Answer:
$101,593.75
Explanation:
Total amortization period = 8 Years = 8 x 12 = 96 months
Number of months of Amortization = 9 months in 2020 + (3*12 months) till 2023 = 9 months + 36 months = 45 months
Premium on bonds payable = Issue Price - Face Value
Premium on bonds payable = ($100,000*103%) - $100,000
Premium on bonds payable = $103,000 - $100,000
Premium on bonds payable = $3,000
Unamortized premium = Premium on bonds payable - Amortized premium
Unamortized premium = $3,000 - $3,000*45/96
Unamortized premium = $3,000 - $1,406.25
Unamortized premium = $1,593.75
Carrying value on December 31,2023 = $100,000 + $1,593.75
Carrying value on December 31,2023 = $101,593.75
Sorting forms of payments
Q; Sort the forms of payment into the two categories
Answer down below
Have money at time of purchase
- cash
- debit card
- check
Borrow money to make purchase
- credit card
Answer:
Have money at time of purchase.
Cash
For cash to be used to purchase something, the person must already have the required amount of cash in their possession already.
Debit Card.
Debit cards pay for purchases by using funds in the owner's bank account. This means that for a purchase to be processed, the owner must have funds in their account in the first place.
Check
This works much like the debit card above. If one wants to use a check, their bank account needs to have funds at the time of purchase so that the funds can pay for the purchase.
Borrow money to make a purchase
Credit Card
Credit card represent a debt owed to the issuing company that will need to be paid off eventually. This means therefore that whenever you use a credit card to make a purchase, you are borrowing the money used to fund the purchase.
Which of the following describes a common factor between the following places where vanilla beans are grown: Mexico, Tahiti, Indonesia, India, Uganda, and Papua New Guinea?
They are all near Central America.
They are all islands.
They are Spanish-speaking.
They are all at least partially tropical.
Answer: they are all least partially tropical
It is generally not a good idea to put a cash advance on your credit card because
It will negatively effect your credit score.
O
Credit card companies charge a higher interest rate (and often an additional fee) on cash advances than they do on
purchases
O Credit cards have no grace periods on cash advances
Student loans must be repaid and grants do not need to be repaid.
Taveras Corporation is currently operating at 50% of its available manufacturing capacity. It uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates: Machine-hours required to support estimated production 215,000 Fixed manufacturing overhead cost $ 3,655,000 Variable manufacturing overhead cost per machine-hour $ 2.00 Required: 1. Compute the plantwide predetermined overhead rate. 2. During the year, Job P90 was started, completed, and sold to the customer for $3,500. The following information was available with respect to this job: Direct materials $ 1,610 Direct labor cost $ 1,155 Machine-hours used 82 Compute the total manufacturing cost assigned to Job P90.
Answer:
1. Plant wide predetermined overhead rate is $19 per hour
2. Manufacturing cost assigned to job P90 is $4,323
Explanation:
1. In order to calculate the predetermined overhead rate based on machine hours expended, the fixed overhead cost would have to be divided by the machine hours and then add up variable overhead cost per machine hour
= [ Fixed manufacturing overhead / Machine hours required to support production ] + Variable manufacturing overhead cost per machine hour
= [$3,655,000/215,000] + $2
= $17 + $2
= $19 per hour
2. Manufacturing cost of job P90
Direct materials
$1,610
Direct labor cost
$1,155
Overhead 82 machine hours × $19
$1,558
Total cost
$4,323
Rubbermaid allows employees to spend a percentage of their working time on special projects. Imagine that, as a manager for Rubbermaid, you have the difficult job of choosing employees for your project team. You have limited positions, and because your team is among the most celebrated at the company, you have more volunteers than roles available. What is the best way to control the conflict
Answer:
Hire an external consultant to pick new team members for you
Explanation:
On the given scenario there are limited project spaces and plenty of volunteers for those positions.
An equitable and impartial method of choosing team members needs to be used to avoid conflict.
The best solution is to hire an external consultant who can be seen as impartial to do the selection.
This way employees will accept the objectivity of the selection since the external consultant does not have any underlying.interest in who occupies the project positions
Rearrange the following contributors to the growth of productivity in descending order of their quantitative importance:______.
economies of scale, quantity of capital per worker, improved resource allocation, education and training, and technological advance.
Answer:
✓Technological advance
✓quantity of capital
✓education and training
✓economies of scale, and improved ✓resource allocation
Explanation:
growth of productivity can be regarded as when the value of outputs that is been produced increased as regards to the level of input after some particular period of time
East Corp. manufactures stereo systems that carry a two-year warranty against defects. Based on past experience, warranty costs are estimated at 4% of sales for the warranty period. During 2005, stereo system sales totaled $3,000,000, and warranty costs of $67,500 were incurred. In its income statement for the year ended December 31, 2005, East should report warranty expense of:
Answer:
$52,500
Explanation:
The cost associated with repair or replacement of a product incase it foes not function after its purchase is termed warranty. It is debited to the warranty expense account and credited to warranty to the warranty liability account
Total sales for the year $3,000,000
Warranty estimated basis 4%
Estimated warranty = $3,000,000 × 4% = $120,000
Warranty cost incurred $67,500
Balance to be recorded for the year
= $120,000 - $67,500
= $52,500
how the equilibrium price and quantity change when a change in demand occurs and the supply stays constant, and when a change in supply occurs and the demand stays constant.
Answer:
because demand is not increaing constant supply is increasing that you ate a bit your amount of food is increasing supply of food chain is not increaing in the same hate also.now understand yourself
1. On January 1, Peter incorporates Peter Stores, Inc., a DVD store. He contributes $25,000 cash. Peter is the sole owner.
2. On January 1, the corporation borrows $12,500 from a bank.
3. On January 1, the business buys inventory (merchandize for sale) in the amount of $5,000 paying cash.
4. On January 1, the business purchases a three-year insurance policy for $1,224 paying cash.
The company also records the following transactions in January:
5. The company buys inventory for $5,000, agreeing to pay within 60 days.
6. The company purchases land for $24,000 by paying cash $6,000 and taking a 10-year mortgage for $18,000 (assume zero interest rate).
7. The company sells half of this land for $12,000. It receives $3,000 cash and the buyer assumes $9,000 of the mortgage; that is, the company is no responsible for this half.
8. Peter receives an acquisition offer of $53,000 for the business; he rejects the offer, because it is evident that the market value of the store’s assets is $56,000.
Required:
Prepare Peter Stores. Inc.'s income statement for January and balance sheet as of January 31.
Answer:
Income statementRevenue $0
Expenses:
Insurance expense ($34)
Net income ($34)
Balance sheetAssets
Cash $28,276
Inventory $10,000
Prepaid insurance $1,190
Land $12,000
Total assets $51,466
Liabilities
Accounts payable $5,000
Notes payable $21,500
Total liabilities $26,500
Equity
Capital $25,000
Retained earnings ($34) $24,966
Total equity
Liabilities + equity $51,466
Explanation:
1. On January 1, Peter incorporates Peter Stores, Inc., a DVD store. He contributes $25,000 cash. Peter is the sole owner.
Dr Cash 25,000
Cr Capital 25,000
2. On January 1, the corporation borrows $12,500 from a bank.
Dr Cash 12,500
Cr Notes payable 12,500
3. On January 1, the business buys inventory (merchandize for sale) in the amount of $5,000 paying cash.
Dr Inventory 5,000
Cr Cash 5,000
4. On January 1, the business purchases a three-year insurance policy for $1,224 paying cash.
Dr Prepaid insurance 1,224
Cr Cash 1,224
5. The company buys inventory for $5,000, agreeing to pay within 60 days.
Dr Inventory 5,000
Cr Account payable 5,000
6. The company purchases land for $24,000 by paying cash $6,000 and taking a 10-year mortgage for $18,000 (assume zero interest rate).
Dr Land 24,000
Cr Cash 6,000
Cr Notes payable 18,000
7. The company sells half of this land for $12,000. It receives $3,000 cash and the buyer assumes $9,000 of the mortgage; that is, the company is no responsible for this half.
Dr Cash 3,000
Dr Notes payable 9,000
Cr Land 12,000
8. Peter receives an acquisition offer of $53,000 for the business; he rejects the offer, because it is evident that the market value of the store's assets is $56,000.
no journal entry
Expenses:
Insurance expense ($34)Net income ($34)Balance sheetAssets
Cash $28,276Inventory $10,000Prepaid insurance $1,190Land $12,000Total assets $51,466Liabilities
Accounts payable $5,000Notes payable $21,500Total liabilities $26,500Equity
Capital $25,000Retained earnings ($34) $24,966Total equityLiabilities + equity $51,466Explanation:1. Dr. Cash 25,000Cr. Capital 25,000
2. Dr. Cash 12,500Cr. Notes payable 12,500
3. Dr. Inventory 5,000Cr. Cash 5,000
4. Dr. Prepaid insurance 1,224Cr. Cash 1,224
5. Dr. Inventory 5,000Cr. Account payable 5,000
6. Dr. Land 24,000Cr. Cash 6,000
Cr. Notes payable 18,000
7. Dr. Cash 3,000Dr. Notes payable 9,000
Cr. Land 12,000
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Which of the following statements is correct concerning product costs? A. Product costs are shown with current liabilities on the balance sheet. B. Product costs are expensed in the period incurred. C. Product costs are shown with operating expenses on the income statement. D. Product costs are expensed in the period the related product is sold
Answer: D. Product costs are expensed in the period the related product is sold
Explanation:
The statement that is true with regards to product cost is that product costs are expensed in the period the related product is sold.
It should be noted that the account for the cost of goods sold consist of product cost. In a situation whereby goods are not sold, the goods will be carried to the next period.
The total cost accumulated in the sales department using the reciprocal method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar): $150,050. $142,471. $102,222. $122,402. $127,778.
Answer:
$127,778
Explanation:
Calculation for total cost accumulated in the sales department using the reciprocal method
Direct operating cost$70,000
Acturial Cost allocated 24,000
Premium Ratings allocated cost 24,000
Acturial Cost allocated 6400
Premium Ratings allocated cost 2400
Acturial Cost allocated 640
Premium Ratings allocated cost 240
Acturial Cost allocated 64
Premium Ratings allocated cost 24
Acturial Cost allocated 6
Premium Ratings allocated cost 2
Acturial Cost allocated 1
Premium Ratings allocated cost 0
Total cost accumulated $127,778
Therefore total cost accumulated in the sales department using the reciprocal method is $127,778
If a perfectly competitive firm achieves productive efficiency then Group of answer choices the price of the good it sells is equal to the benefit consumers receive from consuming the last unit of the good sold. it will raise its price in order to earn an economic profit. it is producing at minimum efficient scale. it is producing the good it sells at the lowest possible cost.
Answer:
it is producing at minimum efficient scale
Explanation:
A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
Due to the ease of entry and exit in a perfectly competitive market, in the long run, price is equal to the minimum point of the long run average cost curve.
dams Industries holds 54,000 shares of FedEx common stock, which is not a large enough ownership interest to allow Adams to exercise significant influence over FedEx. On December 31, 2021, and December 31, 2022, the market value of the stock is $99 and $110 per share, respectively. What is the appropriate reporting category for this investment and at what amount will it be reported in the 2022 balance sheet
Answer :
Category - Investments in other companies (Non - Current Assets)
Amount - $5,940,000
Explanation:
This Investment represents an Asset (Financial Asset to be specific). Assets are economic resources that are controlled by the entity as a result of past events, which result in the flow of future economic benefit.
Measurement is at the Fair Value Amount that is 54,000 shares x $110 per share = $5,940,000
. Gross Domestic Product (GDP) can be defined as: I. The sum of all incomes while adjusting for indirect business taxes and foreign incomes. II. The market value of goods and services sold in an economy in some time period. III. The total market value of final goods and services produced in an economy in some time period.
Answer:
The total market value of final goods and services produced in an economy in some time period.
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
When exports exceed import there is a trade deficit and when import exceeds import, there is a trade surplus.
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
During 20x5, Medallion Industries anticipates production of 20,000 units, budgeted variable costs of $85,000, and budgeted fixed costs of $45,000. If 15,000 units are actually produced, what is the expected total cost
Answer:
Total cost= $108,750
Explanation:
Giving the following information:
For 20,000 units:
Total budgeted variable cost= $85,000
Total budgeted fixed costs= $45,000
First, we need to calculate the unitary variable cost:
Unitary variable cost= 85,000/20,000= $4.25
The fixed costs remain constant at a total level.
Now, we can determine the total cost for 15,000 units:
Total cost= 4.25*15,000 + 45,000
Total cost= $108,750
Red October Company has 2,000 shares of 6%, $100 par cumulative preferred stock outstanding at December 31, 2016. No dividends have been paid on this stock for 2016 or 2017. Dividends in arrears at December 31, 2017 total:______.
a. $1,200.
b. $12,000.
c. $0.
d. $24,000.
Answer:
d.$24,000
Explanation:
The preferred stock is cumulative, in that preferred stockholders are entitled to arrears of dividends for years in which dividends were not paid let alone declared.
The dividends owed to preferred stockholders were for 2 years , 2016 and 2017, hence, we compute the outstanding preferred stock dividends for the 2 years as follows:
annual preferred stock dividends=number of stocks*par value*dividend rate
number of stocks=2,000
par value=$100
dividend rate=6%
annual preferred stock dividends=2,000*$100*6%
annual preferred stock dividends =$12,000
2 years' dividends=$12,000*2=$24,000
Reynolds Manufacturers Inc. has estimated total factory overhead costs of $134,200 and expected direct labor hours of 12,200 for the current fiscal year. If Job 117 incurs 1,030 direct labor hours, Work in Process will be debited and Factory Overhead will be credited for a.$1,030 b.$134,200 c.$11,330 d.$67,100
Answer:
c. 11,330
Explanation:
With regards to the above, we need to compute first, predetermined overhead rate allocation
= Estimated aggregate overhead / Estimated number of labor hours
= $134,200 / 12,200
= $11 per hour
The overhead cost to be allocated to job no 117 will be;
= Number of direct labor hours × predetermined rate of overhead
= 1,030 × $11
= $11,330
Background information: In 2012, President Obama and Congress debated the issue of taxes and tax cuts.
In this speech, President Obama is discussing the effects of a potential tax increase.
A typical middle-class family of four would see its income taxes go up by $2,200. That's $2,200 out of people's pockets. That means less money for buying groceries, less money for filling prescriptions, less money for buying diapers. . . .
. . . Businesses can't afford it either. . . . Economists predict that if taxes go up on the middle class next year, consumers will spend nearly $200 billion less on things like cars and clothes and furniture - and that obviously means fewer customers. That cuts into business profits.That makes businesses less likely to invest and hire, which means fewer jobs.And that can drag our entire economy down.
—President Barack Obama,
November 28, 2012
Which statements best communicate the main idea of this speech? Check all that apply.
Increased taxation on the middle class will improve the economy.
Lower taxes increase consumer spending.
Increased consumer spending strengthens the economy.
Higher taxes will have a severe impact on citizens.
Spending on social needs is a low priority.
Answer: Lower taxes increase consumer spending.
Increased consumer spending strengthens the economy.
Higher taxes will have a severe impact on citizens
Explanation:
The statement that best illustrates the main idea of the speech by Barack Obama states that higher taxes will have a severe impact on citizens.
What are taxes?Taxes are a small proportion of income of an individual or a group that is paid by them to the government or collection authorities as such, as a part of revenues for the services offered by the government.
In Obama's speech, it has been illustrated that when the rates of taxes are increased, the citizens' ability to spend more decreases and results in downfall of the economy.
Hence, option C holds true regarding taxes as per the speech of Obama.
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Hilton Brews is a company producing instant mixes for all kinds of beverages. It notices that the market for tea has risen due to its potential health benefits. Therefore, Hilton Brews introduces a new line of organically grown and processed teas like green tea or tea with various herb extracts and additional antioxidants. Which of the following organizational growth strategies has been used by Hilton Brews?
A. Product devlopment.
B. Diversification.
C. Market penetration.
D. Market development.
Answer:
Hilton Brews
The organizational growth strategy used by Hilton Brews is:
B. Diversification.
Explanation:
Diversification strategy is the corporate strategy that Hilton Brews has adopted to take advantage of the increased health benefits of teas by introducing a new line of organically grown and processed teas. Diversification strategy is different from other corporate growth strategies which Hilton Brews could have adopted, including market expansion, market penetration, and product development.
Carpenters Company, a manufacturing company, acquired equipment on January 1, 2017 for $510,000. Estimated useful life of the equipment was seven years and the estimated residual value was $18,000. On January 1, 2020, after using the equipment for three years, the total estimated useful life has been revised to nine total years. Residual value remains unchanged. The company uses the straight-line method of depreciation. Calculate the depreciation expense for 2020.
Answer:
$31,238.10
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
($510,000 - $18,000) / 7 = $70,285.71
Depreciation expense from 2017 to December 2019 would be = $70,285.71 x 3 = $210,857.14
Book value at the beginning of 2020 = $510,000 - $210,857.14 = $299,142.86
Depreciation expense from 2020 = ($299,142.86 - $18,000) / 9 = $31,238.10
Which of the following is a product-based business?
O hotels
O clothing
o lawn care
O consulting
Clothing is a product-based business. Thus, option D is correct.
What is a business?Business refers to the activity of creating, purchasing, and reselling goods in order to support oneself financially.
A product-based firm offers tangible items such as apparel or cartons, whereas a service-based company produces a service the consumers require, such as a plumber or advising or making clothes.
Firms add value under a commodity business plan by inventing distinct products to meet specific client demands, and they generate profits by charging a fee for such items. The people will buy the product.
The people were present with the product of the clothes that were present. The person will be based on the clothes that they wear. Therefore, option D is the correct option.
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Cotton Hotel Corporation recently purchased Emporia Hotel and the land on which it is located with the plan to tear down the Emporia Hotel and build a new luxury hotel on the site. The cost of the Emporia Hotel should be
Answer:
c. capitalized as part of the cost of the land.
Explanation:
These are the options for the question
a. depreciated over the period from acquisition to the date the hotel is scheduled to be torn down.
b. written off as an extraordinary loss in the year the hotel is torn down.
c. capitalized as part of the cost of the land.
d. capitalized as part of the cost of the new hotel.
From the question, we are informed about Cotton Hotel Corporation
which recentlyy purchased Emporia Hotel and the land on which it is located with the plan to tear down the Emporia Hotel and build a new luxury hotel on the site. The cost of the Emporia Hotel should be capitalized as part of the cost of the land. In financial accounting, cost of land can be regarded as asset valuation method which can be used to land that shows on the balance sheet of a company. This cost would encompass all amount spent when acquiring the property and other expenses.
,
Industries is calculating its Cost of Goods Manufactured at year-end. The company's accounting records show the following: The Raw Materials Inventory account had a beginning balance of $ 14 comma 000 and an ending balance of $ 16 comma 000 . During the year, the company purchased $ 68 comma 000 of direct materials. Direct labor for the year totaled $ 119 comma 000 , while manufacturing overhead amounted to $ 155 comma 000 . The Work in Process Inventory account had a beginning balance of $ 21 comma 000 and an ending balance of $ 19 comma 000 . Assume that Raw Materials Inventory contains only direct materials. Compute the Cost of Goods Manufactured for the year. (Hint: The first step is to calculate the direct materials used during the year.) "Goodrow"
Answer: $342,000
Explanation:
Cost of goods manufactured = Beginning work in process inventory + Direct materials used + Direct labor + Manufacturing overhead - Ending work in process inventory
Direct materials used = Beginning raw materials inventory + purchases of raw materials - ending raw material inventory
= 14,000 + 68,000 - 16,000
= $66,000
Cost of Goods manufactured:
= 21,000 + 66,000 + 119,000 + 155,000 - 19,000
= $342,000
At the beginning of the year (January 1), Maurice and Sons has $16,300 of common stock outstanding and retained earnings of $2,200. During the year, the company reports net income of $3,410 and pays dividends of $1,550. In addition, the company issues additional common stock for $5,800.
Required: Prepare the statement of stockholders' equity at the end of the year (December 31).
Answer:
See below
Explanation:
Maurice and Sons
Statement of stockholder's equity at the end of the year (December 31)
Particulars Common stock
Retained earnings Total
Beginning
Balance $16,300
$2,200. $18,500
Net income
$3,410. $3,410
Dividend paid
-$1,550. -$1,550
Additional common
Stock $5,800. $5,800
Total
$4,060. $22,100. $26,160
Jumble will issue new common stock to finance an expansion. The existing common stock just paid a $1.50 dividend, and dividends are expected to grow at a constant rate 8% indefinitely. The stock sells for $45, and flotation expenses of $2.25 will be incurred on new shares. What is the cost of new common stock be for Jumble Corp.
Answer:
11.79%
Explanation:
The computation of the cost of the new common stock is given below:
As we know that
The Cost of New common Stock is
= [Expected Dividend ÷ (Price - Floatation cost)] + growth rate
where,
Expected Dividend is
= Current Divided × (1 +Growth rate)
= $1.5 × (1 +0.08)
= $1.62
Now cost of new common stock is
= [$1.62 ÷ ($45 - $2.25)] + 0.08
= ($1.62 ÷ $42.75) + 0.08
= 0.1179
= 11.79%
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month: Direct materials $ 81,000 Direct labor $ 41,000 Variable manufacturing overhead $ 19,800 Fixed manufacturing overhead 31,600 Total manufacturing overhead $ 51,400 Variable selling expense $ 14,400 Fixed selling expense 22,800 Total selling expense $ 37,200 Variable administrative expense $ 5,200 Fixed administrative expense 27,400 Total administrative expense $ 32,600 Required: 1. With respect to cost classifications for preparing financial statements: a. What is the total product cost
Answer:
the total product cost is $153,600
Explanation:
The computation of the total product cost is as follows;
= Direct material cost + direct labor cost + total manufacturing overhead cost
= $81,000 + $41,000 + $31,600
= $153,600
Hence, the total product cost is $153,600
The other values would be ignored for determining the product cost
True or false: small server sections are more typical in fast service operations
Answer:
False
Explanation:
Bigger Servers are more typical than Small ones *for fast operations* because it has more sections,
What is one common consequence across all debt types for delinquent payment
Answer: See explanation
Explanation:
You didn't give the options but I'll try help out.
A loan is said to be "delinquent" when the a borrower does not pay back the loan that was borrowed as at when due.
It should be noted that when a loan is delinquent, it has a negative effect on the credit score of the person and therefore might make it difficult for the person to be able to borrow in the future.
Kevin's boat was wrecked by hurricane Harvey (a federally declared natural disaster). Damage to the boat was estimated at $30,000. The original cost was $25,000. The boat was partially insured, and Kevin received an insurance reimbursement of $15,000. Kevin's adjusted gross income is $50,000, and he had no other losses during the year. What amount can Keith deduct on his tax return for this year
Answer:
A) $4,900
Explanation:
Options are: "A) $4,900 B) $5,000 C) $9,900 D) $14,900"
Particulars Amount
Original cost $25,000
Damage $30,000
Lower of the two is $25,000
Less: Insurance reimbursement $15,000
Actual loss $10,000
Less: Deduction $100
Less: 10% of AGI (10% of 50,000) $5,000
Final Deduction $4,900
Note: Flat $100 is deducted from this amount and also 10% of AGI, i.e 10% of $50,000 is deducted to finally arrive at the deduction.
An entity prepares its financial statements on its income tax basis. The accompanying notes include a summary of significant accounting policies that discusses the basis of presentation and describes how that basis differs from GAAP. The dollar amount of the effects of the difference between the income tax basis and GAAP:________
A) Is required to be included only in the notes to the financial statements.
B) Is required to be included only in the auditor’s report.
C) Is required to be included both in the notes to the financial statements and the auditor’s report.
D) Need not be quantified and included in either the notes to the financial statements or the auditor’s report.
Answer:
D) Need not be quantified and included in either the notes to the financial statements or the auditor’s report.
Explanation:
Accounting principle can be defined as a general guideline to be followed by accountants or financial institutions when they record and report their financial transactions. A change in an accounting principle involves a change in an accounting method used.
GAAP is an acronym for Generally Accepted Accounting Principles, it comprises of the accounting standard, procedures and principles used by public institutions in the United States of America. The U.S GAAP is issued by the Financial Accounting Standards Board (FASB) and adopted by the U.S. Securities and Exchange Commission (SEC). Therefore, when accountants prepare and compile financial statements for public firms, it must be in line with United States of America, Generally Accepted Accounting Principles (GAAP)
In this scenario, an entity prepares its financial statements on its income tax basis. The accompanying notes include a summary of significant accounting policies that discusses the basis of presentation and describes how that basis differs from GAAP. The dollar amount of the effects of the difference between the income tax basis and GAAP need not be quantified and included in either the notes to the financial statements or the auditor’s report.