e. Although its stockholders are insulated by limited legal liability, the corporation's legal status does not protect the firm's managers in the same way; i.e., bondholders can sue its managers if the firm defaults on its debt, even if the default is the result of poor economic conditions. 3. Which of the following statements is CORRECT? a. In a regular partnership, liability for other partners' misdeeds is limited to the amount of a particular partner's investment in the business.
However, when GEC took over AEI it forecast a loss of £4.5 million. This was partly due to inconsistencies such as different views over the value of stock. Mandatory standards were needed to resolve this inconsistency and to make the accounts ‘objective’. That is, the profit should be the same regardless of who was preparing them. A
This shows us that discounting the machine will not bring positive cash flows to the buying company. This GRAPH shows us that even though they would’ve met their 5 years maximum plan this opportunity of an investment would not be good because the values we get from the Buyers DCF is less than the current cost of the investment. I would have to decline this bid. Year | Number of Plates | Old Price Per Plate | New Price Per Plate | Buyer Cash Flow | Buyer DCF | Seller Cash Flow | Seller DCF | 1 | 225 | 5.00 | $2.00 | ($5,325) | ($5,325) | $2,335 | $2,335 | 2 | 225 | 5.15 | $2.06 | $695 | $695 | $329 | $329 | 3 | 225 | 5.30 | $2.12 | $716 | $716 | $342 | $342 | 4 | 225 | 5.46 | $2.19 | $738 | $738 | $357 | $357 | 5 | 225 | 5.63 | $2.25 | $760 | $760 | $371 | $371 | Year | Number of Plates | Old Price Per Plate | New Price Per Plate | Buyer Cash Flow | Buyer DCF | Seller Cash Flow | Seller DCF | | | | Totals | $584 | $584 | $3,734 | $3,734 | Client-Specific Parameters | | | | | | | Salvage Value (new machine) | $3,000 | | Salvage value of a new
The prosecutors work load is also reduced as a result of a plea bargain and thus they are accorded a chance to concentrate on other cases that can not be settled through plea bargaining. Besides the prosecutor, the judge also reaps the benefit of plea bargaining. This is because plea bargaining ensures speedy conclusion of cases that would have otherwise taken long to conclude hence ensuring movement of the system as a whole. Finally, it helps in reducing congestion in jails and prisons as a result of some of the defendants receiving suspended sentences from their plea bargains (McConnell, Michael & Chester,
We also learned that externalities are factors whose costs and benefits are not reflected in the market price of goods and services. Laura explained how externalities can be a loss or a gain for one party resulting from activity by another party without there being any compensation for the party who lost out. Tim appreciated the discussion around government actions and how the government can actually make things worse by getting involved. Laura learned about horizontal, vertical and conglomerate mergers (and their effect on competition and innovation) are that the five reasons that two unrelated firms would want to Learning Team Reflection - Public Policy in Economics Page 3 merge could be 1) economies of scope, 2) a good buy, 3) diversification, 4) warding off of a takeover bid, and 5)
If deferring this revenue will not be acceptable to the company's auditors, management would prefer to treat these "excess" sales as consignment sales, with the recognition of revenue taking place in 2001 or when the bottler eventually sells this product. CCL has approached you, Erin Greene, CMA, to provide an analysis of the financial accounting issues
They worked with the RIAs (registered investment advisors) to lower the cost. They ruled out those that did not match the efficient market theory, avoiding purchase stocks in the open market (use block trade) or near announcement date. These are the two examples of avoiding big price changes caused by large purchase or event risk. 2. DFA roughly believed in efficient market theory.
This can make the financial statements misleading. Both methods are way of recording transactions the only difference is when the number hits a company’s bottom line. An account may use the cash basis accounting when the company’s is small and the books are kept on the actual flow of cash coming in and out. This is used normally with a company with no inventory or a sole proprietor. They typically use this method because it requires fewer journal entries for closing an accounting period and creating financial statements.
As a business owner I would use accrual method only because it recognizes Receivables and payable. When using the cash basis a company can appear that it is earning profit when in fact it is loosing funds. Cash basis does not acknowledge money that is owed which make is very difficult to keep accurate records. The IRS generally requires companies to use the cash accrual basis of accounting on their tax return. The Internal revenue service does allow the cash method of accounting if certain criteria are met because tax laws change frequently it is essential to contact a CPA if a business owner decides to use cash basis of accounting.
The main argument of the paper, “Why Good Accountants Do Bad Audits”, is that the provisions of the Sarbanes-Oxley Act (SOX) of 2002 are not sufficient in fixing the problems with the U.S. system of auditing. While SOX aims at eliminating conscious corruption, the authors attribute the problem to unconscious bias, the idea that auditors unknowingly discount facts that contradict the conclusions that would benefit them and embrace evidence that supports their positions. The paper discusses three structural aspects of accounting and three aspects of human nature that create opportunities for bias. Each of these aspects influences the judgments auditors make and can lead even the most honest auditors to unintentionally distort the numbers in ways that mask the company’s true financial position. With these aspects in mind, the authors offer recommendations that would limit the effects of biases including full divestiture of consulting and tax services, prohibit auditors from taking positions with the firms they audit, removing the threat of being fired, and educate auditors so they understand how and why biases effect their decisions.