. A restaurant has traditionally used the straight line method to depreciate all its heavy duty kitchen equipment. This year it decides to start using the double declining balance depreciation method on the same equipment. This change must be announced in the financial statements due to the _______ principle. Choices: a. Full disclosure principle b. Time period assumption c. Materiality constraint d. Cost Principle e. Revenue recognition principle f. Conservatism Constrain
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- ANALYSIS. Indicate which accounting concept and principle is violated. Write the letter of your answer on the space provided for. d. Materiality e. Monetary Unit f. Cost g. Objectivity h., Time Period Concept i. , Matching а. Accrual Method b. Business entity C. Disclosure 26. A food company ordered a machine needed in the assembly line of its production department. Upon order, the machine was immediately listed as one of its assets vivo Y20i 2021.11.07 23:581. Small appliances used in food production by a multi millionaire restaurant are expensed when purchased (Do not use conservatism) 2. The cost of beverages taken home for the personal use of the owner is recorded as a withdrawal because of the ________ principle. Choices: a. Full disclosure principle b. Time period assumption c. Materiality constraint d. Cost Principle e. Revenue recognition principle f. Conservatism Constraint g. Matching principle h. Economic entity assumption i. Monetary unit j. Going concern k. Some other answers2. Consider yourself the financial controller of Alpha. The managing director, who is not an accountant, has recently attended a seminar and has raised the following questions for you concerning issues discussed at the seminar: The notes to the financial statements say that plant and equipment is held under the ‘cost model’. However, property which is owner occupied is revalued annually to fair value. Changes in fair value are sometimes reported in profit or loss but usually in ‘other comprehensive income’. Please explain how all these treatments comply with relevant reporting standards. The manager director also added “I wonder how the revaluation model can affect the information relevancy and reliability”. “When I looked at the note detailing the intangible assets we include in our consolidated statement of financial position, I noticed that several brand names associated with subsidiaries we acquired recently were included in this figure. Therefore, I also expected to see a…
- Answer the following questions: Required: a-1. Find the discussion of Property, Plant, and Equipment and depreciation methods used by Campbell's. Use data from the Campbell Soup Company annual report O Straight-line method O Double declining method O Written down value method a-2. Why the particular method is used for the purpose described. Straight-line depreciation is used for financial reporting purposes because depreciation expense will be lower than under any of the accelerated depreciation methods. O Straight-line depreciation is used for financial reporting purposes because depreciation expense will be higher than under any of the accelerated depreciation methods. a-3. What method do you think the company uses for income tax purposes? O Accelerated depreciation using the MACRS rates is probably used for tax purposes to minimize taxes payable. O Straight line Method using the MACRS rates is probably used for tax purposes to minimize taxes payable. Written down value Method using…Which of the following accounting policies is an example of costs versus benefits constraint being exercised in the disclosure of financial information? Inventory is valued at lower of cost or market. Property, plant and equipment are appraised and revalued every three years. Biological assets are stated at fair value unless the fair value cannot be measured reliably. Research and development costs are expensed as incurred.Which of the following statements is/are correct? 1. Depreciation represents the loss in market value of an asset. II. The statement of financial position is likely to do a better job at capturing the assets/resources of a retailer (such as a supermarket) than a professional services firm (such as a law firm or professional accountancy firm). III. All tangible non-current assets go through the process of depreciation. IV. The following will have a negative impact on profitability in a given year: (a) increasing the allowance for trade receivables on the balance sheet, (b) reducing the useful life of depreciable non-current assets, (c) writing down closing inventory. a. Another combination of statements not shown among the other answers. b. All of the statements are correct. c. (II) and (IV) d. (I) and (III) e. (I), (II) and (III) f. (I), (III) and (IV)
- When a plant asset is traded for another of similar asset, losses on the asset traded are not recognized. ____ 7. Receiving payment prior to delivering goods or services causes a current liability to be incurred. ____ 8. One of the most popular defined benefit plans is the 401K plan. ____ 9. All long-term liabilities eventually become current liabilities. ____ 10. The cost of new equipment is called a revenue expenditure because it will help generate revenues in the future True and false questions....Which of the following would have an effect on the presentation of past years' comparable financial statements? Select one: O a. A component operation of the company is discontinued O b. Revising the estimated life of equipment Oc Correcting an error due to improper revenue recognition O d. Impairment of Goodwill Oe. Using MACRS to compute the depreciation of an asset for tax purposesThe following expenditures shall be expensed when incurred, except O Payment in advance of delivery of goods or the rendering of services. O Start up costs O Advertising and promotion costs O Business relocation or reorganization costs Which of the following items would qualify as an intangible asset? * College tuition fees paid to employees who decide to enroll in an executive MBA program while working with the company. O Legal costs paid to intellectual property lawyers to register a patent. O Advertising and promotion on the launch of a huge product. Operating losses during the initial stages of the project. Which is not considered a research and development activity? O Design, construction and operation of a pilot plant. O Laboratory research aimed at discovery of new knowledge. O Conceptual formulation and design of possible product or process. O Routine on-going effort to refine, enrich or improve quality of existing product. Which statement is correct concerning the amortization…
- 1. Retailers recognize revenue at the point of sale. 2.Beach Resorts, Inc. does not record the 2021 value of 15.5 million for a piece of beachfront property it purchased in 1989 for 1,500,000. Choices: a. Full disclosure principle b. Time period assumption c. Materiality constraint d. Cost Principle e. Revenue recognition principle f. Conservatism Constraint g. Matching principle h. Economic entity assumption i. Monetary unit j. Going concern k. Some other answersChoose the correct answer: 1. Physical plant assets can include: a.Machinery deposits not received b.Unused equipment waiting to be sold c.Land that is kept for future use for company building d.None of the above 2.Which of the following is not a characteristic of a physical plant asset? a. It has physical substance. b. Acquired for resale. c. Acquired for business use. d. It will offer service for an indeterminate number of years. 3. Which of the following is a characteristic of a physical plant asset? a. It has physical substance. b. Acquired for business use. c. It will offer service for an indeterminate number of years. d. All of the above are characteristics of physical plant assets. 4. Which of the following is not considered cash for financial reporting purposes? a. Petty cash and exchange fund b. Money orders, certified checks and personal checks c. Available currencies, dollars and funds d. Future-dated checks 5. Which of the following is considered effective? a. Certificates…1-Change in fair value of the biological assets between the beginning balance and ending balance should be classified to: a. price change and physical change b. price change and quality change c. price change and quantity change d. quantity change and quality change 2-which of the following would not be measured at fair value less expenses to sell: a. herd of sheep b. wheat and maize C. apples were detached today from the tree d. cheese that was produced from milk cow 3-the basis that we use to prepare the four financial statements is/are: a. cash basis b. both accrual and cash basis c. fund basis d. accrual basis 4-price change and physical changes of fair value must appear respectively in: a. income statement and other comprehensive income b. other comprehensive income and income statement c. income statement and retained earnings statement d. income statement and income statement