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(Q1)Which of the following accounting principles or conventions is contradictory to the GAAP requirement to expense R&D costs immediately?
Which of the following is not a required disclosure regarding intangible assets in the period a company acquires intangible assets?
the rate of return used to estimate the value of goodwill purchased
the cost of any intangible assets acquired, separated into assets subject to amortization, assets not subject to amortization, and goodwill
for assets subject to amortization, the residual value and the weighted-average amortization period
the cost of any research and development acquired and written off, and where it is included in the income statement
According to matching principle the expense should be recorded in the books of accounts in the same period with the corresponding / matching revenue.According to GAAP R&D expense is expensed immideatley in the books of accounts but the benefit of research say in the form of any intangible asset is derived in the future , even sometimes there may be heavy R & D expense which needs to be recognised but there is no corresponding revenue to match the same. This defeats the matching principle
the rate of return used to estimate the value of goodwill purchased
There are mainly 3 disclosures to be made in financial statements as per US GAAP
(a) for amortizable intangible assets the carrying amount, the
amount of any significant residual value, and the weighted-average
(b) for intangible assets not subject to amortization the carrying amount
(c) the amount of research and development assets acquired and written off in the period,
(Q1)Which of the following accounting principles or conventions is contradictory to the GAAP requirement to expense...
1. Which of the following is not a required disclosure regarding intangible assets in the period a company acquires intangible assets? A. the rate of return used to estimate the value of goodwill purchased B. the cost of any intangible assets acquired, separated into assets subject to amortization, assets not subject to amortization, and goodwill C. for assets subject to amortization, the residual value and the weighted-average amortization period D. the cost of any research and development acquired and written...
The SEC's 2003 report to the Congress on "principles-based" accounting observed that the first characteristic of objectives-based standards, dictated by the Sarbanes-Oxley Act, is that any standard must be based on the cost-benefit test. e transparency qualitative characteristics. an improved and consistently applied framework. Question 2 The Purchases account is O a temporary account. O a permanent account. O a subsidiary account. a liability account. Question 3 The Sales account is classified as a contra account. O a liability account...
Which of the following statements is not true? Comparability means using the same accounting principles from year to year within a company. 2) Faithful representation is the quality of information that gives assurance that it is free of error. 3) Relevant accounting information must be capable of making a difference in the decision. 4) The primary objective of financial reporting is to provide financial information that is useful to investors and creditors for making decisions. Question 8 (1 point) Intangible...
-20Accounting,%20Volume%201.12th%20Canadian%20Edition%20.pdf E2.6 (LO 4) videa (Foundational Principles) The foundational principles and assumptions of accounting are as follows: Presentation and Recognition/Derecognition Measurement Disclosure 1. Economic entity 5. Periodicity 10. Full - disclosure 2. Control 6. Monetary 3. Revenue recognition and realization 4. Matching unit 7. Going concern 8. Historical cost 9. Fair value and value in use Instructions For each situation that follows, identify by its number the foundational principle above that is described. a. Allocates expenses to revenues in the...
E 1-15 Multiple choice; concept statements, basic assumptions, principles Determine the response that best completes the following statements or questions. 1. The primary objective of financial reporting is to provide information a. About a firm's management team b. Useful to capital providers C. Concerning the changes in financial position resulting from the income- producing efforts of the entity d. About a firm's financing and investing activities 2. Statements of Financial Accounting Concepts issued by the FASB a. Represent GAAP b....
Matching - 1 point Match the basic assumption or principle with the descriptions below. Presented below are basic assumptions and principles underlying financial reporting. a = Historical cost principle b = Going concern assumption c = Time period (periodicity) assumption d = Full disclosure principle e = Economic Entity assumption 24. The business will continue in operation for the foreseeable future. 25. Assets are recorded at cost and changes in market value are not recorded. 26. Financial information is reported...
Exercise 1 These are the assumptions, principles, and constraints discussed in this and pre- vious chapters. 1. Economic entity assumption. 2. Matching principle. 3. Monetary unit assumption. 4. Time period assumption. 5. Cost principle. 6. Materiality 7. Full disclosure principle. 8. Going concern assumption. 9. Revenue recognition principle. 10. Conservatism. Instructions Identify by number the accounting assumption, principle, or constraint that describes each situation below. Do not use a number more than once. (a) is the rationale for why plant...
Review the transactional information and identify the accounting assumption, principle, and or constraint to which it is related. Select an option below to match with each question: A) Time Period or Periodicity Assumption B) Economic Entity Assumption C) Fair Value D) Revenue and Expense Recognition Principle E) Revenue Recognition Principle F) Cost principle G) Full Disclosure Principle H) Separate or Economic entity Principle I) Expense Recognition Principle 1) The amount of goodwill recorded by a company that purchases another company...
Matching Question 175 Select the appropriate terms for the following statements. Weighs the cost of providing information to financial statement users against the benefits to be derived. Report assets that are actively traded at their market price. 2. 3. Fair value principle Monetary unit assumption Information that has a bearing on a decision. Economic events can be identified with a particular unit of accountability. An item important enough to influence the decision of an investor or creditor. Same accounting principles...
Match the following situations with the accounting principle that best applies. In some cases, more than one principle may apply. A Unit of Measurement G. Realization B. Historical Cost H. Matching C. Going-Concern I. Materiality D. Conservatism J. Consistency E. Objectivity K. Full Disclosure F. Time Period L. Fair Value 1. A large hotel corporation is preparing its vear-end financial statements. Management has informed the certified public accountant that in two months it will begin closing 15 of its hotel...