Questions from Financial Accounting

Q: Provide an example of a conservative accounting practice. Why is this

Provide an example of a conservative accounting practice. Why is this practice conservative?

Q: Provide an example of an aggressive accounting practice. Why is this

Provide an example of an aggressive accounting practice. Why is this practice aggressive?

Q: Goal Line Products makes several year-end adjustments, including an

Goal Line Products makes several year-end adjustments, including an increase in the allowance for uncollectible accounts, a write-down of inventory, a decrease in the estimated useful life for depreci...

Q: Explain the difference between vertical and horizontal analysis.

Explain the difference between vertical and horizontal analysis.

Q: Provide an example of an adjustment that improves the income statement and

Provide an example of an adjustment that improves the income statement and the balance sheet, but has no effect on cash flows.

Q: In performing vertical analysis, we express each item in a financial

In performing vertical analysis, we express each item in a financial statement as a percentage of a base amount. What base amount is commonly used for income statement accounts? For balance sheet acco...

Q: Two profitable companies in the same industry have similar total stockholders’ equity

Two profitable companies in the same industry have similar total stockholders’ equity. However, one company has most of its equity balance in common stock, while the other company has most of its equi...

Q: Refer to the information in BE6–12, but now assume

Refer to the information in BE6–12, but now assume that Shankar uses a periodic system to record inventory transactions. Record the inventory purchase on February 2 and the inventory return on Februar...

Q: In performing horizontal analysis, why is it important to look at

In performing horizontal analysis, why is it important to look at both the amount and the percentage change?

Q: Explain why ratios that compare an income statement account with a balance

Explain why ratios that compare an income statement account with a balance sheet account should express the balance sheet account as an average of the beginning and ending balances.