9. Technical analysts feel that financial accounting statements lack information, or report it in a way thatmakes comparisons difficult. Which of the following does not constitute a problem?a. Detailed information concerning sales and expenses by product line.b. Statements of change in financial position.c. Alternative ways of reporting expenses.d. Alternative ways of reporting assets and liabilities.e. The availability of psychological and nonquantitative variables.

Technical analysis is a method to analyse the price movement of stocks and other securities for…

Answered: Technical analysts feel that financial…

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter7: The Conversion Cycle

Section: Chapter Questions

Problem 9MCQ: Which of the following statements regarding traditional accounting is true? a. Traditional...

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Similar questions

Which of the following statements is false regarding planning analytical procedures in the revenue cycle? a. As revenue is typically regarded as a high-risk account, planning analytical procedures related to revenue are not required. b. The first step in planning analytical procedures includes developing an expectation of recorded amounts or ratios, and evaluating whether that expectation is precise enough to accomplish the relevant objective. c. Trend analysis would not be appropriate as a plan-fling analytical procedure in the revenue cycle. d. All of the above statements are false.
Which statement is incorrect concerning accounting estimate a.As a result of uncertainties inherent in business activities, many items in financial statements cannot be measured withprecision but can only be estimated. b.By its very nature, the revision of an estimate relates to a prior period and is a correction of an error. c.The use of reasonable estimate is an essential part of the preparation of financial statements and does not determinetheir reliability. d.An estimate may need revision if changes occur in the circumstances on which the estimate was based or as result ofnew information or more experience.
How does subjective accounting policies at General Electric assist in hiding poor decision-making results on the Income Statement and Balance Sheet?
How can adjustments to the standardized financial statements be made in order to undo these distortions? Accounting distortions: Accounting distortions refer to the concept of any sort of difference between the information or evaluation made regarding the financial statement than the real-time data of the business. The most common types of accounting distortions are as follows: Data entry errors: It occurs when there are mistakes or misstatements in the data entry system of the company. For example, entering items in the wrong account, transposing numbers, leaving out or adding a digit or a decimal place, treating expenses as income, or vice versa. The error of omission: It involves an error that occurs when one fails or forgets to make any entry. For example, failure to record any notes received. The error of commission: It involves mishandling of any entry by recording it in the wrong books or with the wrong place The error of transposition: It is the error of…
The concept of earnings quality has several dimensions, but two characteristics often dominate. The accounting information should be a fair representation of performance for the reporting period and, The information should provide relevant information to forecast expected future earnings. Provide a specific example of poor accounting quality that would hinder to forecasting of expected future earnings.
A tradeoff between enhancing qualitative characteristics often occurs. For example, when a company records sales revenue, it is required to simultaneously estimate and record an expense for potential bad debts (uncollectible accounts). Including this estimated expense is considered to represent the economic event faithfully and to provide relevant information about the net profi ts for the accounting period. Th e information is timely and understandable; but because bad debts may not be known with certainty until a later period, inclusion of this estimated expense involves a sacrifi ce of verifi ability. Th e bad debt expense is simply an estimate. It is apparent that it is not always possible to simultaneously fulfi ll all qualitative characteristics. Companies are most likely to make tradeoff s between which of the following when preparing fi nancial reports? A . Relevance and materiality. B . Timeliness and verifi ability. C . Relevance and faithful representation.
How can the qualitative faithful representation (reliability) characteristic be improved in high-quality accounting information? Do not simply repeat what it is, provide suggestions as to how a particular part of the qualitative characteristics could be improved. Please provide different answers and explanations than copy and pasting: “Accounting information is reliable if these are-Complete - Financial statements should not exclude any transaction, Neutral - The degree to which information is free from bias. Note that there are subjectivity and estimation involved in financial statements, therefore information cannot be truly "neutral." However, if a company polled 1,000 accountants and took the average of their answers, that would be considered neutral and free from bias. and Free from error - The degree to which information is free from errors.”
Which of the following statements is not correct regarding combined statement of financial position errors and income statement errors? a. It does not affect net income. b. It results to misstatement of the statement of financial position. c. It can be classified as counterbalancing errors and non-counterbalancing errors. d. It affects both real and nominal accounts.
Classify each of the following accepted accounting practices as conservative or aggressive.1. Use lower-of-cost-or-market to value inventory.2. Expense all research and development costs rather than recording some research and development costs as an asset.3. Record loss contingencies when they are probable and can be reasonably estimated, but do not record gain contingencies until they are certain.
The following situations represent errors and frauds that could occur in financial statements.Required:State how the ratio in question would compare (higher, equal, or lower) to what the ratio should have been had the error or fraud not occurred.a. The company recorded fictitious sales with credits to sales revenue accounts and debits to accounts receivable. Inventory was reduced, and cost of goods sold was increased for the profitable “sales.” Is the current ratio higher than, equal to, or lower than what it should have been?b. The company recorded cash disbursements by paying trade accounts payable but held the checks past the year-end date, meaning that the “disbursements” should not have been shown as credits to cash and debits to accounts payable. Is the current ratio higher than, equal to, or lower than what it should have been? Consider cases in which the currentratio before the improper “disbursement” recording was (1) higher than 1:1, (2) equal to 1:1, and (3) lower than…
Which of the following is not an advantage of accounting standards? Select one: a. All of the given answers are correct. b. It reduces the reliability of financial statements. c. It helps to attain uniformity in accounting. d. It provides guidance on the content and presentation of financial statements.
Below are the limitation of financial statements .Please suggest ways to overcome them :-The financial statements contain only past data-The financial statement may not be comparable -The financial statements doesn't account for inflation-The financial statements are prepared on the basis of some assumptions-The financial statement doesn't cover the non-financial aspect of the company

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