christian yimgnia hw2 - c) Consistency in this case because...

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13) Accounting data should still be based on cost because assets and liabilities of are to be reported according to their prices. It would be easier to determine income statements for example. And it is always better to have an agreed price for items assets or liabilities rather than have a replacement value that can vary and can sometimes be confusing when it comes to items that have not been sold. BE2-1 a) These changes require recognition in the CPA’s audit report because they are using a different inventory method because numbers and information will be changing too. b) This case is more with consistency even thought they are dropping a subsidiary. However it doesn’t mean they changed their accounting methods.
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Unformatted text preview: c) Consistency in this case because the same accounting principles would be used in this case d) CPAs audit report is definitely recognized in this case because a different method of valuating inventory is used. BE2-3 a) retained earnings : Revenues b) sales: distribution to owners c) additional paid in capital: Comprehensive income d) inventory: Assets e) depreciation: Assets f) loss on sale of equipment: Losses g) interest payable: Equity h) dividends: Liabilities i) gain on sale of investment: Gains j) issuance of common stock: Investment by owners BE2-7 a) industry practices b) conservatism c) materiality d) cost-benefit relationship...
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This note was uploaded on 04/14/2011 for the course ACCT 3202 taught by Professor Kenmichael during the Spring '11 term at University of Minnesota Duluth.

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christian yimgnia hw2 - c) Consistency in this case because...

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