Which of the following is correct about "Cost", "Expense", and "Loss" concepts? Select one: a. Expense is defined as reduction in firm's equity, other than from withdrawals of capital for which no compensating value has been received. b. Cost is the total of expense and loss. c. Expense is defined as an expired cost resulting from a productive usage of an asset. d. Loss is defined as an expired cost resulting from a productive usage of a non-current asset.

Q: Under IFRS, a company: a. should evaluate only equity investments for ­impairment. b. accounts for…

A: Option C is correct.

Q: Which sentence is incorrect? Select one: a. Depreciation is not the actual change in the value of…

A: Depreciation expense is a non-cash expense, which is recorded on the income statement reflecting the…

Q: Under the Dupont Technique, which of the following is false? a. Dupont Technique reveals the…

A: Dupont Technique is analyzing fundamental performance and useful technique used to decompose…

Q: Under the Dupont Technique, which of the following is false? * O The return on asset is the computed…

A: Dupont analysis is a technique which finds out the asset utilization and profitability of a firm.…

Q: Whats is the effect of increasing the asset turnover (ATO) on enterprise price-to-book value,…

A: Asset turnover ratio is The asset turnover ratio measures the value of a company's sales or…

Q: An investment property should be measured initially at O A. Cost. B. Cost less accumulated…

A: Investment property is a kind of asset that is part of the balance sheet of the company. It means…

Q: Which of the following statements is false?  A For tax purposes, companies can use the MACRS…

A: MACRS means The Modified Accelerated Cost Recovery System

Q: Change in accounting estimate, as used in the recording and reporting of financial data, does not…

A: Accounting estimate means the technique used to measure or evaluate the items in the financial…

Q: The firm recognizes an expense when the following condition(s) hold(s):   Select one: A. The…

A: Introduction:- Generally expenses should be recognized in the same period as the revenues relating…

Q: It is appropriate to use the fixed assets turnover ratio to appraise firms' effectiveness in…

A: Financial ratios are the measures that are used by various analysts and investors to estimate and…

Q: When market value of an asset is higher than book value, depreciation is not charged. A) True B)…

A: Meaning of depression. Depreciation is a reduction in the value of asset due to wear and tear,…

Q: In a business combination in which the total fair value of the identifiable assets acquired over…

A: As per IFRS 3  Business combination  The core Principles of business combination states that When…

Q: Defi ning total asset turnover as revenue divided by average total assets, all else equal,…

A: When a company acquires an asset, it records the asset at its historical cost in the balance sheet…

Q: Accounting Which statement is false? Accounting for asset retirement obligations (ARO) apply to both…

A: The given question asked about the correctness of the statement.    Assets retirement obligations:…

Q: What have been the possible reasons for the changes in ROEs ? •Decompose the (Return on Equity) ROE…

A: Return on equity depicts the efficiency of the company in using its shareholder's capital in the…

Q: When it is probably that future economic benefits associated with an asset will flow to the entity,…

A: Accounting standard 1 deals with the disclosure of accounting policies which states that the company…

Q: The standard setters identify three approaches to accounting for the impairment of financial asset…

A: a) ASPE - Incurred loss model and fair value model

Q: According to the principle of conservatism, when faced with uncertainty about the value of an item,…

A: In bookkeeping, the principle of conservatism, otherwise called the doctrine of prudence, is an…

Q: 1. Which statement about negative goodwill is true?   Negative goodwill should be recorded as a…

A: Negative goodwill : The goodwill is negative when the fair value of assets exceeds the amount…

Q: How would you differentiate expenses and Losses? A Expensen is gross infow of ecanomic benefits…

A: SOLUTION- EXPENSES  IS AN INCURRED COST THAT HAS BEEN CONSUMED IN ORDER TO EARN REVENUES . EXAMPLE -…

Q: Where non-current assets are held for sale, they are required to be measured using: the…

A: Non-current assets are held for sale - Non Current Assets are part of the assets in the balance…

Q: Under the Dupont Technique, which of the following is false?     -Asset management, as represented…

A: Du-Pont technique is used widely to decom[ose the activities and efficiency of a firm for evaluating…

Q: Discuss the appropriate treatment in the income statement for the following items: a.    Loss on…

A:

Q: Which of the following applies conservatism to the financial statements of a full cost company?…

A: In accounting, the convention of conservatism, also known as the doctrine of prudence, is a policy…

Q: the best technique to use in valuing a tangible loss is: A) A replacement cost B) Market Values C)…

A: Tangible loss means the direct loss of money or property such as lost wages etc.

Q: How should acquisition related costs such as due diligence and legal costs be accounted for?…

A: As per IFRS3, Acquisition costs such as Advisory cost, Accounting, and due diligence cost, Legal…

Q: ses, companies can use the MACRS depreciation method. B When you change a depreciation estimate,…

A: Answer: Option (A) is Wrong.

Q: Which of the following observations refers to the term differential? Select one: a. Excess of…

A: The question is multiple choice question and related to Consolidated Financial Statements. Required…

Q: A decrease in economic benefits or decrease in assets or increase in liability resulting in decrease…

A: Expenses are decreases in economic benefits during the accounting period in the form of outflows or…

Q: Historical cost is based on actual, not merely possible, transactions. It is the acquisition price…

A: What is historical cost ? A Historical cost is a proportion of significant worth utilized in…

Q: Are the amounts at which fixed assets are reported on the balance sheet, their approximate market…

A: Fixed assets include all those assets which are not purchased for resale purpose. Fixed assets are…

Q: Match the correct term with its definition.

A: Accounting concepts creates framework for financial statement preparation and its reporting.  The…

Q: Neither depreciation on replacement cost nor depreciation adjusted for changes in the purchasing…

A: Depreciation: Depreciation can be defined as the reduction in the value of an asset due to its wear…

Q: Which of the following statements about accounting income and economic income is (are) correct? I.…

A: Accounting profits includes explicit costs only, whereas economic profits includes both explicit and…

Q: Under IFRS, the initial revaluation of equipment when book value exceeds fair value results in a. An…

A: As per International Financial Reporting Standards (IFRS), the company values the property, plant…

Q: If a firm's tangible assets are measured at their fair (intrinsic) value, one must forecast that…

A: Fair (Intrinsic) value: When the price of tangible assets such as buildings, machinery, etc. is…

Q: he cost principle requires that companies record tangible capital assets at: a.fair value. b.book…

A: A historical cost is also known as the original cost which means the cost at which the asset…

Q: Explain how the DuPont system of analysis breaks down return on assets?

A: As per DU point analysis, ROA(retrun on asets)=(Net Income/Sales)*(Sales/Average Assets)

Q: Which of the following is NOT correct regarding the rate of return on assets? a. The rate of…

A: Return on assets measures the profitability of a company relative to its assets. Return on assets =…

Q: Select the investment accounting approach with the ­correct valuation approach:     Not…

A: Fair value: Fair value is the price at which, both seller and buyer agree to exchange the asset. So,…

Q: The term expense represents a decrease in asset that always results in decrease in equity

A: The income statement records the revenues and expenses incurred during the period.

Q: transaction costs

A: All financial assets are initially measured at fair value plus transaction costs, except C :- Fair…

Q: 6. When computing the amount of interest cost to be capitalized, the concept of "avoidable interest"…

A: Capitalized interest represents the interest cost incurred to finance the construction of a…

Q: 1. What are the accounting rules for determining whether to expense certain costs against revenue…

A: Generally Accepted Accounting Principles-: Generally Accepted Accounting Principles (GAAP) is a…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.