1. apply what you’ve learned - managing credit cards and consumerloans

Distinguish between positive and negative confirmations. Under what circumstances would positive confirmations be more appropria

Serhud [2]

Negative confirmation is more frequently employed when the records of the person or business are usually thought to be quite accurate.

<h3>What is the difference between negative and positive confirmations?</h3>

Only when the customer disagrees with the amount owed to the client is a negative confirmation requested. When an account has substantial individual balances or when errors are anticipated due to a high control risk, positive confirmations are typically used.

Negative confirmation is more frequently employed when the records of the person or business are usually thought to be quite accurate. The corporation that receives a negative confirmation is typically thought to have strict internal policies and business procedures. As a result, since auditors typically only need to send out one letter, negative confirmation is far less expensive and time-consuming for them.

Positive confirmation requests, on the other hand, are more complicated since financial documents must be provided, even if the information in the original letter was accurate. Additionally, if there are doubts about the accuracy of the company's books, positive confirmation requests are more likely to be used.

However, because it is more precise and makes sure that everyone is on the same page—or has the same financial information—a positive confirmation letter is more typical in complex transactions. For instance, auditors in lending employ affirmative confirmations from banks and businesses to determine the precise amount of a loan.

Because it is a specific request that the recipient has responded to, a positive confirmation typically represents the financial information better than a negative confirmation. A positive confirmation is tangible proof that the information was confirmed in the event of a disagreement.

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7 0

1 year ago

Measuring a company's business transactions and communicating those measurements for decision-making purposes in the form of fin

telo118 [61]

Answer:

The correct answer is d. accounting cycle.

Explanation:

The accounting cycle, also known as the accounting process or registration flow, is the period in which the Company chronologically and reliably records each transaction in its respective Daily Book in order to analyze, prepare and prepare financial information.

The accounting process is made up of all the steps that must be followed since an accounting event occurs until it is introduced into the system and, therefore, is reflected in the financial statements.

The stages of the accounting cycle begin with the identification of the accounting fact, such as with a sale of merchandise. The next step is to generate an accounting document that supports this transaction and allows it to be reflected in quantified accounting in monetary units and with a specific date.

Once this document is generated (delivery note or invoice) the operation is recorded in the Daily Book. At the end of the accounting cycle, which is usually from January to December, the transactions are transferred to the general ledger. After some regularizations (amortizations, reclassifications between short term and long term, calculation of the result, etc.) the accounting is closed to generate the final financial statements.

8 0

3 years ago

Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per U

olchik [2.2K]

Answer:

Fogerty Company

1. Computation of the Activity Rate for each Activity Cost Pool:

a. Machine setup = $31,590/243 = $130 per setup

b. Special processing = $282,000/4,700 = $60 per machine hour

c. General factory = $700,400/41,200 = $17 per direct labor hour

2. Computation of the Unit Product Cost, using activity-based absorption costing:

Titanium Hubs Sprockets

Direct materials $39.00 $39.00

Direct labor $14.40 $7.20

Overhead $23.93 $7.11

Total unit cost $77.33 $53.31

Explanation:

a) Data:

Titanium Hubs Sprockets

Direct Labor-Hours per Unit 0.80 0.40

Annual Production 29,000 units 45,000 units

Direct materials $39 per unit $12 per unit

Direct labor wage rate is $18 per hour

Total direct labor hours 23,200 hours 18,000 hours

Direct labor cost $417,600 $324,000

Direct labor cost per unit $14.40 $7.20

Direct materials costs $1,131,000 $540,000

Activity costing system for Overhead Costs:

Titanium Hubs Sprockets Total

Activity Costs

Machine setups

(number of setups) $31,590 135 108 243

Special processing

(machine hours) $282,000 4,700 0 4,700

General factory

(direct labor hours) $700,400 23,200 18,000 41,200

Activity Rate:

a. Machine setup = $31,590/243 = $130 per setup

b. Special processing = $282,000/4,700 = $60 per machine hour

c. General factory = $700,400/41,200 = $17 per direct labor hour

d) Determination of overhead per unit cost

Titanium Hubs Sprockets

Machine setup $17,550 $14,040

Special processing $282,000 $0

General factory $394,400 $306,000

Total overhead $693,950 $320,040

Annual Production 29,000 units 45,000 units

Overhead cost per unit $23.929 $7.112

e) Activity-based costing system is a costing technique where costs are grouped into activity pools and the costs to be allocated to each product or service depends on its consumption from the activity pools involved. The identification of activities in an organization is a way of explaining that costs are caused by activities and not by their nature or period incurred.

5 0

3 years ago

On January 1, 2013, Ameen Company purchased a building for $36 million. Ameen uses straight-line depreciation for financial stat

Amiraneli [1.4K]

Answer:

1.Dr Income Tax Expense 22

Cr Income Tax Payable 16

Cr Deferred Tax Liability 6

2.Net Income of Ameen in 2016 = $23

Explanation

1.Preparation of the appropriate journal entry to record Ameena 2016 income taxes

Calculation for Pretax accounting income

Pretax accounting income = $45

Less:Excess Depreciation as per tax = ($5)

($20-$13)-($30-$28)

$7-$5

=$5

Taxable Income = $40

Income tax for the year = 40 × 40%

Income tax for the year= $16

Calculation for Deferred Tax Expense for the year 2016

Deferred Tax Expense for the year 2016 = ($28 - $13) ×40%

Deferred Tax Liability= $15 ×40%

Deferred Tax Liability= $6

Calculation for Income Tax Expense

Income Tax Expense = $16 + $6

Income Tax Expense= $22

Therefore the appropriate journal entry to record Ameena 2016 income taxes will be:

Dr Income Tax Expense $22

Cr Income Tax Payable $16

Cr Deferred Tax Liability $6

2. Calculation for Ameen 2016 net income

Net Income

Accounting Income of Ameen = $45

Less: Total Tax Expense = ($22)

Net Income of Ameen in 2016 = $23

Therefore the Net Income of Ameen in 2016 will be $23

3 0

3 years ago

One advantage of the lifo method is that

tatyana61 [14]

The answer to the question is c

8 0

3 years ago

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