6-5 Part C
i. dividends on preferred stock should be deducted from net income.
ii. When acquiring treasury stock, it should be included in the computation for weighted average
number of shares outstanding. Which is used in the denominator of EPS.
A. Explain the meaning of cost, expense, and loss as used for financial reporting in
conformity with GAAP.
Cost: The amount given in consideration of goods received or to be received.
Expense: Outflows of assets or incurrences of liabilities during a peri
What is the conceptual framework?
An attempt by the FASB to develop concepts
useful in guiding the Board in establishing
standards and in providing a frame of
reference for resolving accounting iss
What is income?
Income Recognition and Realization
Quality of earnings
It depends who you ask!
Economic versus Accounting Income
Chapter 3 & $
General Motors and Fords inventory will have older cost & their cost of goods sold will
be represented using the most recent cost. The opposite is true for Honda and DaimlerBenz. I think the FIFO method would be more benefici
A. The term accounting principles in the audit report refers to various principles and
pronouncements that have are being used to guide the auditors work. It is difficult to
define precisely because no single reference source exists for all such princ