Accounting
There are a couple of different issues with the Smith Company statements. The first question relates to the $45,500 worth of products. This would not be recorded as income, because the customer has not committed to the purchase. Revenue recognition rules hold that revenue cannot be recognized until the sale has been finalized (Investopedia, 2013). This revenue must be removed from the income statement. While the description of the situation is unclear, it appears that this amount was removed from the revenue already, so that the $406,000 in revenue on the income statement is the correct amount.
The next issue is the inventory problem. The inventory account is currently showing $25,000, which was the result of a physical count. There was no adjusting entry to the inventory for the $45,500 that was added to and subsequently removed from revenue. The question appears to be implying, when it should be stating clearly, that the $45,500 was removed from inventory when the sale was recorded, but was not added...
Accounting Memo John and Jane Smith Add, NearLakes CPA Services RE: Tax Implications Mr. And Mrs. Smith: I have carefully reviewed the materials from our recent meeting and have the following information and recommendations for your situation: Under U.S. Tax law, Gross Income is defined as compensation for fees, services, commissions and similar items (26 CFR 1,61.2) (Internal Revenue Service, 2013). In this case, the income derived from a client in a personal injury case is considered
Accounting standards and IFRS adoption in Cambodia and Thailand The significance of accounting standards Accounting may be considered as a business language through which the statistical results can be acquired which help in analyzing how well the firm is functioning. They give out timely statements of these statistics and help the stakeholders get all the information they need. Accounting is like a separate language which has its own grammar and these outlines
However, when a shock happens that changes that pattern, the information is no longer relevant. In periods of turmoil, only the most up-to-date information is relevant. The usefulness of the information wanes quickly as the behavior of the company becomes more erratic. After a period of erratic behavior and change, the company may be forced to make internal changes that affect the way they do business. They may make
.....ethical for an employer to use social media information as a factor when considering whether to hire an employee? What about monitoring social networking activities of employees while on the job? Use ethical reasoning in answering these questions. The wide-ranging use of social media in the workplace gives rise to serious moral and ethical concerns. Kantian ethics lays emphasis on the form of an action in ascertaining its morality. Kant insists
OlympusThe Olympus case highlights a number of behavioral, ethical and accounting issues. First, the ethics of the case are crystal clear. The two executives of Olympus went to extensive lengths to commit the fraud. It was carefully planned, with multiple steps undertaken over an extensive time period. Viewed through the lens of the fraud triangle, they were in a position (opportunity) as both executives and members of the board
Apart from this FASB has decided that capitalization of IPR&D will only apply to business combinations. When assets are purchased, and they are not viewed as businesses under GAAP in U.S., would continue to have IPR&D as expenses. One of the results could be to have businesses which are now following GAAP to find out new methods so that they could avoid capitalizing IPR&D. The importance of this issue
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