How does the concept of consistency aid in the analysis of financial statements? What type of...
How does the concept of consistency aid in the analysis of financial statements? What type of accounting disclosure is required if this concept is not applied?
Homework Answers
The Concept of Consistency requires the entity to provide the same treatment to comparable transactions from period to period. This adds to the usefulness of the reports, since the reports from one period are comparable to the reports from another period. It also facilitates detection of trends. It also enables the investors and other users of the financial statements to easily and correctly compare the financial statements of a company. If for any valid reasons the accounting policy is changed, a business must disclose the nature of change, reasons for the change and its effect on the items of the financial statements.
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How does the concept of consistency aid in the analysis of
financial statements? What type of...
According to Statements of Financial Accounting Concepts, neutrality is an ingredient of: Reliability Relevance Consistency Conservatism
According to Statements of Financial Accounting Concepts, neutrality is an ingredient of: Reliability Relevance Consistency Conservatism
How does accrual accounting complicate the use of corporate financial statements in estimating co...
How does accrual accounting complicate the use of corporate financial statements in estimating corporate value (by investors) or managing and maximizing corporate value (by management)? 1. 2. Explain how management and investors can effectively determine a company's financial condition using financial statement ratio analysis? 3. Explain the underlying ideas behind time value of money. Explain when one would use Present Value to make a financial decision and when one would use Future Value.
How does accrual accounting complicate the use...
Explain how using the financial statements can aid in the evaluation of the company's efficiency related...
Explain how using the financial statements can aid in the evaluation of the company's efficiency related to receivables.
Which of the following statements is true? Group of answer choices Students receiving financial aid awards...
Which of the following statements is true? Group of answer choices Students receiving financial aid awards may qualify for all three types of federal financial aid and also receive additional financial aid awards from the state or school. Students receiving financial aid awards may only qualify for one type of federal financial aid. Financial aid applications are due before the school year starts and cannot be submitted after the start date. All of the choices are true.
How are financial statements used to evaluate business activities? What is managerial accounting and how does...
How are financial statements used to evaluate business activities? What is managerial accounting and how does it help businesses create a competitive advantage? What skills must be developed to evaluate company performance? How are investment and operations alternatives evaluated and selected? minimum of 500 words
State how the essentials components of a business plan and financial statements aid in a company’s...
State how the essentials components of a business plan and financial statements aid in a company’s success. Explain why you believe a company will be more successful if they complete a business plan.
LO 1 Qualitative Characteristics and Accounting Conventions E2A. CONCEPT Each of the statements that follow violates...
LO 1 Qualitative Characteristics and Accounting Conventions E2A. CONCEPT Each of the statements that follow violates one or more accounting con- cepts. State which of these selected qualitative characteristics and accounting conventions- relevance, faithful representation, comparability, verifiability, timeliness, understandability, cost constraint, consistency, materiality, conservatism, or full disclosure-is (are) violated. 1. A company changes its method of accounting for depreciation. 2. The asset account for a pickup truck still used in the business is written down to what the truck could...
[33] What is the purpose of information presented in notes to the financial statements? A. To...
[33] What is the purpose of information presented in notes to the financial statements? A. To provide disclosures required by generally accepted accounting principles. B. To correct improper presentation in the financial statements. C. To provide recognition of amounts not included in the totals of the financial statements. D. To present management’s responses to auditor comments. [34] According to the FASB’s conceptual framework, certain assets are reported in financial statements at the amount of cash or its equivalent that would...
How does analyzing financial statements help a managerial accountant or manager make decisions? Can these be...
How does analyzing financial statements help a managerial accountant or manager make decisions? Can these be used to compare one company to another? What are the benefits and limitations? Is it better to compare industry averages? It is stated that ratios are the starting point rather than the end. Are there other non-accounting factors to consider in analysis and decision making? State them and give your rationale.
Which of the following is not a limitation of financial statements? A.It is possible that two...
Which of the following is not a limitation of financial statements? A.It is possible that two firms operating in the same industry may follow different accounting methods for the exact same transaction. B.Financial statements are not adjusted to show the impact of inflation. C Financial statements do not reflect opportunity cost, which is an economic concept relating to income forgone because an opportunity to earn income was not pursued. D. Full disclosure requires that the financial statements and notes include...
According to Statements of Financial Accounting Concepts, neutrality is an ingredient of: Reliability Relevance Consistency Conservatism
How does accrual accounting complicate the use of corporate financial statements in estimating corporate value (by investors) or managing and maximizing corporate value (by management)? 1. 2. Explain how management and investors can effectively determine a company's financial condition using financial statement ratio analysis? 3. Explain the underlying ideas behind time value of money. Explain when one would use Present Value to make a financial decision and when one would use Future Value.
How does accrual accounting complicate the use...
LO 1 Qualitative Characteristics and Accounting Conventions E2A. CONCEPT Each of the statements that follow violates one or more accounting con- cepts. State which of these selected qualitative characteristics and accounting conventions- relevance, faithful representation, comparability, verifiability, timeliness, understandability, cost constraint, consistency, materiality, conservatism, or full disclosure-is (are) violated. 1. A company changes its method of accounting for depreciation. 2. The asset account for a pickup truck still used in the business is written down to what the truck could...
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