Financial accounting theory chapter7实证会计理论ppt课件

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Financial Accounting TheoryCraig Deegan：财务会计theorycraig迪根

Criticisms of inductive method
• ‘… concentrates on the status quo, is reactionary in attitude and cannot provide a basis upon which current practice may be evaluated or from which future improvements may be deduced’ (Gray, Owen & Maunders 1987, p. 66)
– we should critically evaluate theories before accepting them
Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting Theory 2e by Deegan
1-7
Early development of accounting theory
• Relied upon the process of induction
– development of ideas or theories through observation
• 1920s to 1960s theories developed from observing what accountants did in practice
1-2
Learning objectives (cont.)
– theories, including theories of accounting, are developed as a result of applying various value judgements and that acceptance of one theory, in preference to others, will in part be tied to one’s own value judgements

Financial Accounting (7)

Internal Control
Question
Internal control is used in a business to enhance the accuracy and reliability of its accounting records and to:
a. safeguard its assets.
LO 2
Principles of Internal Control Activities
HUMAN RESOURCE CONTROLS
Bond employees who handle cash. Rotate employees’ duties and require
vacations.
b. prevent fraud.
c. produce correct financial statements.
d. deter employee dishonesty.
7-6
LO 1
Internal Control
Five Primary Components:
●
● ● ● ●
Control environment.
Companies should use
prenumbered documents, and
all documents should be
accounted for.
Employees should promptly
forward source documents for
accounting entries to the accounting department.
only one person is responsible for a given task.

financial accounting第七章PPT课件

$8
(现金盈亏账户)
Cr sales
$3150
Change fund，求解释
2020/10/13
4
Internal control of cash payments
A voucher system is a set of procedures
for authorizing and recording liabilities and cash payments.
2020/10/13
7
Cash balance according to depositor’s records …...........$xxxx ③Add :addtions by bank not recorded by depositor…$xx Depositor errors……………………………………xx xx $xxxx ④Deduct:deductions by bank not recorded by depositor.$xx Depositor errors……………………………………xx xx
from cash sales
in the mail
2020/10/13
3
eg：the entry records a clerk’s cash sales of
$3,150 when the actual cash on hand is
$3,142
Dr Cash
$3142
Cash Short and Over
many transactions either directly or indirectly affect the receipt or the payment of cash.

财务分析-财务分析与证券定价(英文)chapter7 精品

For Financial Assets (FA)
FAt FAt1 Ct It it dt
For financial obli Nhomakorabeaations (FO)
FOt FOt1 Ct It it dt
(it is interest paid)
For given interest payments and net dividends, cash flow from operations (C) reduces borrowing and cash investment (I) increases it
C (I) C-I
d
F d+F
Balance Sheet
Assets Operating assets Financial assets Total Assets
OA FA OA + FA
Equities
Operating liabilities
OL
Financial obligations
FO
Common stockholders’ equity
The Firm
Net Financial
Assets
(NFA)
Capital Markets
F
Debt
Holders or
Issuers
d
Share
Holders
Financing Activities
• F is net cash flow to debt holders (or issuers) • d is net dividend to shareholders
• The difference between operating and financing aspects of a business

威廉斯科特Scott财务会计理论(第七版)全套PPT课件

• Fair value accounting guidance during liquidity pricing • Increased use of internal estimates (value-in-use) • Increased use of cost-based valuation
1-4 Copyright © 2015 Pearson Canada Inc.
1.2 Collapse of the Stock Market Boom of Late 1990s
• Enron • WorldCom • Collapse of public confidence in capital markets • Effects on financial reporting
– Liquidity risk
• Liquidity pricing
– Counterparty risk
>> Continued
1-6 Copyright © 2015 Pearson Canada Inc.
Market Meltdowns, 2007-2008 (continued)
• Financial accounting issues leading up to the market meltdowns
• Off-balance sheet liabilities • Use of expected loss notes to avoid consolidation of
structured investment vehicles • Was disclosure of off-balance sheet liabilities adequate?

Financial Accounting 7e Libby Test bank ch.1

True / False Questions1. Accounting is a system that collects and processes financial information about an organization and reports that information to decision makers.TRUEAACSB Tag: CommunicationsDifficulty: EasyL.O.: 12. Assets on the balance sheet are recorded at market value or replacement cost.FALSEAACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 13. In accounting and reporting for a business entity, the accounting and reporting for the business must be kept separate from other economic affairs of its owners.TRUEAACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 14. The accounting period in which service revenue is recognized (i.e., revenue for services rendered) is generally the period in which the cash is collected.FALSEAACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 15. Total assets are $70,000, total liabilities, $40,000 and contributed capital is $20,000; therefore, retained earnings are $15,000.FALSEAACSB Tag: AnalyticDifficulty: MediumL.O.: 16. The payment of a cash dividend to stockholders increases stockholders' equity.FALSEAACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 17. The accounting model for the balance sheet is: Assets + Liabilities = Stockholders' Equity. FALSEAACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 18. A decision maker who wants to understand a company's financial statements must carefully read the notes to the financial statements because the notes provide useful supplemental information.TRUEAACSB Tag: CommunicationsDifficulty: EasyL.O.: 19. The financial statement that shows an entity's economic resources and its liabilities is the statement of cash flows.FALSEAACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 110. Companies prepare financial statements at the end of each year and more often as needed. TRUEAACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 111. A note payable is a borrowing instrument that generally does not involve the payment of interest.FALSEAACSB Tag: Reflective ThinkingDifficulty: HardL.O.: 112. The amount of cash paid by a business for office utilities would be reported on the statement of cash flows as an operating activity.TRUEAACSB Tag: Reflective ThinkingDifficulty: HardL.O.: 113. The income statement equation is Expenses Revenues = Net Income.FALSEAACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 114. Generally accepted accounting principles almost never change once created.FALSEAACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 215. The Financial Accounting Standards Board (FASB) is an agency of the federal government that establishes generally accepted accounting principles for businesses. FALSEAACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 216. Since 2002, there has been substantial movement to develop international financial reporting standards.TRUEAACSB Tag: DiversityDifficulty: MediumL.O.: 217. An audit guarantees that the financial statements are free of all misstatements.FALSEAACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 318. An auditor who fails to detect a material misstatement of a business's financial statements may be sued by anyone who suffered a loss from relying on the financial statements. TRUEAACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 419. In terms of economic importance, partnerships are the dominant form of organization in the U.S. because of their ease of formation.FALSEAACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: Sup A20. One of the advantages of a corporation when compared to a partnership is the limited liability of the owners.TRUEAACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: Sup AMultiple Choice Questions21. The primary purpose of the balance sheet is toA. measure the net income of a business up to a particular point in time.B. report the difference between cash inflows and cash outflows for the period.C. report the financial position of the reporting entity at a particular point in time.D. report the current value of the business.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 122. The Beta Corporation had 2009 revenues of $200,000, expenses of $140,000, and an income tax rate of 30 percent. Net income after taxes would beA. $60,000.B. $18,000.C. $42,000.D. $48,000.AACSB Tag: AnalyticDifficulty: HardL.O.: 123. Atlantic Corporation reported the following amounts at the end of the first year of operations: contributed capital $100,000; sales revenue $400,000; total assets $300,000; $20,000 dividends; and total liabilities $160,000. Retained earnings and total expenses would beA. retained earnings $40,000 and expenses $340,000.B. retained earnings $60,000 and expenses $320,000.C. retained earnings $140,000 and expenses $240,000.D. retained earnings $160,000 and expenses $220,000.AACSB Tag: AnalyticDifficulty: HardL.O.: 124. The financial statement that reports the financial position of a business is theA. income statement.B. balance sheet.C. statement of cash flows.D. footnotes to the financial statements.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 125. Which of the following reports the cash inflows, cash outflows, and change in cash for period?A. Income statement.B. Balance sheet.C. Statement of cash flows.D. Auditor's report.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 126. For a business, a supplierA. is a company or individual that owns shares of the business.B. is a company or individual to whom the business sells goods or services.C. provides goods and services used by the business.D. makes loans to the company to help finance its activities.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 127. For a business, an example of an internal decision maker isA. a loan officer at a bank.B. a supplier who sells goods to the company on account.C. one of the business's long-term customers.D. one of the business's managers.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 128. Financial accountingA. provides information primarily for external decision makers.B. is required for corporations but probably would not be done by other business entities.C. provides information primarily for the use of managers of the company.D. has been practiced in this country for approximately the last 15 years.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 129. Accounting information developed primarily for internal decision makers is calledA. management accounting.B. risk accounting.C. auditing.D. financial accounting.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 130. What financial statement would you look at to determine the dividends declared by a business?A. income statement.B. statement of retained earnings.C. statement of cash flows.D. balance sheet.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 131. Which of Chao's financial statements would you look at to determine whether Chao will be able to pay for the goods when payment is due in 30 days?A. income statement.B. balance sheet.C. statement of retained earnings.D. statement of cash flows.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 132. Which of the following is not considered to be a liability?A. accounts payableB. notes payableC. wages payableD. cost of goods soldAACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 133. A business's assets areA. equal to liabilities minus stockholders' equity.B. the economic resources of the business.C. Reported at current cost.D. Reported on the income statement.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 134. Assets for a particular business might includeA. cash, accounts payable, and notes payable.B. cash, retained earnings, and accounts receivable.C. cash, accounts receivable, and inventory.D. inventories, property and equipment, and contributed capital.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 135. A business's balance sheet cannot be used to accurately predict what the business might be sold for becauseA. it identifies all the revenues and expenses of the business.B. assets are generally listed on the balance sheet at their historical cost, not their current value.C. it gives the results of operations for the current period.D. some of the assets and liabilities on the balance sheet may actually be those of another entity.AACSB Tag: Reflective ThinkingDifficulty: HardL.O.: 136. Liabilities and stockholders' equity areA. sources of financing for economic resources.B. economic resources used by a business entity.C. increases in assets resulting from profitable operations.D. shown on the income statement in calculating net income.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 137. The accounting equation (balance sheet equation) isA. Assets + Liabilities = Stockholders' equity.B. Assets + Stockholder's equity = Liabilities.C. Assets = Liabilities + Stockholders' equity.D. Revenues Expenses = Net income.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 138. Downard Bank, in deciding whether to make a loan to Rodney Company, would be interested in the amount of liabilities Rodney has on its balance sheet becauseA. the liabilities represent resources that could be used to repay the loan.B. if Rodney already has many other obligations, it might not be able to repay the loan.C. existing liabilities give an indication of how profitable Rodney has been in the past.D. Downard would be interested in the amount of Rodney's assets but not the amount of liabilities.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 139. The two categories of stockholders' equity usually found on the balance sheet of a corporation areA. contributed capital and long-term liabilities.B. contributed capital and property, plant, and equipment.C. retained earnings and notes payable.D. contributed capital and retained earnings.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 140. Which financial statement for a business would you look at to determine the company's earnings performance during an accounting period?A. balance sheet.B. statement of retained earnings.C. income statement.D. statement of cash flows.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 141. The income statement equation isA. Assets Liabilities = Stockholders' Equity.B. Assets + Stockholders' equity = Liabilities.C. Net income = Revenues Expenses.D. Expenses Net income = Revenues.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 142. Most businesses earn revenuesA. when they collect accounts receivable.B. through sales of goods or services to customers.C. by borrowing money from a bank.D. by selling shares of stock to stockholders.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 143. Accounts receivable represents:A. amounts which are owed to the company by its customers resulting from credit sales.B. amounts which are owed by the company to its suppliers for past purchases.C. amounts which have been borrowed to finance operations.D. amounts which are due to stockholders.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 144. InventoriesA. are an asset.B. result from paying for a product that has now been sold to a customer.C. will result in a liability being charged sometime in the future.D. are an expense.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 145. The amount of revenue recognized in the income statement by a company that sells goods to customers would beA. the cash collected from customers during the current period.B. total sales, both cash and credit sales, for the period.C. total sales minus beginning amount of accounts receivable.D. the amount of cash collected plus the beginning amount of accounts receivable.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 146. On January 1, 2009 Mammoth Corporation had retained earnings of $4,000,000. During 2009, they reported net income of $750,000 and dividends of $100,000. What is the amount of Mammoth's retained earnings at the end of 2009?A. $4,000,000B. $4,450,000C. $4,650,000D. $4,850,000AACSB Tag: AnalyticDifficulty: MediumL.O.: 147. What are the categories of cash flows that appear on a statement of cash flows?A. cash flows from investing, financing, and service activitiesB. cash flows from operating, production, and internal activitiesC. cash flows from financing, production, and growth activitiesD. cash flows from operating, investing, and financing activitiesAACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 148. On the statement of cash flows, an amount paid for utilities would be classified asA. an operating activity.B. an investing activity.C. a financing activity.D. a production activity.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 149. A company would report a net loss whenA. retained earnings decreased due to paying dividends to stockholders.B. its assets decreased during an accounting period.C. its liabilities increased during an accounting period.D. its expenses exceeded its revenues for an accounting period.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 150. The amount of insurance expense reported on the income statement isA. the amount of cash paid for insurance in the current period.B. the amount of cash paid for insurance in the current period less any unpaid insurance at the end of the period.C. the amount of insurance used up (incurred) in the current period to help generate revenue.D. an increase in net income.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 151. What events cause changes in a corporation's retained earnings?A. Net income or net loss and declaration of dividends.B. Declaration of dividends and issuance of stock to new stockholders.C. Net income, issuance of stock, and borrowing from a bank.D. Declaration of dividends and purchase of new machinery.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 152. The operating activities section is often believed to be the most important part of a statement of cash flows becauseA. it gives the most information about how operations have been financed.B. it shows the dividends that have been paid to stockholders.C. it indicates a company's ability to generate cash from sales to meet current cash payments for goods or services.D. it shows the net increase or decrease in cash during the period.AACSB Tag: Reflective ThinkingDifficulty: HardL.O.: 153. If you wanted to know what accounting rules a company follows related to its inventory, where would you look?A. the balance sheetB. the income statementC. the notes to the financial statementsD. the headings to the financial statementsAACSB Tag: CommunicationsDifficulty: EasyL.O.: 154. At the beginning of 2009, Buck Corporation had assets of $540,000 and liabilities of $320,000. During the year, assets increased by $50,000 and liabilities decreased by $10,000. What was the total amount of stockholders' equity at the end of 2009?A. $220,000B. $280,000C. $380,000D. $500,000AACSB Tag: AnalyticDifficulty: MediumL.O.: 155. The term used for economic resources owned by an entity as a result of past transactions isA. assets.B. liabilities.C. revenues.D. retained earnings.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 156. How are the differing claims of creditors and investors recognized by a corporation?A. The claims of creditors are liabilities; those of investors are assets.B. The claims of both creditors and investors are liabilities, but only the claims of investors are considered to be long term.C. The claims of creditors are liabilities; the claims of investors are recorded as stockholders' equity.D. The claims of creditors and investors are considered to be essentially equivalent.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 157. In what order would the items on the balance sheet appear?A. assets, retained earnings, liabilities, contributed capitalB. contributed capital, retained earnings, liabilities, assetsC. assets, liabilities, contributed capital, retained earningsD. contributed capital, assets, liabilities, retained earningsAACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 158. Which of the following would increase retained earnings?A. an increase to an expenseB. an increase to a revenueC. a cash dividendD. issuance of additional common stockAACSB Tag: Reflective ThinkingDifficulty: HardL.O.: 159. The ending retained earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. The company had declared a dividend of $1.3 million during the year. What was the net income earned during the year?A. $1.9 millionB. $3.2 millionC. $4.5 billionD. There is not enough information given to determine net income.AACSB Tag: AnalyticDifficulty: HardL.O.: 160. Which of the following items is an expense?A. Accounts PayableB. Cost of Goods SoldC. Accounts ReceivableD. Sales RevenueAACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 161. Which of the following activities would cause investors to overpay for the acquisition of a company from its current owners?A. Overstated accounts payable and understated inventoryB. Understated revenues and overstated expensesC. Understated assets and overstated expensesD. Overstated accounts payable and overstated inventoryAACSB Tag: Reflective ThinkingDifficulty: HardL.O.: 162. The government regulatory agency that has the legal authority to prescribe financial reporting requirements for corporations that sell their securities to the public is theA. FASB.B. FTC.C. SEC.D. APB.AACSB Tag: CommunicationsDifficulty: EasyL.O.: 263. The part of the federal government that has broad powers to determine measurement rules for financial statements of public companies isA. the Internal Revenue Service.B. the Securities and Exchange Commission.C. the General Accounting Office.D. the Supreme Court.AACSB Tag: CommunicationsDifficulty: EasyL.O.: 264. Identify the potential economic consequences of the public learning a company did not follow generally accepted accounting principles (GAAP).A. It could increase the stock price of the company.B. It could increase management and employee bonuses.C. It could result in legal liability for the company.D. It could increase a company's market share.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 265. The nature of generally accepted accounting principles (GAAP) is important to large corporations becauseA. a change in GAAP will not likely affect the selling price of the company's stock.B. a change in GAAP will not likely affect the amount of bonuses paid to managers and employees.C. a change in GAAP will not likely affect a corporation's competitive position.D. a change in GAAP will likely affect a company's financial statementsAACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 266. The International Accounting Standards Board has worked to develop global accounting standards known asA. generally accepted accounting principles.B. globally accepted financial standards.C. international financial reporting standards.D. worldwide financial standards.AACSB Tag: DiversityDifficulty: MediumL.O.: 267. Which of the following statements is true about the price earnings (P/E) ratio?A. It is a ratio of importance to creditors.B. A high P/E ratio indicates investors have little confidence in the future earnings potential of the company.C. The P/E ratio could be used to approximate the value investors would be willing to pay for the company's acquisition from existing owners.D. The P/E ratio is of value is estimating future dividend payments.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 368. Charlie Company bought Tolar Company for $2,000,000. If Tolar's income was understated by $10,000 and the P/E ratio is 5, how much should Charlie have paid for Tolar?A. $2,000,000B. $2,050,000C. $1,950,000D. $1,990,000AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: 369. What is another name for the P/E ratio?A. Price/earnings marginB. Price/earnings multipleC. Payment/equity marginD. Payment/equity multipleAACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 370. An examination of the financial statements of a business to ensure that they conform with generally accepted accounting principles is calledA. a certification.B. an audit.C. a verification.D. a validation.AACSB Tag: EthicsDifficulty: EasyL.O.: 371. The purpose of an audit is toA. prove the accuracy of an entity's financial statements.B. lend credibility to an entity's financial statements.C. endorse the quality of leadership that managers provide for a corporation.D. establish that a corporation's stock is a sound investment.AACSB Tag: EthicsDifficulty: EasyL.O.: 372. Why do the managers of a corporation hire independent auditors?A. To guarantee annual and quarterly financial statements.B. To handle some personnel issues and problems.C. To audit and report on the fairness of financial statement presentation.D. To lobby the FASB for changes in generally accepted accounting principles.AACSB Tag: EthicsDifficulty: EasyL.O.: 373. The CPA's role in performing audits is important to our society becauseA. auditors provide direct financial advice to potential investors.B. auditors have the primary responsibility for the information contained in financial statements.C. auditors issue reports on the accuracy of each financial transaction.D. an audit of financial statements helps investors and others to know that they can rely on the information presented in the financial statements.AACSB Tag: EthicsDifficulty: EasyL.O.: 374. Which of the following is NOT one of the three steps taken by a corporation to ensure the accuracy of its records?A. implementing a system of controlsB. hiring an independent auditorC. hiring a financial analystD. forming a committee made up of board of directors' members to oversee the recordsAACSB Tag: EthicsDifficulty: MediumL.O.: 375. Which of the following groups has primary responsibility for the information contained in the financial statements?A. the company's managementB. the company's auditorC. the company's investorsD. the SECAACSB Tag: EthicsDifficulty: MediumL.O.: 376. The private sector body recently given the primary responsibility to work out detailed auditing standards is called the:A. FASB.B. SEC.C. PCAOB.D. AICPA.AACSB Tag: EthicsDifficulty: MediumL.O.: 477. Which group maintains the professional code of ethics to which CPAs must adhere?A. AICPAB. FASBC. AAAD. FTCAACSB Tag: EthicsDifficulty: MediumL.O.: 478. One of the disadvantages of a corporation when compared to a partnership is thatA. the stockholders have limited liability.B. the corporation is treated as a separate legal entity from the stockholders.C. the corporation and its stockholders are subject to double taxation.D. the corporation must account for the business's transactions separate and apart from those of the owners.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: Sup A79. Which of the following statements is true about a sole proprietorship?A. The owner and the business are separate legal entities but not separate accounting entities.B. The owner and the business are separate accounting entities but not separate legal entities.C. the owner and the business are separate legal entities and separate accounting entities.D. most large businesses in this country are organized as sole proprietorships.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: Sup A80. For a business organized as a general partnership, which statement is true?A. The owners and the business are separate legal entities.B. Each partner is potentially responsible for the debts of the business.C. Formation of a partnership requires getting a charter from the state of incorporation.D. A partnership is not considered to be a separate accounting entity.AACSB Tag: Reflective ThinkingDifficulty: MediumL.O.: Sup AEssay Questions81. Using the income statement model and the balance sheet model, fill-in the missing amounts for each independent case below. Assume the amounts given are at the end of the company's first year of operation.AACSB Tag: AnalyticDifficulty: MediumL.O.: 182. Gertie's Greenhouse, Inc., a small retail store which sells house plants, started business on January 1, 2009. At the end of January, 2009, the following information was available:A. Using the above information, prepare the income statement for Gertie's Greenhouse for the month ended January 31, 2009.B. What is the amount of cash flows provided by operating activities to be presented on the statement of cash flows?A.B. 38,300 – 15,000 + 1,000 = $24,300OR $75,000 – 45,000 – 5,000 – 250 – 150 – 300 = $24,300AACSB Tag: AnalyticDifficulty: HardL.O.: 183. Indicate on which financial statement you would expect to find each of the following. If an item can be found on more than one statement, list each statement.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 184. For each of the following items that appear on the balance sheet, identify each as an asset(A), liability (L), or element of stockholders' equity (SE). For any item that would not appear on the balance sheet, write the letter, N.AACSB Tag: Reflective ThinkingDifficulty: EasyL.O.: 185. Ryan Corporation began operations at the start of 2008. During the year, it made cash and credit sales totaling $500,000 and collected $420,000 in cash from its customers. It purchased inventory costing $250,000, paid $15,000 for dividends and the cost of goods sold was $210,000. The corporation incurred the following expenses:Required:1. Prepare an income statement showing revenues, expenses, pretax income, income tax expense, and net income for the year ended December 31, 2008.2. Based on the above information, what is the amount of accounts receivable on the balance sheet prepared at the end of 2008?3. Based on the above information, what is the amount of retained earnings on the balance sheet prepared at the end of 2008?1.2. $500,000 – 420,000 = $80,000 Accounts receivable at the end of the year.3. $0 beginning balance + $161,000 net income $15,000 dividends = $146,000.AACSB Tag: AnalyticDifficulty: HardL.O.: 1。

Financial Accounting Theory Instructor's Solutions Manual (2)

CHAPTER 1I NTRODUCTION1.1 The Objective of This Book1.2 Some Historical Perspective1.3 The 2007-2008 Market Meltdowns1.4 Efficient Contracting1.5 A Note on Ethical Behaviour1.6 Rules-Based v. Principles-Based Accounting Standards1.7 The Complexity of Information in Financial Accounting and Reporting 1.8 The Role of Accounting Research1.9 The Importance of Information Asymmetry1.10 The Fundamental Problem of Financial Accounting Theory1.11 Regulation as a Reaction to the Fundamental Problem1.12 The Organization of This Book1.12.1 Ideal Conditions1.12.2 Adverse Selection1.12.3 Moral Hazard1.12.4 Standard Setting1.12.5 The Process of Standard Setting1.13 Relevance of Financial Accounting Theory to Accounting PracticeL EARNING OBJECTIVES AND SUGGESTED TEACHING APPROACHES1. The Broad Outline of the BookI use Figure 1.1 as a template to describe the broad outline of the book. Since the students typically have not had a chance to read Chapter 1 in the first course session, I stick fairly closely to the chapter material.The major points I discuss are:• Accounting in an ideal setting. Here, present-value-basedaccounting is natural. I go over the ideal conditions needed for sucha basis of accounting to be feasible, but do not go into much detailbecause this topic is covered in greater depth in Chapter 2.• An introduction to the concept of information asymmetry andresulting problems of adverse selection and moral hazard. Theseproblems are basic to the book and I feel it is desirable for thestudents to have a “first go” at them at this point. I concentrate onthe intuition underlying the two problems. For example, adverseselection can be illustrated by asking who would be first in line topurchase life insurance if there was no medical examination, orwhat quality of used cars are likely to be brought to market. Formoral hazard I try to pin them down on how hard they would work inthis course if there were no exams.• The environment in which financial accounting and reportingoperates. My main goal at this point is that the students do not takethis environment for granted. I discuss the procedures of standardsetting briefly and point out that this is really a process ofregulation. In the past, there have been well-known cases ofderegulation, such as airlines, trucking, financial institutions, powergeneration. However, we are entering what is likely to be a periodof increasing regulation, at least for financial institutions. Instructorsmay wish to discuss briefly the pros and cons of markets v.regulation (since this book tends to be market-oriented) ofeconomic activity.2. The Concept of InformationBy now, I will have referred to the term “information” several times. I suggest that it is easy to take this term for granted, and call for definitions. This usually generates considerable hesitation by the students. The purpose at this point is simply to get them to realize that information is a complex commodity. Indeed, I make an analogy between the financial accounting and reporting industry and a stereotypical manufacturing industry such as agriculture or automobiles, and ask what is the product of the accounting industry, why is it valuable, how is it quantified? I do not go deeply into the answers to questions like these, since some decision-theoretic machinery needs to be developed (Section 3.3) before a precise definition of information can be given. Nevertheless, I try to end up with the conclusions that information has something to do with improving the process of decision-making, and that it is crucial to the operation of securities markets.3. Relevance to Accounting PracticeMy undergraduate accounting theory classes usually consist of a majority of students who are heading for a professional accounting designation. There are usually also some students heading for careers in management.Since students who are facing professional accounting exams can be quite focused in their learning objectives, it is essential that the nature of the course in relation to these objectives be discussed up front.I begin by pointing out that the book is intended to give the student an appreciation and understanding of the financial reporting environment, which should help with breadth questions on professional exams. I also argue that one’s career continues well beyond attainment of a professional accounting designation, and that the nature of the textbook is longer-run and designed tofoster a critical awareness of the financial accounting environment which is needed if one is to become a thoughtful professional.Arguments such as these can only be pushed so far. Nevertheless, I think it is important to make them. I also point out that the text includes coverage of major accounting standards such as financial instruments, impairment, consolidations, de-recognition, and that they will have the opportunity to learn about these standards on the way through.I also refer the students to Section 1.13, and emphasize that the text recognizes an obligation to convince them that the material is relevant to their careers. To do this, the text explains theoretical concepts in intuitive terms, and illustrates and motivates the concepts based on a series of Theory in Practice vignettes, and problem material based frequently on articles from the financial press and relevant research findings.For the management students in the class, and for the professional accounting students who may some day be managers, I emphasize that the text does not ignore them. Chapters 8 to 11 inclusive (the bottom branch of Figure 1.1) deal with topics of interest to managers, including economic consequences, conflict resolution, executive compensation and earnings management. All of these topics demonstrate that management has a legitimate interest in financial reporting. I also argue that Chapters 2 to 7 inclusive (the top branch of Figure 1.1) are relevant to managers since they give insights into how financial accounting information is used by investors. Finally, since management is a major constituency in standard-setting, a critical awareness of the need for standard setting and the standard-setting process (Chapters 12 and 13) is useful for any manager.I have not had problems with student course evaluations as a result of using the material in this book. In fact, I have constantly been surprised at how far one can push the students in a theoretical direction providing that I rely on the textbook material to give the students an intuitive understanding, and concentrate in classon illustrating, motivating and discussing the application of the concepts. For this, I find that the financial media are helpful sources of current articles which I bring to class to serve as a basis for discussion. Numerous such articles form the basis of most “Theory in Practice” vignettes scattered throughout the text.4. The Structure of Standard-Setting BodiesThis edition continues to orient itself to International Accounting Standards Board (IASB) standards, although attention is also given to several U.S. standards. Instructors may wish to briefly discuss the structure of standard setting bodies at this point.5. Social Issues Underlying RegulationInstructors who wish to dig more deeply into social issues underlying financial reporting and standard setting can usefully spend a class session on the 1982 Merino and Neimark paper (in Section 1.2). This paper raises fundamental issues about the role of financial reporting in society which go well beyond the textbook coverage of this paper, which confines itself largely to a brief description of reporting problems leading up to the great stock market crash of 1929 and the creation of the SEC. It provides food for thought both for those who do and do not favour the present financial reporting environment. For a contrasting view from that of Merino and Neimark, Benston’s 1973 article is also worth assigning.This edition continues its discussion of the Enron and WorldCom financial reporting disasters, since these are still relevant to accounting theory and practice. I continue to include (Section 1.3) a description of the 2007-2008 market meltdowns surrounding financial assets and institutions, since these events are driving many new accounting standards and changes in executive compensation discussed later in the text. In spite of the bewildering collection of acronyms, instructors may wish to discuss these market meltdowns early in the course, since they pervade the book and continue to have major implications for financial accounting.Section 1.5 introduces the topic of ethics. With the extent of accountant and auditor involvement in numerous financial reporting disasters that have come to light since 2000, such as Enron and WorldCom, and more recent criticisms of fair value accounting and off-balance sheet entities, the importance of ethical behaviour is very much apparent. Indeed, ethical behaviour underlies the distinction between rules-based and principles-based accounting standards (Section 1.6). This distinction is important since the IASB constitution commits the IASB to principles-based standards.I emphasize, however, that ethics tends to produce similar behaviour as a longer-run maximization of one’s own interests (although the mind sets are different). Thus, a longer–run view of ethical behaviour quickly turns into questions of full disclosure, usefulness, reputation, and cooperative behaviour. The text tends to emphasize these latter components of professional responsibility. Some instructors may wish to introduce and discuss ethical issues more broadly.6.Some influential accounting academics are critical of the moves by standard setting bodies towards current value accounting. Chapter 8 is devoted to an alternative view, namely efficient contract theory (also called positive accounting theory). A brief introduction to this topic is given in Section 1.4. Instructors who wish to introduce this topic now may wish to discuss why accountants are generally regarded as conservative, whether financial accounting can help to attain strong corporate governance, and whether managers like current value accounting.7.I have not prepared any questions and problems for this chapter. One reason is that I usually like to let the first week of classes pass before giving formal assignments. More fundamentally, I use this first week to describe and motivate the text material, as outlined above, and most of the material in Chapter 1 is covered in greater detail later. However, extensive problem material is provided for the remaining chapters of the book.。

Financial Accounting Chapter 07 Exchange of Non-Monetary Assets1

5
确认和计量 (Recognition and Measurement)
Liu Changkui
换出资产公允价值与其账面价值的差额，应当分别不同情况处理：换出资产为存货的，应当作为销售处理，按照《企业会计准则第14 号—收入》以其公允价值确认收入，同时结转相应的成本。换出资产为固定资产、无形资产的，换出资产公允价值与其账面价值的差额，计入营业外收入或营业外支出。换出资产为长期股权投资的，换出资产公允价值与其账面价值的差额，计入投资损益。
8
确认和计量 (Recognition and Measurement)
Liu Changkui
企业在按照换出资产的账面价值和应支付的相关税费作为换入资产成本的情况下，发生补价的，应当分别下列情况处理：（一）支付补价的，应当以换出资产的账面价值，加上支付的补价和应支付的相关税费，作为换入资产的成本，不确认损益。（二）收到补价的，应当以换出资产的账面价值，减去收到的补价并加上应支付的相关税费，作为换入资产的成本，不确认损益。
Liu Changkui
企业在按照公允价值和应支付的相关税费作为换入资产成本的情况下，发生补价的，应当分别下列情况处理：（一）支付补价的，应当以换出资产的公允价值加上支付的补价（或换入资产的公允价值）和应支付的相关税费，作为换入资产的成本，换入资产成本与换出资产账面价值加支付的补价、应支付的相关税费之和的差额，应当计入当期损益。（二）收到补价的，应当以换出资产的公允价值减去补价（或换入资产的公允价值）加上应支付的相关税费，作为换入资产的成本，换入资产成本加收到的补价之和与换出资产账面价值加应支付的相关税费之和的差额，应当计入当期损益。
9
确认和计量 (Recognition and Measurement)

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Learning Objectives
• In this chapter you will be introduced to
• how a positive theory differs from a normative theory
• the origins of Positive Accounting theory • the perceived role of accounting in minimising the
• some criticisms of PAT
Financial accounting theory chapter7实证会计理论
Positive compared to normative theories
• A positive theory seeks to explain and predict
Financial accounting theory chapter7实证会计理论
PAT defined—continued
• Focuses on relationships between various individuals and how accounting is used to assist in the functioning of these relationships
Financial Accounting Theory
Craig Deegan
Chapter 7 Positive Accounting Theory
Slides written by Michaela Rankin
Financial accounting theory chapter7实证会计理论
• All individuals’ action is driven by self-interest and individuals will act in an opportunistic manner to the extent that the actions will increase their wealth
• capital markets react in an efficient and unbiased manner to publicly available information
• Ball and Brown (1968) paper was crucial to the acceptance of the positive research paradigm
Financial accounting theory chapter7实证会计理论
Positive Accounting Theory defined
• PAT…is concerned with explaining accounting practice. It is designed to explain and predict which firms will and which firms will not use a particular method…but it says nothing as to which method a firm shoulves
• how particular accounting-based agreements with parties such as debtholders and managers can provide incentives for managers to manipulate accounting numbers
• does not incorporate notions of loyalty or morality
Financial accounting theory chapter7实证会计理论
Origins of PAT
• Started coming to prominence in mid 1960s
transaction costs of an organisation • how accounting can be used to reduce the costs
associated with various political processes
Financial accounting theory chapter7实证会计理论
• examples of relationships:
• owners and managers • managers and the firm’s debt providers
Financial accounting theory chapter7实证会计理论
Assumptions underlying PAT
Financial accounting theory chapter7实证会计理论
Origins of PAT—capital markets research
• Development of Efficient Markets Hypothesis (EMH) by Fama and others
particular phenomena • normative theories prescribe how a particular
practice should be undertaken
• the prescription might depart from existing practice
• paradigm shift from normative theories
• dominant research paradigm in 1970s and 1980s
• shift resulted from US reports on business education, and improved computing facilities enabling largescale statistical analysis