Respond to the following in a minimum of 175 words:
Share, in your own words, the difference between the fair value and equity methods of accounting for investments. In what situations would an accountant use one method over the other? What drawbacks, if any, are associated with each method?
Fair Market Value Method:
As it requires investors have 20% holding shares in order to have significant influence in a firm. But when the holding is less than 20% the it comes under Non current Asset. And in the balance sheet it is updated as the book value as per market price. As per Fair Market Value it shows the asset sale price to sell the asset quickly. It makes the balance sheet more transparent and genuine one. Auditors also prefer the same method as its easy for comparisio even.
Equity method for Accounting:
When the investor has significant influence i.e. holding of 20% to 50% then this method is preferred. The investee is income or loss is shown in profit and loss statement and updated in book value os the asset. The investment is originally recored at cost and the dividend received or paid off is adjusted therefter. Investor company reports the revenue earned in other company in proportion to equity investment. Hence this is better method as it shows economic relationship of 2 companies more appropriately.
Respond to the following in a minimum of 175 words: Share, in your own words, the...
Respond to the following in a minimum of 175 words: Two common types of leases are operating and financing leases. In your own words, describe and share examples of each. What are the major differences in accounting for each of these two types of leases?
Respond to the following in a minimum of 175 words: Share your understanding of a tax preparer’s professional responsibilities. What penalties, if any, can accrue to a tax preparer who makes errors on a company’s tax return? Does intent (malicious vs. accidental) change those penalties? *Please do not copy & paste from a prior answer, I mean no disrespect by any means but some of those answers are not helpful and the reason I posted a seperate question. Thanks, I...
Respond to the following in a minimum of 175 words: How can an employee's use of social media positively or negatively affect their company? What difference does it make, if any, if it is done on their own time and from their own personal account(s)? What type of policy, if any, should an employer have regarding social media use by employees?
Respond to the following in a minimum of 175 words: What are some of the key differences between financial and managerial accounting? How do these differences impact the type of information that must be gathered and reported? What are the different types of decisions that users of financial accounting information must make? What are the different types of decisions that users of managerial accounting information must make?
Respond to the following in a minimum of 175 words: A component of an accounting system is one part that helps the entire system accumulate financial data, translate the data into worthwhile information, and then communicate the information to the necessary users. Briefly explain the five main components of an accounting system.
Respond to the following in a minimum of 175 words: Discuss the differences and relationship between a business level strategy and a corporate level strategy. Use examples from your own company (or a company with which you are familiar) in order to illustrate this differences and relationship.
Respond to the following in a minimum of 175 words: Discuss the major similarities and differences in accounting for for-profit and not-for-profit organizations. Be sure to consider differences in organizational ownership, fund accounting, and financial reporting. *Please do not copy & paste from a prior answer, I mean no disrespect by any means but some of those answers are not helpful and the reason I posted a question. Thanks, I appreciate any assistance.
Respond to the following in a minimum of 175 words: Discuss the four types of dividends. Which of the four is used most often, and why? What may happen to a company’s share price when dividends are announced or paid? Why do you think this is so?
Respond to the following in a minimum of 175 words: A statement of cash flows classifies cash receipts and cash payments into what three categories of activity? For each category of activity, share two specific examples of both cash receipts and cash payments based on two different business scenarios of your choosing. The business scenarios you choose can be based on real or fictional companies. For example, if you chose Uber and the fictional MarksABunch Art Supplies company, you would...
Respond to the following in a minimum of 175 words: Compare the pros and cons of two economic systems.