1- Some companies are based on intangible assets (such as the skills and expertise of their managers) to generate income , while other are based on tangible assets (such as buildings and equipment) to generate income. Which of these two types of companies is likely to have its balance sheet content less tied to its market value and share reaction to information release. Why?

1- Some companies are based on intangible assets (such as the skills and expertise of their managers) to generate income , while other are based on tangible assets (such as buildings and equipment) to generate income. Which of these two types of companies is likely to have its balance sheet content less tied to its market value and share reaction to information release. Why?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 1MC: That a business may only report activities on financial statements that are specifically related to...

See similar textbooks

Similar questions

Which of the following is true about earnings management? A. It works within the constraints of GAAP. B. It works outside the constraints of GAAP. C. It tries to improve stakeholders views of the companys financial position. D. Both B and C E. Both A and C
Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.
That a business may only report activities on financial statements that are specifically related to company operations, not those activities that affect the owner personally, is known as which of the following? A. separate entity concept B. monetary measurement concept C. going concern assumption D. time period assumption
Fill in the blanks below with the accounting principle, assumption, or related item that best completes the sentence. ________________________ and _______________________ are the two fundamental qualities that make accounting information useful for decision making. Information that helps users confirm or correct prior expectations has _________________ ___________________. ________________________ enables users to identify the real similarities and differences in economic events between companies. _________________ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Information is _______________________ if omitting it or misstating it could influence decisions that users make on the basis of the reported financial information. The ________________________ characteristic requires that the same accounting method be used from one accounting…
_____ are more relevant as they reflect today's values whereas the balance sheet reflects historical costs as adjusted by various accounting methods. To determine the current value of a firm, and its worth to the shareholders, financial managers must monitor _____.
Which of the following statements is (are) not consistentwith generally accepted accounting principles relating toasset valuation?a. Most assets are originally recorded in accountingrecords at their cost to the business entity.b. Subtracting total liabilities from total assets indicateswhat the owners’ equity in the business is worth undercurrent market conditions.c. Accountants assume that assets such as offi ce supplies,land, and buildings will be used in business operationsrather than sold at current market prices.d. Accountants prefer to base the valuation of assets on objective, verifi able evidence rather than upon apprais-als or personal opinions.
Which of the following is true regarding the accounting equation? The left side shows how a business invests its resources. The left side provides insight into how leveraged a company is. The right side shows the relative mix of revenues and expenses of a company. The right side shows who makes investment decisions for a company.
See image attached 1.Compare and analyse the performance of the two companies based on their profit margin, asset turnover, ROCE, and debt equity ratio and explain what the board of Box Limited needs to do to achieve their objective . 2. Which other non-financial measures can influence the decision of the board of Box Limited?
Ratio analysis is a quantitative method of gaining insight into a company's liquidity, operational efficiency, and profitability by studying its financial statements such as the balance sheet and income statement. Is Ratio Analysis a tool to be utilised only by the parties internal to the organisation? Explain
FAR- Conceptual Framework Kindly help me answer the following: 11. Which is an implication of the going concern assumption? * a. Depreciation and amortization policies are justifiable and appropriate. b. The current and noncurrent classification of assets and liabilities is justifiable and significant. c. All of these are an implication of going concern. d. The historical cost principle is credible. 12. The concept of accounting entity is applicable * a. Only to business organisations b. Only to the economic aspects of business organizations c. Only to the legal aspects of business organizations d. Whenever accounting is involved 13. The overall objective of financial reporting is to provide information * a. That allows owners to assess management performance. b. About assets, liabilities and equity of an entity. c. That is useful for decision making d. About financial…
A. Undeniably, profitability is the ultimate goal of companies and readers of a company’s financial statements are very much interested in the reported profit figure. The profit figure is achieved by the preparation of the statement of profit or loss and the statement of financial position. If the foregoing is the case, why then bother about the statement of cash flows? B. Globally, accounting standards are developed based on different methods. It is generally agreed that the nature of accounting standards depends on the systems of regulation. It has been argued that there are two main systems of regulation. Required: Identify and explain the difference between the two systems of regulation, stating clearly which system you believe describes the International Financial Reporting Standards (IFRS)
1.Indicate whether the following statements about the conceptual framework are true or false. If false, provide a brief explanation supporting your position. (a) Accounting rule-making that relies on a body of concepts will result in useful and consistent pronouncements. True (b) General-purpose financial reports are most useful to company insiders in making strategic business decisions. False (c) Accounting standards based on individual conceptual frameworks generally will result in consistent and comparable accounting reports. False (d) Capital providers are the only users who benefit from general-purpose financial reporting. False (e) Accounting reports should be developed so that users without knowledge of economics and business can become informed about the financial results of a company. False (f) The objective of financial reporting is the foundation from which the other aspects of the framework logically result. True