Why do you believe businesses rely heavily on revenue recognition to inflate profits

Q: Do you agree with the view that a company which reports substantial profits within its statement of…

A: Profit is the income which is earned after deducting all the expenses from the revenues of a period.…

Q: The Question is: True or False & Why?: Comparability across companies will be enhanced since ASC…

A: ASC606 is the new guideline set up by IASB and FASB together to overcome the disparity in revenue…

Q: Explain how a business can earn a positive gross profit on its sales and still have a net loss.

A: Gross profit: It can be defined as the difference between the cost of goods sold and the net sales…

Q: why is profit maximization supposedly not the most important goal of a company

A: Profit Maximization: The process of raising the profit earning capacity of the business is known as…

Q: Do you think the Friedman's statement that the " sole purpose of business is to make profits" is…

A: Answer: According to me "Sole Purpose of Business is to make profits" is not valid. A Business uses…

Q: The amount and trend in gross profit is closely monitered by management in assessing the…

A: Gross Profit = Total Sales revenue - Cost of Goods sold Net Profit = Gross Profit - Operating…

Q: Using profit as the sole guide for corporate action can lead to short term profits but: B a.)…

A: Business may earn initially from customer by charging higher price but in long run the customer will…

Q: Why is the income tax payable not the same as income tax expense?  Why is the income tax expense…

A: Hey, since there are multiple questions posted, we will answer three question. If you want any…

Q: True or False & Why? : Comparability between businesses will be improved since ASC 606 establishes…

A: The Answer

Q: When analyzing a company's financial report, what are the most likely indicators that a company is…

A: A tax is a financial charge imposed by government. It is a source of income for the governments to…

Q: Why do companies don't distribute all their profit

A: Company means a form of business where the share holder invest money in business in form of shares…

Q: In financial analysis there is a possibility that business opportunities for growth will be…

A: Financial analysis is the analysis of the business in order to assess the profitability, stability…

Q: Can you identify a possible explanation for the company’s declining profits? If so, what is it?

A: Company's declining profits can be possible due to overhead expenses.  Overhead costs are the…

Q: T F If a firm’s sales revenues exceed its expenses,the firm has earned a profit

A: The net income is the net profit of the company earned during the period. The net income includes…

Q: Why do you think companies use revenue recognition as a primary means for inflating profits?

A: Revenue Recognition: Revenue recognition is the recording of revenues in the books of the company…

Q: Can a business earn a gross profit but incur a net loss? Explain.

A: Gross Profit: Gross profit represents the revenue after the deduction of cost of goods sold from the…

Q: Gross profit is a measure of the overall profitability of a company. True False

A: Gross profit is a form of profitability measure in business. It is calculated by deducting cost of…

Q: Financial markets: efficient and other.  How are financial firms able to make profits? Under what…

A: Introduction: Usually, financial institutions such as banks and insurance providers raise and pool…

Q: Discuss and explain the difference between profit/loss and cash flow.

A: Given: The difference between the profit/loss and cash flow of the finance of the entity or an…

Q: when a client notices a discrepancy between annual profits calculated by the accountant versus your…

A: 1. Accountant’s Cash-based Profit: The accounting method in which the revenue is the amount of cash…

Q: What factors reduce the effectiveness of companies business plan

A: A business plan is a written document that explains all the things about business objectives and how…

Q: How important is profit? How can a company survive when it isn't making a profit? How can a company…

A: profit is the most important thing for business order to exist for a longer period of time and have…

Q: Explain what "financial distress" means. Let's say that a company is in financial difficulties, and…

A: Introduction: Financial Distress is defined as a scenario in which a company's obligations, such as…

Q: “A company can be profit rich but cash poor” critically evaluate this statement focusing on the…

A: Profit may not always been in the form of cash for a company. A company may have recognized revenue…

Q: The focal point of financial management in a firm is a. The number and types of products or services…

A: Financial management is the management of finances in a firm. It includes three decisions as…

Q: How can you tell of a company is profitable?

A: Profit. of a Company:After deducting all of the costs associated with running a business, the amount…

Q: React to this statement and cite an example “Whether or not it actually makes profits is immaterial.…

A: There are different types of business organizations.

Q: Questions: Does a low return on sales indicate a weak company? (Y/N). Explain your answer. Do…

A: Multi Step statement of comprehensive income shows all incomes and all expenses of the business at…

Q: Using Positive Accounting Theory (PAT), describe the 'efficiency' and 'opportunistic' perspective'…

A: Positive accounting theory is that theory which is concerned with showing the choices of accounting…

Q: Why is pro forma earnings reporting coming under scrutiny? How can you mitigate the "bad press"…

A: Pro forma earnings reporting refers to those financial statements that have hypothetical amounts as…

Q: Where can I find the net profit after tax of a company? I am looking at a balance sheet and I do not…

A: Net profit after tax is to be found on income statement. It is the profit after deducting the tax…

Q: The profitability and financial position of a firm can be judged to be improving, or det competitors…

A: In business there is need of comparing with other similar companies so that better valuation can be…

Q: What is the positive and negative impact of the credit and collection functions on the other parts…

A: Credit refers to the debt and loan that is provided by the company to others at a certain rate of…

Q: What is earnings quality? What are the possible topics or areas that the reported  earnings may not…

A: When you look at a company's earnings, you can see how good they are by ignoring any anomalies,…

Q: t are the main hindrances in valuation estimates in business valuation?

A: Knowing how much an asset is worth and what factors influence its value is essential for making…