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Generally accepted accounting/auditing principles
Importance of generally accepted accounting principles
Generally accepted accounting principles and auditing standards
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According to the Generally Accepted Accounting Principles, T-Shirts by Tommy can account for the accident is to record an extraordinary item. Using the definition from our Intermediate Accounting textbook, extraordinary events are defined as, "
events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence" (Keiso). Because of the nature of the plane crash, and the fact that these types of accidents happen very rarely, it can definitely be categorized as extraordinary. Tommy needs to estimate how much to expense for the loss of the building and other losses associated with the crash. Then he must record this item on his yearly income statement.
If Tommy's business was not going to be operating soon at another location the smart thing to do would be to end the lease so that they would no longer have to pay for the equipment. Tommy, however, has a location where he can be operating shortly so he should consider not recording lease expense on the equipment during its downtime, and distributing it to the rest of the year evenly. It would not make sense to maintain the same lease expense during which time the equipment is not generating revenue; doing so would violate the matching principle. The best way to do this is to allocate the depreciation for the equipment to later periods when the equipment will be up and running. For instance, if we had a $1000 expense each month for equipment depreciation, for the 3 months and 2 weeks the machines will be down, we would readjust the $3500 to the remaining time of our lease. If there were 10 months on the lease after that time, we could add $350 to each of the remaining months.
The situation that Tommy finds himself in is unfortunate, but yet the effects could have been reduced if he had taken a few precautions, in case of an unexpected event, occurred. The first precaution that Tommy could have taken was to produce T-shirts the whole year, not to just increase production before spring break occurs. If he had lots of extra shirts in stock for spring breakers, the week that he will not be able to produce t-shirt because of the crash would not economically affect his business as much because he will still have many shirts to sell. By waiting until the
Moncrief Company agreed to pay Jim Lester 20% of the gross profit made from the 2013 sales of the Zelenex. Between January 1, 2013 and December 28, 2013, Moncrief’s total available units for sale were, 50,000 units of Zelenex for $30.00 per unit ($1,500,000). Also in addition to the former activities, Moncrief sold 35,000 units for $60.00 per unit ($2,100,000). Moncrief Company uses periodic LIFO inventory method as a result, Jim Lester was to receive $210,000. (Textbook pg.469)
...and the useful life of the machine should be calculated. Then, depending on the method used, the total cost of the machine is considered as a long term asset and depreciated over the life expectancy of the asset.
.... (2011). Triangle Shirtwaist fire brought safety changes. Business Insurance, 45(11), 1-18. Retrieved April 22, 2014, from http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=59700942&site=ehost-live&scope=site
Herbert expresses his discontent about how the government doesn’t focus on trying to fix things that really matter, that will actually help improve the economy. His overall point was that our future generations will be the ones facing this money deficit, and if the government doesn’t fix the problem, then future generations to come will find it even more difficult to be able to achieve this American Dream. Others such as Cal Thomas might argue that it’s not fully the governments fault to blame for the economy’s money deficit being so bad because it’s actually our jobs as a society to stand up and do something about it.
The Great Depression often seems very distant to people of the 21st century. This article is a good reminder of potential problems that may reoccur. The article showed in a very literal way the idea that a depression can bring a growing country to its knees. The overall ramifications of the event were never discussed in detail, but the historical significance is that people's lives were put on hold while they tried to struggle through an extremely difficult time.
He felt it was just something that everyone was facing and it will be over soon enough. However, years passed and nothing seemed to get better for Americans. Some of these disadvantages consist of the American economy being negatively affected. For instance, the New Deal turned out to be really expensive and almost double the American debt.
But economically, Roosevelt and his “brains trust” had no idea what they were doing. They attempted one failed intervention after another. The Great Depression was a disaster, and sadly an avoidable one.” (Edwards, 2005)
conclude that the crash was not the sole problem of the depression. It changed the expectations of the future from once a positive view to a negative view. Many economists argued at the time that a sharp decline in international trade following 1930 helped worsen the depression. Many people have the misconception that the great depression was because of the great crash but that was only initially, many other things happe...
The owners of the Triangle Shirtwaist Factory did not care for the needs of factory employees, making them culpable of the employee’s deaths. The owners of the Triangle Shirtwaist Factory did not care for the needs of factory employees, making them culpable of the employee’s deaths. Because Max Blanck and Isaac Harris showed carelessness in terms of caring for the factory, tending to the needs of workers, and a self centered desire of money, they were responsible for the lives that were lost during the Triangle Fire.
There are many responses that a company can have to troubling economic times. They can first weather the storm and survive. They can back up and get driven out of business, or they can grow. The economy has been in recession for many months. It is the job of our company to identify things that can help businesses to make it through these times and hopefully prosper.
Jack McClintock, president and part owner of the company, is considering a proposal to adopt a monthly production level for the coming year. Main Issues: What is the ' The two principal issues that have to be analyzed are: . 1.Should Toy World change from seasonal production to monthly production? The first problem that has to be analyzed is if they have to adopt a policy of level monthly production, or if they have to continue with seasonal production. It has to be studied what are the opportunities and the risks for the company if they adopt the change.
Introduction Accounting technician is an occupation that is needed in many aspects of our society. If you like to work with mathematics, computer and money management, a suitable occupation for you is accounting technician. To achieve your goal, you need to be familiar with the job description and duties, working conditions, education and training program, job opportunities, and financial aspects. Job Description and Duties Accounting technicians keep systematic records of business transactions. For example, they make bank deposits and reconcile records of bank transactions.
Generally Accepted Accounting Practice The main purpose of searching for a new method to estimate cost if due to the erroneous practices of accounting. There is a wide recognition of this problem but most companies still have not gone to a different approach. The GAAP principles do not provide the kind of cost detail and information focus required in today’s capital intensive, automated, and complex manufacturing and distribution. It generates an erroneous and inverse relationship between computed product cost and current production volume. This is the major problem- the inverse relationship between production volume and inventory value because these indirect expenses are all fully charges to the current product. In periods of declining sales, the apparent cost of the product rises, bringing suggestions of price increases in the face of weak sales performance. In good sales periods, apparent cost of product declines, suggesting either a lowering of prices or higher profits. Neither inventory valuation reflects the true cost of manufacturing the product. The typical distribution an accrual accounting practice often distorts operating cost information and performance criteria to accommodate financial policy, management practice, and current tax law requirements. Some manufacturers even overproduce to absorb overhead in the false assumption that this reduces their product cost. Many different methods have been tried to fix this inaccuracy, such as activity bases costing, machine labor costing, process costing, productive hour rate costing, life cycle costing, and technology accounting. All of these methods have common weaknesses. None of these methods isolate the definition of the cost of the product form the definition of the overall performance of the business. All of these techniques cause the apparent cost of the product to vary with volume yet manufacturing has done nothing different when volume increase or decrease. Paradigm Shift One of the major philosophical changes is the conversion of the costing base from the variables of materials, labor, and volume to the constant of time and time use of capital facilities in each operation. By allocating all indirect expenses to time use of facilities, indirect and general and administrative expense can be fully absorbed and the correct share of these costs can be precisely assigned t...
Wikipedia's accurate definition of finance is "The activity of finance is the application of a set of techniques that individuals and organizations (entities) use to manage their financial affairs, particularly the differences between income and expenditure and the risks of their investments" http://en.wikipedia.org/wiki/Finance. I discuss the importance of keeping track and updating financial reports as well as simple bank statements. These are just some of the essentials that I believe we all as a people should acknowledge.
Greene, Jacqueline, and Drehel Dave. The Triangle Shirtwaist Company Fire. 1st. Bearport Publishing, 2007, 352. Print.