True (f) The objective of financial reporting is the foundation from which the other aspects of the framework logically result. True E2-4 Instructions Identify the appropriate qualitative characteristic(s) to be used given the information provided below. (a) Qualitative characteristic being employed when companies in the same industry are using the same accounting principles. Comparability (b) Quality of information that confirms users’ earlier expectations. Confirmatory value (c) Imperative for providing comparisons of a company from period to period.
To: Giant Company President From: Chief Operating Officer (COO) of Giant Re: Review of Contracts Date: September 12, 2011 QUESTIONS PRESENTED My review of Giant’s contracts finding cost-saving actions using price as instructed and addressed to the Chief Operating Officer of Giant Candy Company (Giant) Giant respectfully. I. Can contracting parties Giant terminate Little Company’s (Little) contract? A promise that places no constraints on the promisor's freedom of choice is called an “illusory promise” and does not provide consideration for another party's promise. A.
* Milestone payment revenue should then be spread out on a pro rata basis as products are distributed under the license and distribution agreement. Differences under IFRS? * Since the agreement has just one deliverable, and the agreements went into effect at the same, no material difference exists when comparing GAAP and IFRS. * However, under IFRS, one could record revenue up-front, mainly from the milestone
• Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity? In deciding Donald and Denise Hastings v. Commissioner of Internal Revenue, the Tax Court ruled that “…occasional and weekend activity… does not indicate a profit objective.” and, therefore is not provided with trade or business status. Conclusion Based upon the existing precedents, Dr Green’s gambling activities would not be considered a trade or business. This opinion is supported by the fact Dr. Green is actively employed as a physician and does not “…depend on income from the [gambling] activity” as required by FS-2007-18. And as ruled in Donald and Denise Hastings v. Commissioner of Internal Revenue, since the gambling activities are limited to the weekends, they are excluded from consideration as a business activity.
The first impact is skills development. In order to remain ethical and avoid instances of statutory illegality such as tax evasions, CGA's must have the knowledge, skills and ability to show a taxpayer where they can save on taxes, and provide advice about conducting financial affairs in a way which will limit tax liability. In the aforementioned case, if Mack's company had a proficient accountant, they may have been able to come up with other ways to reduce
Interest payments on the debt are deductible by the corporation while dividends are not deductible. Repayment of the principal is tax free to the creditor, whereas payments made to shareholders for their stock may be considered dividends or taxable redemptions. On the other hand, a corporation does not recognize a gain or loss on the receipt of money or other property in exchange for its stock. Also, it does not recognize income when it receives money or other property as a contribution to
Other permitted loans are new loans obtained under “normal” lending procedures. d. Independence impaired. This is a direct financial interest. e. The employment would not impair independence unless the spouse is in a key position. A key position is one where the spouse has primary responsibility for significant accounting functions, primary responsibility
26 b. -26 c. -16 d. 16 22. What is the product of -14 and -7? a. 98 b.
Financial Statements ACC/280 May 01, 2012 Edward Vargas Financial Statements Accounting is extremely important by monitoring the functions of the companies, and allowing them to make appropriate financial transactions and decisions. Some areas of accounting can seem confusing and difficult but in the end the outcome is clear and concise. There are two basic forms of accounting known as; financial and managerial accounting. Financial accounting responsibilities are to follow the General Accepted Accounting Principles (GAAP) that is regulations for investor relations, creditors, and taxation purposes, whereas managerial accounting is for internal evaluation. There are different functions and categories that accounting
Full disclosure requires that publicly traded businesses use accrual based accounting and revenues are recognized as sales are earned. Full disclosure also requires that footnotes describe accounting procedures and provide details for unusual transactions. With companies such as Enron and WorldCom, the accounting field has an increased need for businesses to tell the truth in its financial statements. Full disclosure acts as the obligation for businesses to be truthful in its statements in order to protect the parties