Professional accountants DO NOT contribute for: Mismanagement of resources in both the private and public sectors Assist governments in achieving their economic and social objectives Support and sustain non-profit organizations Growth of individual companies Mohammed is the auditor of GOod LUck ConstructIOns Company, He wants to e

Professional accountants DO NOT contribute for: Mismanagement of resources in both the private and public sectors Assist governments in achieving their economic and social objectives Support and sustain non-profit organizations Growth of individual companies Mohammed is the auditor of GOod LUck ConstructIOns Company, He wants to e

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter1: Accounting And The Financial Statements

Section: Chapter Questions

Problem 71C

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Q17 Statement I: A company is accountable to the society since it makes use of community-owned resources and other infrastructural facilities and enjoys concessions provided by state from tax-payers money.Statement II: The best way of social responsibility reporting is to prepare a value-added statement, which shows the income earned by all the stakeholders (staff, community & public) a. Both the statement are true b. Both the statements are false c. Only Statement I is true d. Only statement II is true
1. The traditional business model of accountingis inadequate for governments and not-for-profitorganizations primarily because businesses differ fromgovernments and not-for-profit organizations in thata. They have different missionsb. They have fewer assetsc. Their assets are intangibled. Taxes are a major expenditure of businesses3. The primary objective of a not-for-profit organizationor a government is toa. Maximize revenuesb. Minimize expendituresc. Provide services to constituentsd. All of the above4. In governments, in contrast to businesses,a. Expenditures are driven mainly by the ability of theentity to raise revenuesb. The amount of revenues collected is a signal of thedemand for servicesc. There may not be a direct relationship between revenuesraised and the demand for the entity’s servicesd. The amount of expenditures is independent of theamount of revenues collected5. The organization responsible for setting accountingstandards for state and local governments is thea.…
03-__________has a long-run self-interest where the organization accomplishes activities for the betterment of society to be profitable in the future. a. Corporate responsibility for economic growth b. None of the options c. Corporate ethical responsibility d. Corporate social responsibility
a. What is the Sarbanes –Oxley Act? (SOX) b. What are the highlights of SOX c. What are the costs and benefits of SOX d. Describe how SOX would have impacted Accounting over the past 18 years e. Provide the pros and cons of SOX f. Compare and contrast the usage of SOX in the private sector vs similar requirements in the public sector. Required: Please only answer (d) to (f)
Select one of the following nonprofit organizations:1.The American Accounting Association2.American Red Cross3.United Way4.American Cancer Society5.American Institute of CPAsUse the Annual Report of the organization you have selected to:a. Identify the financial statements that the entity presents and what additional disclosure it presents.b. Analyze how contributions are recognized (contributions revenues). Does the organization have net assets with restrictions imposed by donors? What is the nature of the restrictions?
1.The IASB sets standards for: a. The private sector b. The public and private sectors c.The public, private and not-for-profit sector d. The private and not-for-profit sector 2. Which of these is not one of the benefits of a Conceptual framework? a. Reporting requirements will be more Consistent and logical b. It may allow firms to reduce their reported profit c. The need for specific accounting standards should be reduced d. Standard setting boards will be more accountable for their actions
a. What is the Sarbanes –Oxley Act? (SOX) b. What are the highlights of SOX c. What are the costs and benefits of SOX d. Describe how SOX would have impacted Accounting over the past 18 years e. Provide the pros and cons of SOX f. Compare and contrast the usage of SOX in the private sector vs similar requirements in the public sector
Q1. State whether these statements are true or false. Discuss why the false statements are false. a. An entity is likely to be a governmental entity if a controlling majority of its governing body is appointed by governmental officials. b. The objective of a government is to provide services to its constituents. c. AICPA pronouncements have approximately the same level of authority as articles appearing in the Journal of Accountancy. d. The objective of a not-for-profit organization is to provide services to its constituents. e. By definition, all funds have cash, financial resources, and capital resources. f. The objective of a business organization is to enhance the wealth of its owners.
Write True (T) or False (F) The objective of financial reports is to provide information regarding the ‘financial position and performance’ of an entity for external stakeholder of the business to make decisions ( ) Key objective of not for profit organizations is profits ( ) There’s no ethical concerns for accountants ( ) Staright-line method is one of the approaches to account for depreciation ( ) Stakeholders are the internal and external users of accounting information ( ) Triple bottom line reporting refers to social reporting only ( ) Conceptual framework refers to the concepts which are underlying assumptions based on which financial statemennts are prepared ( ) Source documents are the orginal proof documents accounts refer to when preparing…
1. (TCO 1) Which of the following was the first private sector entity that set accounting standards in the United States?Accounting Principles BoardCommittee on Accounting ProcedureFinancial Accounting Standards BoardAICPA 2. (TCO 2) The enhancing qualitative characteristic of understandability means that information should be understood by those who are experts in the interpretation of financial information.those who have a reasonable understanding of business and economic activities.financial analysts.CPAs. 3. (TCO 3) Incurring an expense for advertising on an account would be recorded by debiting liabilities.crediting assets.debiting an expense.debiting assets. 4. (TCO 3) When a business makes an end-of-period adjusting entry with a debit to supplies expense, the usual credit entry is made to accounts payable.supplies.cash.retained earnings. 5. (TCO 3) Temporary accounts would not include salaries payable.depreciation expense.supplies expense.cost of goods sold.
01. An accountant prepares a statement of financial position for a business. In this statement,the equity of the owner was shown next to the liabilities. This confused the owner, who argued: ‘My equity is my major asset and so should be shown as an asset on the statement of financial position.’ How would you explain this misunderstanding to the owner? 02. ‘The statement of financial position shows how much a business is worth.’ Do you agree with this statement? Explain the reasons for your response. 03.“When evaluating projects, we’re concerned with only the relevant incremental after-tax cash flows. Therefore, because depreciation is a non-cash expense, we should ignore its effects when evaluating projects.” Critically evaluate this statement.
Case Study 02 – Horace Hoi Organisation In the country of Laland, aid organisations registered as charities are not subject to the same financial reporting requirements as limited companies (this is not the case in many other countries where they are treated equally in law). One person to take advantage of this is Horace Hoi who has led his vigorous campaign in favour of animal protection for the past 25 years. As a highly competent self-publicist for his charity and an engaging media performer, he has raised the public profile of his charity substantially. He can and does raise large amounts of money for his charity through his personal charm and passionate appeals on television and in large meetings of supporters. His charity is called the ‘Horace Hoi Organisation’ (HHO) and its stated aim is to ‘stop animals suffering’. Mr Hoi has recently become the subject of criticism by the media because of allegations that he lived a lavish lifestyle and personally owned a large mansion and a…