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2 years ago

according to sfac 5, the four criteria that must be met for an item to be recognized in the basic financial statements are

1 answer:

8 0

These are the 4 main criteria that must be met for an item to be recognized in the basic financial statements according to sfac 5.

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Measurability
Definition
Reliability

<h3>What is meant by financial analysis?</h3>

Financial analysis is the process of examining a company's various finances in order to assess its financial stability and future prospects. Financial analysis assists business owners in determining any necessary courses of action to remain afloat, make a profit or avoid bankruptcy. It also assists investors in deciding whether to invest in your company. During this process, a company's financial statements, such as its income statement and balance sheet, are examined.

1. Vertical

Vertical financial analysis examines the relationship between various items on a financial statement. During one accounting period, for example, one item is measured against another item that is considered the base, and the relationship is expressed as a percentage. Despite the fact that it only accounts for one time period, it can assist you in recognizing changes over time and comparing various entities.

2. Horizontal

Horizontal analysis is the examination of how financial statement figures change over time. To put it another way, it compares one item to another from a different time period. As a result, it can aid in the analysis of a company's finances from one year to the next.

3. Availability of liquidity

Ratios are used in liquidity analysis to determine whether or not a company will be able to repay any debts or other expenses. This type of analysis is useful because if a company is unable to pay off its liabilities, it will face financial difficulties in the near future. Liquidity analysis is especially useful for lenders or creditors who want to know about your financial situation before extending you a loan or credit. In a liquidity analysis, various ratios such as the cash ratio and current ratio are used.

Thus the financial analysis is of different types and can be used according to the need.

For more information on financial analysis, refer to the given link:

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Letter c is correct. <em><u>Higher than the total output that would be produced if the market were a monopoly but lower than the total output that would be produced if the market were perfectly competitive.</u></em>

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In the __________ method, the manager keeps a written record of both favorable and unfavorable actions performed by an employee

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In the critical incident method, the manager keeps a written record of both favorable and unfavorable actions performed by an employee during the entire rating period.

<h3>What is critical incident method?</h3>

Critical incident method is an appraisal methods used for an employee.

The technique helps to check and analyze the behavior of an employee in a given company over a period of time.

This record can help to take critical actions and make important decision regarding the employee. It can also serve as pointer and reference for future decision.

Therefore, In the critical incident method, the manager keeps a written record of both favorable and unfavorable actions performed by an employee during the entire rating period

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