Financial and Managerial Accounting MBA 560 Exam I New

Financial and - Nanine Barnes Financial and Managerial Accounting MBA 560 Exam I Due October 8 2011 1 What does the acronym GAAP stand for Name the

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Nanine Barnes Financial and Managerial Accounting MBA 560 Exam I Due: October 8, 2011 1. What does the acronym “GAAP” stand for? Name the group that has the primary responsibility for establishing US GAAP? a. Generally Accepting Accounting Principles – the group responsible for establishing the US GAAP is the Financial Accounting Standards Board (FASB) 2. Rodriguez Company a. Business liquidity is the process of diving up the assets and returning them to the resource providers. Creditors normally receive first priority in business liquidations. Or in other words, assets are distributed to creditors first, after creditor claims have been satisfied, the remaining assets are distributed to inventors (Owners) of the business. Or in a business ceases to operate, its remaining assets are sold and the sale proceeds are returned to the investors and creditors. b. $47,000.00 c. $20,000.00 d. $27,000.00 3. Explain and describe the differences between the cash method of accounting and the accrual method of accounting. Provide examples of when revenues and expenses are recognized under each method. a. Companies may recognize (report) revenue in the income statement in a different accounting period from the period in which they collect the cash related to the revenue. Furthermore, companies frequently make cash payments for expenses in accounting periods other then the periods in which the expenses are recognized in the income statement. Users of a cash basis accounting recognize (report) revenues and expenses in the period in which cash is collected or paid. It recognizes cash when it receives it. Accrual accounting recognizes revenues and expenses in the period in which they occur, regardless of when cash is collected or paid. i.
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This note was uploaded on 02/19/2012 for the course ACCOUNTING 560 taught by Professor Newell during the Fall '11 term at St. Leo.

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Financial and - Nanine Barnes Financial and Managerial Accounting MBA 560 Exam I Due October 8 2011 1 What does the acronym GAAP stand for Name the

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