What is meant by the term "economic consequences"? Why does accounting have economic consequences?
Answer to relevant QuestionsSince the underlying economic activity of an entity isn't affected by accounting choices such as when revenue is recognized or how capital assets are depreciated, why does anyone care what accounting choices an entity makes? Why are preferred dividends deducted from net income when calculating earnings per share? Explain. Does earnings per share give an indication of the amount of dividends shareholders can expect to receive? Explain.Why do employee stock options impose a cost on shareholders? You are provided with the following information from the equity section of Tingwick Ltd.'s balance sheet on December 31, 2016:Preferred shares-authorized, 5,000,000 shares; outstanding 2,000,000 shares...$40,000,000 Common ...For the year ended December 31, 2017 Savory Inc. (Savory) reported net income of $750,000. On December 31, 2016, Savory had the following capital stock outstanding:Preferred shares, no par, $5 annual dividend, cumulative, ...
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