1. Provide the definitions of throughput, inventory and operational expense given in The Goal. How do they compare with the traditional definitions? Do you find them useful, and why? Throughput is the rate at which the system generates money through sales while inventory is all the money that the system has invested in purchasing things which it intends to sell.
If no service contract exists, those fees are recognized over the average customer relationship period. Associated expenses are deferred only to the extent of such deferred revenue. For contracts that involve the bundling of services, revenue is allocated to the services based on their relative fair value. AT&T Inc. records the sale of equipment to customers as gross revenue when AT&T Inc. is the primary obligor in the arrangement, when title is passed and when the products are accepted by customers. For agreements involving the resale of third-party services in which AT&T Inc. is not considered the primary obligor of the arrangement, AT&T Inc. records the revenue net of the associated costs incurred.
because the Emission and the cost of emission allowances have indetermination lives and inherent in a continuing business , the emission allowance is recognized as expense when incurred. In conclusion: If the emission allowance is recognized as expense when incurred , expense is noncash item, it is reconciled net income in the operating activities so that the
These statements now may be used in evaluating the performance of Lee College. Evaluating the performance and financial position for not-for-profit organizations and governments is difficult because they vary greatly in size. Their relative performance based on gross amounts reported in the financial statements does not provide a clear picture and in order to facilitate comparisons; many that use the financial statements often calculate ratios. The most commonly used measure of not-for-profit efficiency is the program expense ratio. This ratio is calculated by taking a total of the program expenses and dividing by the total expenses for an organization.
COURSE WORK 1- FINANCIAL MANAGEMENT/FINANCIAL ACCOUNTING 1. UNDERSTANDING OF THE DIFFERNCE BETWEEN FINANCIAL ACCOUNTING AND MANAGEMENT ACCOUNTING Financial accounting is focused on generally accepted accounting principles- producing a limited set of financial statements. This includes the balance sheet and the income statements, by which the overall past performance of business can be judged by outsiders. Management accounting deals with information that is not made public and is used for internal decisions making only. These reports are far more detailed than financial accounting reports and can cover performances and activities by departments, teams, products, customers and employees.
The income statements of service business normally have separate sections for operating revenues, operating expenses, and other income (expenses). In contrast, those of retailers, wholesalers, and manufacturers disclose sales revenue, followed immediately by cost of goods sold and gross margin. Operating expenses are listed next followed by other income (expenses). 4. The basic difference falls in the area of inventory.
These are tangible assets and examples of these assets are premises, fixtures and fitting, equipment and vehicles. For business alpha the fixed assets are 344,000. The next section for the balance sheet is current assets these are the items of value that is owned by a business which its values are likely to be help on a regular basis. Examples of current assets are stock, debtors and cash. For business alpha the total current asset calculation is to add all the assets In order to receive the full current assets.
Which of the following internal control activities most likely would assure that all billed sales are correctly posted to the accounts receivable ledger? A. Daily sales summaries are compared to daily postings to the accounts receivable ledger. B. Each sales invoice is supported by a prenumbered shipping document.
Week 3 Questions: 7: Active income is derived from the main course of business or trade; the taxpayer’s full time job or main means of generating income. Passive income is income derived from passive activities, activities that the taxpayer does not devote sufficient time for to be considered as part of main trade and business activities. Portfolio income comes from dividends, annuities, and other investments not part of the main course of business activities. 13. Material participation is a concept used by the law to determine what qualifies as a passive activity.
Due to the lack of substance of a patent and the long term benefit a patent can provide, a patent is classified as an intangible asset for accounting treatment. FASB Accounting Standard Codification subtopic 350 discusses accounting for intangible assets. The costs associated with an intangible asset are amortized over the useful life of the asset. The useful life is determined by the expected period of time the asset is expected to contribute to future cash flows of the reporting entity (ASC 350-30-35-2). Legal or contractual obligations can also help determine the useful life of an intangible asset.