Importance of irritabilty

Politicalization of Accounting Standards

eimsori [14]

Answer: Some accountants have said that politicization in the development and acceptance of generally accepted accounting principles (i.e., rule-making) is taking place. Some use the term “politicization” in a narrow sense to mean the influence by governmental agencies, particularly the Securities and Exchange Commission, on the development of generally accepted accounting principles. Others use it more broadly to mean the compromise that results when the bodies responsible for developing generally accepted accounting principles are pressured by interest groups (SEC, American Accounting Association, businesses through their various organizations, Institute of Management Accountants, financial analysts, bankers, lawyers, and so on).

Instructions

(a) The Committee on Accounting Procedure of the AICPA was established in the mid- to late 1930s

and functioned until 1959, at which time the Accounting Principles Board came into existence. In

1973, the Financial Accounting Standards Board was formed and the APB went out of existence.

Do the reasons these groups were formed, their methods of operation while in existence, and the

reasons for the demise of the first two indicate an increasing politicization (as the term is used in

the broad sense) of accounting standard-setting? Explain your answer by indicating how the CAP,

the APB, and the FASB operated or operate. Cite specific developments that tend to support your

answer.

(b) What arguments can be raised to support the “politicization” of accounting rule-making?

(c) What arguments can be raised against the “politicization” of accounting rule-making?

Solution

a) CAP. The Committee on Accounting Procedure, CAP, which was in existence from 1939 to 1959, was a natural outgrowth of AICPA committees which were in existence during the period 1933 to 1938. The committee was formed in direct response to the criticism received by the accounting profession during the financial crisis of 1929 and the years thereafter. The authorization to issue pronouncements on matters of accounting principles and procedures was based on the belief that the AICPA had the responsibility to establish practices that would become generally accepted by the profession and by corporate management.

Explanation:

7 0

3 years ago

Fy World sold $24,000 of merchandise to Chase Liquidators on December 23, terms FOB destination. This shipment is still in trans

marissa [1.9K]

Answer:

No, no revenue is recorded for items shipped FOB destination until those items reach the buyer.

Explanation:

In this scenario the buyer has not received the good so ownership has not transferred hands. According to shipping FOB terms, till the buyer actually recieves the goods they are technically still the property of FY world.

So Wally will not be able to record revenue against this sale. Rather he will still recognise the merchandise as part of the companie's inventory.

When the buyer recieves the goods he can now record the revenue from the sale.

7 0

4 years ago

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Borchardt Corporation has provided the following data concerning last month’s operations. Direct materials $ 29,000 Direct labor

skad [1K]

Answer: $178,000

Explanation:

The following information can be derived from the question:

We have to first calculate the total manufacturing cost. This will be:

Direct material 29000

Add: Direct labor 58000

Add: manufacturing overhead 82000

Then the manufacturing cost will be:

= 29000 + 58000 + 82000

= 169000

We then add the beginning work in progress and then subtract the ending work in progress. This will be:

Manufacturing cost = 169000

Add: Beginning WIP = 66000

Less: Ending WIP = 57000

= 169000 + 66000 - 57000

= $178,000

7 0

3 years ago

Missouri River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical

musickatia [10]

Answer:

A. Balance Sheet

Merchandise Inventory $5,200 Understated

Current Asset $5,200 Understated

Total Assets $5,200 Understated

Owner's equity $5,200 Understated

B. Income Statement

Cost of merchandise sold $5,200 Overstated

Gross profit $5,200 Understated

Net income $5,200 Understated

C. Income Statement

Cost of merchandise sold $5,200 Understated

Gross profit $5,200 Overstated

Net income $5,200 Overstated

Explanation:

A. Calculation to State the effect of the error on the December 31, 20Y2, balance sheet of Missouri River Supply

BALANCE SHEET

Merchandise Inventory $5,200 Understated

Current Asset $5,200 Understated

Total Assets $5,200 Understated

Owner's equity $5,200 Understated

($238,600-$233,400)

B. Calculation to State the effect of the error on the income statement of Missouri River Supply for the year ended December 31, 20Y2.

INCOME STATEMENT

Cost of merchandise sold $5,200 Overstated

Gross profit $5,200 Understated

Net income $5,200 Understated

($238,600-$233,400)

C. Calculation to determine what would be the effect of the error on the 20Y3 income statement If uncorrected

INCOME STATEMENT

Cost of merchandise sold $5,200 Understated

Gross profit $5,200 Overstated

Net income $5,200 Overstated

($238,600-$233,400)

7 0

3 years ago

If housing prices fall by 4% how much will the value of a $200,000 home decline in price

Flura [38]

Answer:

8000

Explanation:

200000 divided 100 multiply by 4% equal 8000

8 0

2 years ago

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Importance of irritabilty​

Importance of irritabilty