Question
In: Finance
1. The main objective for adjusting the financial statements of a closely held company is: a....
1. The main objective for adjusting the financial statements of a closely held company is:
a. To determine if the owner is taking unreasonable compensation
b. To adjust the financial statements of a business to more closely reflect its true economic financial position and results of operations on a historical and current basis
c. To adjust the financial statements to ensure the financial statements are in conformity with Generally Accepted Accounting Principles
d. To adjust the financial statements so there is consistency in the financial statements over the time period the valuator is analyzing
2. The cost to replace an asset under a particular fact situation is known as:
a. Fair market value
b. Fair value
c. Replacement cost
d. Strategic value
Solutions
Expert Solution
1.
To adjust the financial statements of a business to more closely reflect its true economic financial position and results of operations on a historical and current basis
because investors want the true financial position of the company
2.
c. Replacement cost
because this is the valuation method for such things
jeff jeffy answered 2 years agoRelated Solutions
The main objective of the financial statements is to determine how many employees the company can...
The main objective of the financial statements is
to determine how many employees the company can afford to hire
each year.
to provide useful information to investors and creditors to make
decisions about a business.
to show the profit of a company.
to allow customers to determine whether a company will honour
its product warranties.
The objective of financial statements by an independent auditor is to verify that the financial statements...
The objective of financial statements by an independent auditor
is to verify that the financial statements are free of
misstatements and accurately present the company’s financial
position and results of operation.
True
False
Responsibility for the fair presentation of financial statements
rests with the client’s management, not with the advisor.
True
False
Errors are usually more difficult for an auditor to detect than
irregularities.
True
False
Audits are expected to provide a higher degree of assurance for
the detection of...
The objective of financial statements by an independent auditor is to verify that the financial statements...
The objective of financial statements by an independent auditor
is to verify that the financial statements are free of
misstatements and accurately present the company’s financial
position and results of operation.
True
False
Responsibility for the fair presentation of financial statements
rests with the client’s management, not with the advisor.
True
False
Errors are usually more difficult for an auditor to detect than
irregularities.
True
False
Audits are expected to provide a higher degree of assurance for
the detection of...
Every time a company prepares financial statements, adjusting entries are required. Generally, financial statements are prepared...
Every time a company prepares financial statements, adjusting
entries are required. Generally, financial statements are prepared
at the end of each month, the end of each quarter and at the end of
each year.
Each adjusting entry affects a balance sheet account and an
income statement account. For example, Adjusting Entries for
Prepaid Assets or Fixed Assets involve decreasing the asset account
and increasing the expense account. Adjusting entries are made in
order properly follow GAAP.
Based on your review...
The objective of IAS 1 Presentation of Financial Statements is to prescribe the basis for presentation...
The objective of IAS 1 Presentation of Financial Statements is
to prescribe the basis for presentation of general purpose
financial statements, in order to ensure comparability both with
the enterprise’s own financial statements of previous periods and
with the financial statements of other enterprises. Discuss how far
the objectives of IAS 1 are relevant in today’s environment.
(Approx 1300 words). Support your answer with examples.
A CPA has been asked to audit the financial statements of a publicly held company for...
A CPA has been asked to audit the financial statements of a
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discussions and inquiries among the CPA, the company, the
predecessor auditor, and all other necessary parties have been com-
pleted. The CPA is now preparing an engagement letter.
Cherry & White Bike Company The Cherry & White Bike Company is a small closely-held company...
Cherry & White Bike Company
The Cherry & White Bike Company is a small closely-held
company with two owners. Its two owners, Charlotte and George, have
decided to expand the business. You are CWB’s accountant. Your
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preparing annual financial statements.
CWB wants to take out a loan to expand its business in the
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Able Corporation is a closely held company engaged in the manufacture and retail sales of automotive...
Able Corporation is a closely held company engaged in the
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adoption of an employee fringe benefit plan. While talking to the
company President, you find out the following information.
Employees currently pay their own medical and health insurance...
The Cherry & White Bike Company is a small closely-held company with two owners. Its two...
The Cherry & White Bike Company is a small closely-held
company with two owners. Its two owners, Charlotte and George, have
decided to expand the business. You are CWB’s accountant. Your
responsibilities include maintaining all accounting records and
preparing annual financial statements.
CWB wants to take out a loan to expand its business in the
coming year. The banks and lending institutions require a set of
financial statements prepared under U.S. GAAP to evaluate CWB’s
credit worthiness.
You must prepare...
Explain the financial statements and , the main financial information are needed
Explain the financial statements and , the main financial
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