Short answer:Define a 'responsibility' in accordance with the Conceptual Framework's explanation, usingexamples.Explain briefly the accounting term "reporting entity" in accordance with the ConceptualFramework for Financial Reporting.Regarding the recording and subsequent revaluation of inventory, please define "the lower ofcost and net realizable value."Briefly explain the “accrual basis assumption" and why financial statements are preparedunder this basis.

As per our protocol we provide solution to the one question only but as you have asked multiple…

Answered: Briefly explain the "accrual basis…

Business

Accounting

Briefly explain the "accrual basis assumption" and why financial statements are prepared under this basis.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter2: Financial Reporting: Its Conceptual Framework

Section: Chapter Questions

Problem 2MC: Which of the following is considered a constraint on useful information by Statement of Financial...

See similar textbooks

Related questions

Q: Xyz Company sells 20000 units SP per unit is 12= VC per unit is 9/= Fixed cost for the period…

A: Variable costs are those costs which changes with change in activity level. Fixed costs are costs…

Q: If total liabilities increased by ¥45,000 and equity increased by ¥10,000 during a period of time,…

A: Stockholders' equity: Stockholders' equity means the net assets available to shareholders after…

Q: Required information [The following information applies to the questions displayed below.] Shown…

A: In order to determine the net income earned during the year, the business entities prepare the…

Q: Balance sheet. Liu Zhang operates Lawson Consulting, which began operations on June 1. The Retained…

A: The balance sheet is a financial statement that depicts the financial position of a business at a…

Q: Cash Accounts receivable Equipment Accounts payable Common stock $12,000 5,900 7,900 4,260 19,640…

A: Introduction: Income statement: All revenues and expenses items are shown in income statement. It…

Q: A Leading manufacturer of Action Figures is about to introduce four new Action Figures. The…

Q: At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $780.…

A: Accounts receivables are those customer accounts to whom business has made credit sales, but amount…

Q: explain how cultural influenced the accountants’ accounting values. What are the cultural dimensions…

A: In the year 1980, Hafostede published his Culture’s Consequences: International Differences in Work…

Q: e following was extracted from the accounting records of a trader on 28 February 2015: Extracts from…

A: Solvency Ratio: This ratio is measuring the long term solvency position of the business concern. The…

Q: what is the total gross profit reported on the job during the month?

A: Allocation Base :— It is basis from which manufacturing Overhead is Allocated to Product.…

Q: On January 1, 2015, ML Company grants 100 cash share appreciation rights to each of its 500…

A: As per our guidelines, only 1 question is solved. Here is the solution for question number 2

Q: LOFAT Co. uses the two-way variance analysis for overhead performance. The budgeted factory overhead…

A: Factory Overhead Applied: One kind of direct overhead expenditure is called an applied overhead, and…

Q: A man earns $15.50 per hour with time and a half for overtime and he worked 48 hours during a recent…

A: Lets understand the basics. For answering the question, we are required to answer using below…

Q: An equipment was bought in the beginning of January 2014 with the Original Cost of $48.000. The…

A: As per our guidelines we are supposed to answer only 3 sub parts

Q: You and a few of your classmates decided to become entrepreneurs. You came up with a great idea for…

A: There are two users of information one is internal as well as external users where as external users…

Q: E. Identify which of the following costs of a product manufacturer would be included in inventories:…

A: For a manufacturer, costs which are directly related with the production and manufacturing of the…

Q: Which of the following statement is not true about the del-credere commission? Select one: a. If…

A: Consignment- Consignment is a sale arrangement in which the consignor sends the goods to the…

Q: Marquess Corporation has provided the following partial listing of costs incurred during May:…

A: Direct Materials 197000 Direct Labors 78000 Depreciation of production equipment 39000…

Q: Watson Company has monthly fixed costs of $86,000 and a 40% contribution margin ratio. If the…

A: Sales to be made for target income = (Fixed Cost + Target Income) / Contribution Margin Ratio

Q: ABC prepares statements on the cash basis. The balance sheet as of December 31, 2021 and income…

A: Accrual basis: Under accrual basis accounting, revenue and expenses are recognized when they are…

Q: If total liabilities increased by ¥45,000 and equity increased by ¥10,000 during a period of time,…

A: Stockholders' equity: Stockholders' equity means the net assets available to shareholders after…

Q: 2) A purchase of equipment for $18 000 also involved freight charges of $500 and installation costs…

A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…

Q: What is the effective interest rate of a simple discount note for $31,200, at an ordinary bank…

A: Introduction: The effective interest rate is the loan usage rate that a borrower pays. It is also…

Q: Employee Gross Pay Karine 3,700 Kelsey 2,100 Dani 3,400 Brooke 2,600 11,800 Total Claim Code 5 4 1…

A: The primary reporting of the business transactions in the books of accounts on daily basis is…

Q: Marvin had the following transactions: Salary $50,000 Compensation of body injury due to…

A: Adjusted gross total income is calculated by subtracting the deductions for AGI or specified to be…

Q: 20. The order in which accounting procedures are performed is A. 1) recording in the journal, 2)…

A: Let us understand the meaning first Journal Entry :- A journal entry is the act of recording any…

Q: Activity 1 Draw up Kelly's balance sheet as at 30 June 2008 from the following information. $ Office…

A: Accounting equation of the business has three important elements. These are assets, liabilities and…

Q: Directions: Establish the following T-Accounts and record the transactions directly into the…

A: Journal entries recording is the first step of accounting process. After that, recorded transactions…

Q: 15. In preparing a trial balance, how many of the above accounts will you list in the debit column…

A: Trial balance refers to a statement or worksheet which show the balance of all debit accounts and…

Q: Analyze the following:

A: Financial statements of the company include the income statement, balance sheet, cash flow…

Q: a. Fixed corporate costs are allocated on the basis of relative revenue. What is the target…

A: In the above question, Fixed costs are allocated on the basis of relative revenue. Therefore to…

Q: You want to buy a $15,000.00 car. You can make a 10% down payment, and will finance the balance with…

A: The Equal Montly installment is calculated with the help of following formula EMI = P × r(1 + r)n…

Q: Identify which from the following scenarios depict relevant cash flows in making the decision…

A: While making decision for accepting two alternatives, we always consider relevant cost and relevant…

Q: Brody Inc. is currently selling a product at P20 per piece. The income statement for the current…

A: Income statement: The income statement shows the company's revenues and expenses earned during the…

Q: Oriole Corporation has 74,000 shares of common stock outstanding. It declares a $2 per share cash…

A: Introduction: Journals: All the business transactions are to be recorded in Journals. Journals are…

Q: Prepare a cash budget per month for the third quarter

A: Cash budget is the budget which is prepared by the company so that it can be estimated about the…

Q: Cloud Shoes Direct Materials Budget For the Month of March 2019 Terms March

A: Introduction: Direct material budget is a useful tool in analyzing and fulfilling production…

Q: Units Cost Beginning inventory Purchase (April 3) Sale (April 10) Purchase (April 18) Purchase…

A: LIFO is last in first out inventory valuation method which says that inventory which is purchased…

Q: Rodgers Company gathered the following reconciling information in preparing its May bank…

A: The management prepares a bank reconciliation statement to match the company's cash balance with the…

Q: n a certain country, electricity charges are calculated based on a the following table: Fixed charge…

A: Total charges will be sum of fixed charge and variable cost Fixed charge given in question = $ 4…

Q: PA8-2 (Algo) Interpreting Disclosure of Allowance for Doubtful Accounts [LO 8-2] Walker Hills…

A: INTRODUCTION: T accounts are depictions of general ledger accounts. The name of the account appears…

Q: break - even point in sales revenue V) Mr. Jasin expects the company to earn an operating income of…

A: A Break-even point refers to the point where the cost and revenue from the business are equal, it…

Q: 13. The process of transferring the information contained in the journal to the ledger is called OA.…

A: Any transaction that happens is first recorded in the journal. Those recorded transactions are then…

Q: How much is the book value per preference share assuming that preference shares are non-cumulative?

A: Book value per share refers to the ratio of total value available for preference shareholder and…

Q: XYZ Inc issued 445 convertible bonds - each at a price of 101.95% of the $1,000 face value. At…

A: A bond may be regarded of as an I.O.U. between the debtor and creditor including the loan…

Q: Sedita Incorporated is working on its cash budget for July. The budgeted beginning cash balance is…

A: The excess cash available is determined by adding the beginning balance of cash and cash receipts…

Q: balance figures. Assume that all sales were on credit. Net Sales Cost of Goods Sold Gross Profit…

A: In the context of the given question, we are required to compute the cost of goods sold for the year…

Q: Helen Corbin's regular hourly wage rate is $16, and she receives an hourly rate of $24 for work in…

A: Gross earnings of workers means total earnings made by worker during the period. It includes regular…

Q: Current assets: Cash $655,500 Marketable securities 759,000 Accounts and notes receivable (net)…

A: Introduction: Working capital: Working capital, which is also known as net working capital (NWC), is…

Q: i 5 Copy Center pays an average wage of $12 per hour to employees for printing and copying jobs and…

A: Selling price = Manufacturing cost + (Manufacturing cost×20%)

Question

Short answer:
Define a 'responsibility' in accordance with the Conceptual Framework's explanation, using
examples.
Explain briefly the accounting term "reporting entity" in accordance with the Conceptual
Framework for Financial Reporting.
Regarding the recording and subsequent revaluation of inventory, please define "the lower of
cost and net realizable value."
Briefly explain the “accrual basis assumption" and why financial statements are prepared
under this basis.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which of the following statements is/ are not true? Financial accounting information can be used for internal reporting purposes. Routine information can be used to make decisions regarding both long term and the short term. Management accounting provides information relevant to decision making, planning, control and evaluation of performances. Cost accounting can only be used to provide inventory valuations for internal reporting.
Which accounting technique gives the most relevant information (net cost or gross invoice price)?
Which accounting method (net cost or gross invoice price) provides the most useful information?
Alpha Co. reports inventory on its balance sheet using the same generally accepted methods as applied by Beta Co. These facts relate most closely to which of the following qualitative characteristics of financial reporting? Verifiability Understandability Materiality Comparability
Which of the following is not an element of the financial statements?A. future potential sales price of inventoryB. assetsC. liabilitiesD. equity
Identify the following questions as most likely to be asked by an internal (I) or an external (E) userof accounting information. Which inventory items are out of stock?
Listed below are several information characteristics and accounting principles and assumptions. Match the letter of each with the appropriate phrase that states its application. (Items a through k may be used more than once.) a. Economic entity assumption b. Going concern assumption c. Monetary unit assumption d. Periodicity assumption e. Historical cost principle f. Revenue recognition principle g. Matching principle h. Full disclosure principle i. Relevance characteristic j. Reliability characteristic. k. Consistency characteristic 1. Stable-dollar assumption (do not use historical cost principle). 2. Earning process completed and realized or realizable. 3. Presentation of error-free information with representational faithfulness. 4. Yearly financial reports. 5. Accruals and deferrals in adjusting and closing process. (Do not use going concern.) 6. Useful standard measuring unit for business transactions. 7. Notes as part of necessary information to a fair presentation. 8. Affairs of…
Distinguish between the revenue/expense and the asset/liability approaches to setting financial reportingstandards
Explain the following measurement bases of the elements of financial statements andindicate how assets and liabilities are measured in each case:i. Historical cost ii. Current cost iii. Realisable value
An auditor would vouch inventory on the inventory status report to the vendor’s invoice toobtain evidence concerning management’s balance assertions abouta. Existence.b. Rights and obligations.c. Completeness.d. Valuation
Under ASC Topic 606 for revenue recognition, which of the following factors is not an indicator of the principal/agent determination? A. Inventory risk. B. Credit risk. C. Shipping terms.
As part of the fundamental characteristic of relevance, an important component of relevance is materality. What does it mean when an item is "immaterial"? Is it usually reported in the financial statements/notes of the financial statements? Explain.