consistency Principle
The consistency principle requires accountants to apply the same methods and procedures from period to period. When they change a
method from one period to another they must explain the change clearly on the financial statements. The readers of financial
statements have the right to assume that consistency has been applied if there is no statement to the contrary.
The consistency principle prevents people from changing methods for the sole purpose of manipulating figures on the financial
statements. The Materiality Principle
The materiality principle requires

Generally Accepted Accounting Principles and Tax Basis
f';fa;d'a;f',af;ag';sdagl.;gdlal,g;adl,g,gal;am,dblv .cv z,vz
mld;,ag,a;es'g.;'gad;a';ldg;gd;sal;,ger'fa,s.a;l,gdlag,dla,g;ewlwetp;lq4pewql,e;et,q;g,al,gal;g,dla;ew,tqleg,algm,eksgtmaq;,;'.E'S.AFD;Af?
D/A;T',;L,EL;On January 1, 2010, Ameen Company purchased a building for $36 million. Ameen uses straight–line depreciation for
financial statement reporting and MACRS for income tax reporting. At December 31, 2012, the carrying value of the building was
$30 million and its tax basis was $20 million. At December 31, 2013, the carrying value of the building was $28 million and its tax
basis was $13 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2013
was $45 million.On January 1, ... Show more content on Helpwriting.net ...
At December 31, 2013, the carrying value of the building was $28 million and its tax basis was $13 million. There were no other
temporary differences and no permanent differences. Pretax accounting income for 2013 was $45 million.On January 1, 2010, Ameen
Company purchased a building for $36 million. Ameen uses straight–line depreciation for financial statement reporting and MACRS
for income tax reporting. At December 31, 2012, the carrying value of the building was $30 million and its tax basis was $20 million.
for income tax reporting. At December 31, 2012, the carrying value of the building was $30 million and its tax basis was $20 million.
for income tax reporting. At December 31, 2012,

Generally Accepted Accounting Principles and Cash
financial accountingBBUS 2210 CHAPTER 3 JOURNAL ENTRIES AND ADJUSTING JOURNAL ENTRIES EXTRA
PROBLEMS DAILY JOURNAL ENTRIES Model trains for sale to toy stores are produced by Whistle Stop Incorporated, a small
manufacturing company. Whistle Stop also has a small service department that repairs customers' model trains for a fee. The company
has been in business for five years. At the end of the most recent fiscal year, November 30, 2011, the accounting records reflected
total assets of $500,000 and total liabilities of $200,000. During the current fiscal year ending November 30, 2012, the following
summarized events occurred: a. Issued additional common shares for $200,000. b. Borrowed $120,000 cash from the bank ... Show
more content on Helpwriting.net ...
The interest will be paid when the loan is repaid on September 30, 2013. f. In December, the 2012 property tax bill for $1,600 was
received from the city. The taxes, which have not been recorded, will be paid on February 15, 2013. g. On December 31, 2012, the
company completed the work on a contract for an out–of–province company for $7,900 payable by the customer within 30 days. No
cash has been collected and no journal entry has been made for this transaction. h. On July 1, 2012, the company purchased a new
hauling van. Depreciation for July to December 2012 estimated to total $2,750, has not been recorded. i. At December 31, 2012,
wages of $9,000 were earned by employees but not yet paid. The employees will be paid on the next payroll date, which is January
13, 2013. j. On December 1, 2012, the company collected two months' contract revenue of $4,500. At that date, Brokeback debited
Cash and credited Unearned Contract Revenue for $4,500. One–half of it has now been earned but not yet recorded. a. Brokeback
Towing Company | General Journal | Page 1 | a. | Insurance expense | 100 | | | Prepaid insurance | | 100 | | $600 x 6/36 = $100 | | | b. |
Office supplies expense | 700 | | | Office supplies | | 700 | | $1,000 – $300 = $700 | | | c. | Repairs expense | 800 | | | Accounts payable | |
800 | d. | Unearned contract revenue | 700

Generally Accepted Accounting Principles and Office Supplies
1.. A company earned $3,960 in net income for October. Its net sales for October were $22,000. Its profit margin is: 1.8%. 18%.
180%. 556%. $18,040 2. On June 30 of the current calendar year, Apricot Co. paid $8,200 cash for management services to be
performed over a two–year period. Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash
payment. The adjusting entry on December 31 for Apricot would include: A debit to an expense for $6,150. A debit to a prepaid
expense for $6,150. A debit to an expense for $2,050. A debit to a prepaid expense for $2,050. A credit to a liability for $2,050. 3.
Prior to recording adjusting entries, the ... Show more content on Helpwriting.net ...
The truck is estimated to have a useful life of 5 years and a salvage value of $5,600. The company uses the straight–line method of
depreciation. How much depreciation expense will be recorded for the truck during the first year ended December 31? $4,200. $4,760.
$4,950. $8,400. $9,520. 11. A company 's Office Supplies account shows a beginning balance of $540 and an ending balance of $460.
If office supplies expense for the year is $3,280, what amount of office supplies was purchased during the period? $2,820. $3,200.
$3,360. $3,740. $3,820. 12. A company recorded 2 days of accrued salaries of $2,100 for its employees on January 31. On February 9,
it paid its employees $8,400 for these accrued salaries and for other salaries earned through February 9. The January 31 and February
9 journal entries are: 1/31 Salaries Expense 2,100 Salaries Payable 2,100 2/9 Salaries Payable 8,400 Salaries Expense 2,100 Cash
10,500 1/31 Salaries Expense 2,100 Salaries Payable 2,100 2/9 Salaries Payable 6,300 Salaries Expense 2,100 Cash 8,400 1/31
Salaries Expense 2,100 Cash 2,100 2/9 Salaries Expense 8,400 Cash 8,400 1/31 Salaries Expense 2,100 Salaries Payable

Generally Accepted Accounting Principles and Case
Student Cases with Solutions to accompany Accounting amp; Auditing Research: Tools amp; Strategies (7th edition) NOTE: In
addition to the in–chapter and end–of–chapter exercises which serve as short cases you will find the following short cases arranged by
course title that can also be utilized as short cases that require the student to access the authoritative literature to address the issue
presented in the case. Other excellent sources of longer and more detailed cases include the Deloitte Trueblood cases
(www.deloitte.com/more/DTF/cases_subj.htm), as well as the AICPA cases (www.aicpa.org). A topical listing of the cases is presented
with the case and solution following the listing. Topical Index of Student Cases ... Show more content on Helpwriting.net ...
Mead pays no funds to Generous Motors or GMCC until it sells the automobile. Mead must then repay the balance of the loan plus
interest to GMCC. How should Mead report the acquisition and repayment transactions in its Statement of Cash Flows? Case 1
Solution: Problem Identification: How should a company report, if at all, cash and non–cash transactions owed to an entity's financial
subsidiary? Keywords: Cash flows; financ* subsidiaries; operating income. Conclusion: Per ASC 230–10–50–5), Mead should
exclude transactions that involve no cash payments or receipts. However, per 230–10–45–17, it should record cash payments to
GMCC for repayments of principle (and interest thereon) due to suppliers or their subsidiaries as operating cash (out) flows. Case 2:
Narda Corporation agreed to sell all of its capital stock to Effie Corporation for three monthly payments of $200,000. After Effie
made the first required payment, it ceased making other payments. The stock subscription agreement states that Effie, thus, forfeits its
payments and is entitled to no other future consideration. How should Narda record the $200,000 forfeited payment? Case 2 Solution:
Problem Identification: How should a company account for forfeited stock subscriptions? Moreover, do such payments constitute
operating or other income? Keywords: Stock Subscription; operating income; additional paid–in capital; owners' equity; net income;
operating income. Conclusion: Per 505–10–25–2,

Generally Accepted Accounting Principles and Net Assets
Jefferson Animal Rescue is a private not–for–profit clinic and shelter for abandoned domesticated animals, chiefly dogs and cats. At
the end of 2011, the organization had the following account balances: [pic] .:. The following took place during 2012: 1. Additional
supplies were purchased on account in the amount of $15,000. 2. Unconditional (and unrestricted) pledges of support were received
totaling $95,000. In light of a declining economy, 5 percent is expected to be uncollectible. The remainder is expected to be collected
in 2012. 3. Supplies used for animal care amounted to $16,700. 4. Payments made on accounts payable amounted to $18,200. 5. Cash
collected from pledges totaled $91,000. 6. Salaries were paid in the amount of ... Show more content on Helpwriting.net ...
restricted net

Gaap Or Generally Accepted Accounting Principles Are Set
GAAP or Generally Accepted Accounting Principles are set by the Financial Accounting Standards Board (FASB) and is generally
used in the United States. GAAP specifics include concepts and principles and industry specific rules. A company's financials would
need to follow a certain framework and GAAP allows for uniformity among companies. However, there are differences in GAAP
concepts throughout the various geographic regions of the United States.
International Financial Reporting Standards (IFRS) is a set of accounting standards developed by an independent, not–for–profit
organization called the International Accounting Standards Board (IASB). (IFRS 2011). IFRS establishes guidance for companies on
how to prepare financial ... Show more content on Helpwriting.net ...
Target will need to review their Enterprise Resource Planning (ERP) system to determine if it can handle the change to IFRS from
GAAP. Since different accounting practices may need to be adopted as it pertains to fixed assets, RD, leases, among others the ERP
system may need to be changed.
Another consideration would be whether they will need to maintain two sets of records. If this is a requirement needed, they will have
resources tied up to maintain. An IFRS financial statement looks different than GAAP. One may not realize these changes but there is
less information on the IFRS statements however there are more notes.
With all this information and much more to consider Target does not have the appropriate team in place for this transition. They will
need a team specifically designated for IFRS and should bring in experts on IFRS to lead the team.
An IFRS financial statement looks different than GAAP. Upon first glance one may not realize these changes but there is less
information on the IFRS statements however there are more notes.
IFRS does not require a certain format to be followed while GAAP has a specific requirement such as single–step or multiple step.
Extraordinary items are prohibited in IFRS while they are allowed in GAAP if they are infrequent and not the norm.
From a balance sheet

Generally Accepted Accounting Principles and Wally World
PRACTICE EXAM 1 Multiple Choice. Circle the best answer. Use the following information to answer questions 1 and 2. Aristotle
Corporation reports the following information for the current year: Net income Dividends paid on common stock Interest expense
paid on bonds payable Dividends paid on preferred stock 400,000,000 120,000,000 20,000,000 30,000,000 Aristotle had 20 million
shares outstanding from January 1 – June 30 of the current calendar year. On July 1, Aristotle issued another 20 million shares. 1. (2
points) What number should Aristotle use as the numerator in its basic earnings per share calculation? a. b. c. d. e. f. g. $400 million
$280 million $260 million $230 million $350 million $370 million $250 million 2. (2 points) ... Show more content on
Helpwriting.net ...
The Note Payable balance reflects the 90–day 10% (Annual Percentage Rate) $100,000 note that Platteville gave the bank on
November 1, 2007. Interest is at maturity (5 points). Debit Credit Interest Expense Interest Payable Change in Total Assets Change in
Total Liabilities Change in Total Equity 1,667 1,667 Net Income for the period Cash Flow for the period 1,667 –1,667 –1,667 3. Dues
paid in advance by members totaled $9,800 at December 31 (4 points). Debit Credit Dues Revenue Unearned Dues Revenue Change
in Total Assets Change in Total Liabilities Change in Total Equity 9,800 9,800 Net Income for the period Cash Flow for the period
9,800 –9,800 –9,800 4. Platteville renews its insurance policy on April 1 of each year. The amount shown in Insurance Expense
reflects the cash paid in 2007 for the annual premium for the period April 1, 2007 through March 31, 2008 (5 points). Debit Credit
Prepaid Insurance Insurance Expense Change in Total Assets Change in Total Liabilities Change in Total Equity 1,500 1,500 Net
Income for the period Cash Flow for the period 1,500 1,500 4 1,500 5. Salaries expense includes a $1,000 dividend paid to one of
the shareholders (5 points). Debit Credit Dividends (or Retained Earnings) Salaries Expense Change in Total Assets Change in Total
Liabilities Change in Total Equity 1,000 1,000 Net Income for the period Cash Flow for the period 1,000 5 II. (15 points) Statement

General Accepted Accounting Principles ( Gaap ) : The...
Accounting Standards Update 2014–09 Revenue from Contracts with Customers (Topic 606)
ACCT 610 Financial Reporting and Disclosure
Daisy Gaytan
California State University, San Bernardino
Abstract
1. General Accepted Accounting Principles (GAAP): The Revenue Recognition Principle Revenue recognition is a difficult matter in
accounting. The company's results differ depending of the method used to recognized earnings. This is a complex situation since
business activities are broad and intricate. Therefore, policies and regulations are imperative to reduce manipulation of financial
statements. The foundation of the income measurement is the accrual accounting. According to Collins, Johnson, and Mittelstaedt
(2012) under accrual accounting, revenue is recorded in the period when they are earned and become measurable. This is when the
vendor rendered a service, or transferred an asset to the purchaser and the value of the transaction is realistically assured. Expenses
are also recorded in the same period in which the revenues are recognized (the matching principle). Reported revenues under accrual
accounting most of the time do not match cash receipts during the period. Accrual accounting provide a more accurate measure of the
economic value added than cash flows. The accounting process of recognizing income includes two steps: revenue recognition, and
expense matching.
1.1 Criteria for Revenue Recognition According with GAAP, (Collins et al.)

Generally Accepted Accounting Principles and Company
If a company earns net income of $25 million in Year 8, has 10 million shares of stock, pays a dividend of $1.00 per share, and has
annual interest costs of $10 million, then | |
|[pic]|[pic]|the company would have Year 8 earnings per share of $1.50. |
| |[pic]| |
|[pic]|[pic]|the company's retained earnings for Year 8 would be $15 million (net income of $25 million less dividend payments of $10|
| |[pic]|million); the $15 million in retained earnings is treated on the company's balance sheet as additional accumulated |
| | |retained ... Show more content on Helpwriting.net ...
0 |
|Administrative Expenses |2,000 |
| Operating Profit |14,400 |
|Net Interest |1,750 |
|Income Before Taxes |12,650 |
|Taxes |3,795 |
| Net Income |$8,855 |
|Given the above figures, the company's net profit margin (defined as net income divided by sales revenues, as per the Help screen for|
|the Comparative Financial Performance page of the GSR) is |
|[pic]|[pic]|28.8% |
| |[pic]| |
|[pic]|[pic]|27.3% |
| |[pic]| |
|[pic]|[pic]|17.7% |
|

Cash Basis Versus Accepted Accounting Principles
Abstract
This is a discussion of two types of accounting methods that most companies use, accrual basis or cash basis. A definition of both
concepts and comparisons between the two methods will be discussed. In addition, it describes and examines the difference in the
managing of those methods and which form of accounting method is more useful and beneficial to provide information to users for
different purposes. In cash basis accounting, revenue is recorded only when the cash is received, and expenses are recorded only when
cash is paid. The Generally Accepted Accounting Principles (GAAP) prohibits preparing an income statement using the cash basis of
accounting as it violates the matching principles and revenue recognition. An ... Show more content on Helpwriting.net ...
These two methods are based on different principles, and there are major differences between the two systems.
Definition
Cash Basis
Cash basis accounting produces a measure called net operating cash flow. This measure is the difference between cash receipts and
cash disbursements during a reporting period from transactions related to providing goods and services to customers. (Spiceland,
Intermediate Accounting, 2011, pp. 6–7)
Accrual Basis Accrual basis accounting is the measurement of resources provided by revenues and the measure of expenses. The
difference of these two measurements is net income or net loss if expenses are greater than revenues related to providing goods and
services to customers. (Spiceland, Intermediate Accounting, 2011, pp. 6–7)
Advantages and Disadvantages
Cash Basis
When considering the use of cash basis accounting, it is important to understand the following advantages and disadvantages:
Accurate Tracking of Cash Flow
Cash basis accounting gives an accurate reflection of a businesses' cash flow. Since it only records revenue and expenses when they
actually occur, the business knows how much cash it has on hand in that particular moment.
Inaccurate Representation of Long–Term Revenue and Expenses
While cash accounting accurately tracks cash flow, it gives a false impression of revenue and expenses. This method may show a
negative cash flow, even though you anticipate receiving payments in the next period.

Generally Accepted Auditing Standards
Generally Accepted Auditing Standards
Heather Sheetz
Accounting 491
Julie Oldham
March 28, 2008
Generally Accepted Auditing Standards Generally Accepted Auditing Standards or GAAS is a set of systematic guidelines used by
auditors when conducting audits on companies' finances, ensuring the accuracy, consistency and verifiability of auditors' actions and
reports (Lexico Publishing Group, 2008). The following paper will explain the elements of GAAS and how GAAS is applied to
audits. GAAS has three elements that must be used during every audit. They are general standards, standards of field work, and
standards of reporting. Each of the three standards has their own set of rules that must be complied with during every audit. ... Show
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There are three main types of audits, financial, operational, and compliance. First a financial statement audit involves obtaining and
evaluating evidence about an entity's presentation of its financial position, results of operations, and cash flows for the purpose of
expressing an opinion on whether they are presented fairly in conformity with established criteria (Boynton Johnson, 2006). Next
an operational audit involves obtaining and evaluating evidence about the efficiency and effectiveness of an entity's operating
activities in relation to specified objectives (Boynton Johnson, 2006). Last a compliance audit involves obtaining and evaluating
evidence to determine whether certain financial or operating activities of an entity conform to specified conditions, rules, or
regulations (Boynton Johnson, 2006). The standards of GAAS apply to all three types of audits in more ways than one. First the
general standards must all be adhered before any auditor can perform an audit in any entity. The standards of field work also must be
followed while in the entity performing the audit. When reporting the results of the audit the standards of reporting must be followed.
The Sarbanes–Oxley Act of 2002 changed the world of auditing in many ways. The act put provisions into place that an auditor can
no longer perform certain services. It also placed increased penalties on managers of public companies who try to report incorrect data

Generally Accepted Accounting Principles and Costco
Financial Statement Analysis: Costco Wholesale (COST) Executive Summary Costco Wholesale is recognized as the largest
wholesale club operator in the US. Over the three–year time period of 2002–2004, this company has expanded its membership base
while increasing its number of warehouses both in the U.S. and internationally. In 2004 alone, net sales increased 13.1% over the prior
year, driven by an increase in comparable sales of 10% and the opening of twenty new warehouses; net income increased for fiscal
2004 by 22.4%, or $1.85 per diluted share; and for the first time, the Board of Directors declared a quarterly cash dividend, with the
company issuing quarterly dividends in the third and fourth quarters of $0.10 per share. ... Show more content on Helpwriting.net ...
For example, one of the focuses this year was on adding staff at the front–end registers which makes for a more enjoyable shopping
experience by its members. The company has done extensive research into placement of its new locations. Research and history
showed that its strong markets can successfully support many additional Costco warehouses and as a result, most new stores were
added to existing markets. In fiscal year 2005, Costco plans to open between 22–25 new warehouses worldwide, and hopes to double
the number of warehouses within the next 10 years. In addition to the physical locations, Costco.com, its virtual warehouse is
projected to become a $5 billion business, and if sales continue to grow anywhere near the 66% growth in 2004, this goal is entirely
possible. In 2004 it also rolled out the E–commerce order stations in the warehouses to enhance the top–notch, special–order kiosk
offerings. Costco also plans to continue to be one of the leading dealers of fine diamonds nationwide. Its expansion of the Kirkland
Signature private label, a label that has a reputation for quality and value among Costco members, is projected to continue, with the
newest addition being the development of a Shiraz wine. According to the letter to

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