To those willing to spend the time to understand it.
Only to those who take an accounting course.
Only to financial analysts and brokers.
Cook, Inc., a manufacturer of tires, has given you its most recent annual report in an effort to obtain a sizable loan. The company is very profitable and appears to have a sound financial position. Based on a report presented on prime-time television last night, you are aware that Cook is a defendant in several lawsuits related to its defective tires that cause vehicles to overturn. The information presented on television is an example of financial information that is
If an investor can use accounting information for two different companies to evaluate the types and amounts of expenses, the information is said to have the quality of
Button Transportation purchases many pieces of office furniture with an individual cost below $200 each. Button chooses to account for these expenditures as expenses when acquired rather than reporting them as property, plant, and equipment on its balance sheet. The company's accountant and independent CPA agree that no accounting principle has been violated. What accounting justification allows Button to expense the furniture?
Madden Company applies the consistency convention. What does this mean?
Madden Co. uses the same names for all its expenses as its competitors.
Madden Co. has selected certain accounting principles that can never be changed.
Madden Co. applies the same accounting principles each accounting period.
Madden Co. applies the same accounting principles as it competitors.
Information that is material means that an error or alternative method of handling a transaction
Would possibly affect the judgment of someone relying on the financial statements
An accountant is uncertain about the best estimate of an amount for a business transaction. If two amounts are about equally likely, the amount least likely to overstate assets and income is selected. Which of the following qualities is characterized by this action?
The qualitative characteristics of accounting data include