(1)
Financial Accounting Standards Board (FASB): FASB is the organization which creates, develops, and approves accounting standards; and administrates generally accepted accounting principles (GAAP).
To mention: The specific citation for accounting for a change in classification due to change in probable settlement outcome.
(2)
Stock appreciation rights (SARs): Stock appreciation rights are the compensation plans provided in the form of rights to receive cash or shares for the appreciated value (difference between the market price of shares on the exercise date and the market price of shares on the grant date). The choice between the cash or shares would be chosen either by employers or employees.
Debit and credit rules:
- Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in
stockholders’ equity accounts. - Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.
To journalize: The entry to record the change in the given circumstance
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INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS
- What has been the main thrust of recent changes in the financial reporting rules following the financial scandals of Enron, Worldcom, etc.? Multiple Choice To improve internal control over companies' financial reporting. To add to the work of the companies' external accountants. To force the companies to disclose more of their internal information. To provide incentives to increase their net income. < Prev 27 of 50 Nextarrow_forwardD4 Many argue that it is unfair to ask the CEO to certify f/s that were prepared by individuals several layers below them? Why?arrow_forwardO 1 75% AT&T LTE 11:52 AM Exit 56 9. Which of the following is NOT a direct action that can be taken by shareholders? Voting to remove the management team Submitting shareholder resolutions directing the board to take specific actions Withholding votes for the board of directors candidates Initiating a proxy contest 10. Which of the following statements is FALSE?arrow_forward
- CALCULATING 3MS COST OF CAPITAL Use online resources to work on this chapters questions. Please note that website information changes over time, and these changes may limit your ability to answer some of these questions. In this chapter, we described how to estimate a companys WACC, which is the weighted average of its costs of debt, preferred stock/ and common equity. Most of the data we need to do this can be found from various data sources on the Internet. Here we walk through the steps used to calculate Minnesota Mining Manufacturings () WACC DISCUSSION QUESTIONS 1. As a first step, we need to estimate what percentage of MMMs capital comes from debt, preferred stock, and common equity This information can be found on the firms latest annual balance sheet. (As of year end 2017, had no preferred stock.) Total debt includes all interest-bearing debt and is the sum of short-term debt and long-term debt. a. Recall that the weights used in the WACC are based on the companys target capital structure. If we assume that the company wants to maintain the same mix of capital that it currently has on its balance sheet, what weights should you use to estimate the WACC for ? b. Find MMMs market capitalization, which is the market value of its common equity. Using the sum of its short-term debt and long-term debt from the balance sheet (we assume that the market value of its debt equals its book value) and its market capitalization, recalculate the firms debt and common equity weights to be used in the WACC equation. These weights are approximations of market-value weights. Be sure not to include accruals in the debt calculation.arrow_forward11 You are a financial analyst working on the IPO for a company. Which are the possible scenarios where conflicts of interest can occur? Select ALL correct answers. You have a personal relationship with the CEO of the company You have an indirect financial interest in the company You previously worked in the company as a co-op student You are presented with corporate opportunities by the companyarrow_forward24-Imagine that you are hired as an accounting consultant in a multinational company. The company is entering into a contract with a supplier. The company asked you to analyze all the information and suggest what should be the right date and payment mode along with all the conditions. This type of situation refers that O a. None of the options O b. You are following normative theory in accounting O c. You are following agency theory O d. You are a follower of positive theory in this situationarrow_forward
- 14 15 Moving to another question will save this response. Question 10 Fatema and Farida are sisters. Fatema is a CPA auditing a client's organization where Farida works. Fatema's indepe. O A. Farida is a sales staff of the client organization. O B. Farida is a nominal director of the client organization. OC. Farida owns 13% of the client organization. O D. All of the above. A Moving to another question will save this response.arrow_forwardal ing the cerns ssage CASES FOR ANALYSIS wor Case 7-1 incisione dovolment ant esinspo by blow wat (1910 The Oracle of Omaha Speaks About Board Members YOY 100W 200odonW Warren Buffett, the chairman and CEO of Berkshire Hathaway, published his annual letter to shareholders on February 22, 2020. The letter discussed how Berkshire Hathaway's business fared throughout 2019 and addressed a number of topics, including corporate governance. In the fol- lowing excerpt, Buffett described the qualities of a meddai yosh good director: pisan I'd like you to know that almost all of the directors I have met over the years have been decent, likable and intelligent. They dressed well, made good neighbors and Bur 76 airil to anot udi sahesh oy oy ndow april baloobs fiet were fine citizens.... Nevertheless, many of these good souls are people whom I would never have chosen to handle money or business matters. It simply was not their game. They, in turn, would never have asked me for help in removing a…arrow_forwardA Moving to another question will save Uis Quèstion 9 Changes in the separate shareholders' equity accounts can be disclosed in all of the following ways, except a O financial statement O note to the financial statements O parenthetical remark O supporting schedule A Moving to another question will save this response. ENarrow_forward
- sh7 please help me Thankyou The Sarbanes-Oxley Act of 2002 was a necessary response to the corporate accounting scandals of the early 2000s. It brought much-needed reform to the regulatory framework for corporate accounting and reporting and increased the accountability of public companies and their auditors. While there are concerns about the costs of compliance and the impact on competitiveness, there is evidence to suggest that SOX has helped prevent fraudulent reporting and improve the quality of financial reporting. Nonetheless, there may be room for further improvement in the act's implementation to address any remaining issues and to ensure continued investor confidence in the US financial markets.arrow_forward42 A professional accountant is one who has expertise in the field of accountancy, achieved through formal education and practical experience. From the options given below identify which one statement does not the quality of professional accountant? a. A professional accountant contributes to the efficient allocation and management of resources b. A professional accountant benefits Board of Directors rather than shareholders c. A professional accountant benefits the society as a whole d. A professional accountant benefits the economyarrow_forward20 From the options given below, who is/are responsible for overseeing the financial reporting process of the company? a. Auditor b. TCWG c. All the options d. Directorsarrow_forward
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