1.A corporation can continue to operate even if all of its shareholders have been replaced
options:
?Separate legal existence?Limited liability of shareholders?Transferable ownerships rights?Ability to acquire capital?Continuous life?Government regulations?Corporate income tax
Match the foundational accounting concepts and qualitative characteristics with the appropriate phrase describing its application. Note that each item may be used more than once or not at all. 1. Using the Canadian dollar in the financial statements. Monetary Unit 2. An increase in an asset or a decrease in a liability due to ordinary profit-generating activities. Revenue Recognition 3. Accounting information reflects the economic substance of the event or transaction. x Relevance 4. Quarterly financial reports are prepared. Periodicity 5. Cost of goods sold is recognized each time a sale of goods is recognized. Matching 6. The Canadian dollar is used to measure economic activity.E11.5 (LO 4) K Below is a list of specific revenue recognition terms discussed in the chapter. Identify 1. Enforceable right to receive consideration recognit 2. Critical event 3. Performance obligation 4. Allowance for sales returns 5. Variable consideration 6. Earnings process 7. Control 8. Refund liabilityVerifiability (d) Barton Tools Ltd. is using an inventory valuation method that is different from the one used by other companies in its industry. Comparability (e) Hum Dealers Ltd. wants to be very precise and wait six months to measure properly outstanding losses and expenses that would require estimation at the end of the fiscal year. X Relevance (f ) Strong Consulting Ltd. has spent a great deal of money over the years to promote its services to the public, and to get name recognition. Strong did not record any goodwill on its balance sheet for these costs. Not Applicable (g) Shift Services Inc. included the sales and collections on account for the first week of the new fiscal year in the current financial statements. Periodicity (h) In order to earn a bonus, the president of Dragon Delivery Ltd. instructs the accountant to reduce the percentage of accounts receivable used in calculating bad debt expense for the year. Faithful Representation (1) In order to keep the financial statements of Block Brewery Ltd. simple, the accountant prepared an income statement with three lines: Revenue, Expenses, x and Profit and did not include any suiplementary information. Verifiability (j) Wall Retail Ltd. uses estimates rather than a complete physical count of the inventory for purposes of preparing monthly financial statements. Not Applicable k) In order to keep competitors guessing, the accountant of Manning Supply Ltd. prepared financial statements that could only be interpreted by very sophisticated users. UnderstandabilityInstructions end Beside each term above, indicate whether it is related to wsobuenohicutie griwollot ord a. the contract-based approach or " Is youngwai seibrandbrom ail bertogot bid Hisat b. the earnings approach. of fan sell beismutes bris ou bev ely shaw os gail aronibus 2 gner
