What pricing and accounting policy choices are predicted by the bonus plan and debt covenant
hypothesis of positive accounting theory in response to increasing crude oil prices? Explain
The pricing and accounting policy choices predicted by
3.) If net income is an unbiased (i.e., noisy) measure of manager performance, less noise enables
a more efficient compensation contract. Explain why. How can accountants reduce noise in net
Less noise means greater precision of net
The topic of the convergence between International Accounting Standards Board (IASB) and
Financial Accounting Standards Board (FASB) has been an ongoing topic within the world
globally. The convergence will not only affect the way U.S. companies
11) Decision usefulness is an important accounting concept.
a.) State the decision usefulness approach to accounting theory.
The decision usefulness approach to accounting theory takes the view that if we cant
(A) Would the revenue overstatements carried out by Mr. Kumar have affected Computer Associates
total income over a period of several years? Explain why or why not.
I think the overstatements carried out by Mr. Kumar would affect Computer Associates total
A. Give reasons why managers would resort to extreme earnings management tactics
such as these.
The reasons why managers would resort to extreme earning management tactics such as the
ones described in the case is to increase profits. Managers manipulatin
A. Evaluate the relevance of each of the three loan loss policies. The majority of bank holding
companies assets are not carried at fair value on the balance sheet. When fair-value accounting
applies, the actual rules differ markedly from pure mark-to
Chapter 12: 1, 5, 6, and 7.
1. Information has both costs and benefits. What are the costs and benefits of information
production to a firm? How much information should the firm produce? Is this amount
necessarily socially optimal?
According to Scott, the
(13) Inventory is another asset for which there is a variety of ways o account under historical
cost accounting, including first-in, last-out; last-in, first out; average cost, act.
a.) How would inventory be accounted for under ideal conditions? In your
5. a) Evaluating the relevance of each of the three loan loss policies.
Applying current standard IAS 39 Financial Instruments: Recognition and Measurement outlines
the requirements for the recognition and measurement of financial assets, financial liabil