1. Five taxes are based on gross payroll. The
costs of these taxes are borne by employees and employers as follows:
mortality tables. The employer contribution
guaranteed benefits defined in the
plan. A defined contr
1. The major components included in the
FASBs definition of liabilities are as follows:
4. Generally, liabilities should be reported at
their net present values rather than at
the amounts that eventually will be paid.
The use of money
1. The users of accounting information can be
divided into two groups: internal users, who
make decisions directly affecting the
inter- nal operations of an enterprise, and
exter- nal users, who use the information to
(a) Subtracted or included in determining net purchases in the Cost of
Goods Sold section
(b) Other revenues and gains
(c) Other revenues and gains
(d) Other expenses and losses
(e) Either extraordinary items or other expenses and losses de
1. (a) A receivable evidenced by a formal,
written promise to pay is classified as a
note receivable; an informal, unsecured
promise to pay is classified as an
appropriate title (e.g., advances to
Accounting for troubled Debt Restructuring
In recent years, liquidity problem, high interest rate and other unfavorable
economic circumstances have forced many companies to be in financial crisis and
leading them into the bankruptcy. Before being forced i
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The Time Value of Money
Discounting Single Sums
We know that receiving $1 today is worth
more than $1 in the future. This is due
to opportunity costs.
The opportunity cost of receiving $1 in
Elvis Products International
For the Year Ended Dec. 31, 2007 ($ in 000's)
Cost of Goods Sold
Selling and G&A Expenses
1. Four questions associated with accounting
for inventory are as follows:
When is inventory considered to
have been purchased?
Similarly, when is inventory considered
to have been sold?
Which costs are considered to be part
of the cos
Financial Reporting .
A Review of the Accounting Cycle .
The Balance Sheet and Notes to the
Financial Statements .
The Income Statement .
Statement of Cash Flows and Articulation .
1. In addition to identifying a companys
weaknesses, financial statement analysis
can be used to predict a companys future
profitability and cash flows based on its
profitability, efficiency, and leverage. For
1. The statement of cash flows reconciles the
difference between the beginning and ending cash balance for a period. The sum of
cash flow from operations, cash flow
from investing, and cash flow from
financing should equal the change
1. Comparability enables users to relate accounting information to a benchmark or
standard. The benchmark may be in the
statements or financial data of the same
firm but for some other time period.
1. A derivative derives its value from
the movements in prices, interest rates, or
ex- change rates associated with other
finan- cial instruments, assets, or liabilities.
In ad- dition, derivative contracts are
often en- t
(10,000 3). The split should be accounted
for as if it had taken place on January 1 of
the earliest year presented.
1. Earnings per share information is used
investors to evaluate the results of
opera- tions of a business and estim
1. Income measurement for financial reporting
purposes is designed to measure as
fairly as possible the increase in equity
arising from operations during the period.
Income measurement for tax purposes is
selected by the company to mi
1. The principal advantages to a lessee in
leasing rather than purchasing property are
(a) Frequently, no down payment is
required to attain access to property
when it is leased. This frees
company capital to be used for
1. Companies make investments in the securities of another company to provide
a safety cushion of available funds and
to store a temporary excess of cash.
Compa- nies also invest in other
companies to earn a return, to secure
1. The basic rights of common stockholders,
unless otherwise restricted in the articles of
incorporation or bylaws, are as follows:
(a) The right to vote in the election of
di- rectors and in the determination of
cer- tain corporate p
1. Depreciation refers to the cost allocation of
tangible long-term assets; depletion
refers to the cost allocation of natural
resources; and amortization refers to the
cost alloca- tion of intangible assets. All
three terms have simi
1. a. The cost of land includes the original
recording, and escrow fees; surveying
assessment taxes; cost of clearing
or grading; and other costs