Why does GAAP allow management to make estimates of amounts that are included in financial statements? Does

Question:

Why does GAAP allow management to make estimates of amounts that are included in financial statements? Does this improve the usefulness of financial statements? Explain.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial Accounting

ISBN: 9781618533111

6th Edition

Authors: Michelle L. Hanlon, Robert P. Magee, Glenn M. Pfeiffer, Thomas R. Dyckman

See More Books

Question Posted: Oct 15, 2021 03:55 AM

See More Questions

Why are liability accounts that are included in the capital acquisition and repayment cycle audited differently from accounts payable?
As you continue to learn about the details included in financial statements please pick any one publicly traded company that you may be interested in and share with us some of the information below...
The management of a supermarket needs to make estimates of the average daily demand for milk. The following data are available (number of half-gallon containers sold per day): 48, 59, 45, 62, 50, 68,...
What kind of innovation would an improved electric toothbrush be?
An important step in the manufacture of chemical fertilizer is the production of ammonia, according to the reaction: N2 + 3H2 2NH3 a. Calculate the equilibrium constant for this reaction at 150C. b....
What are the types of subsequent events relevant to financial statement audits? Give one example of each type of subsequent event that might materially affect the financial statements.
The strength of an item is known to be normally distributed with mean 200 and unknown variance 2 . A random sample of ten items is taken and their strength measured. The strengths are: 215 186 216...
TJohn Phelps has run a small business for many years and has never kept adequate accounting records. However, a need to obtain a loan from the Bank of Make It Flow, for the expansion of his business...
Show work in terms of time lines or formulas ( No Excel) 4. A investment project generates the following incremental cash inflows over the next 5 years, C = $1.5 million, C = $1.3 million, C3 = $1...
The balance sheet of Reflections Book Shop at April 30, 2021, is as follows: Charles Dryfuss, the owner of the book shop, admits that he is not an accountant. In fact, he couldn?t get the balance...
How might earnings forecasts that are published by financial analysts encourage companies to manage earnings?
Why might companies want to manage earnings? Describe some of the tactics that some companies use to manage earnings.
Find a general term a n for the arithmetic sequence. az = -2. d = 3
Distinguish between: (i) Short-Term Sources of Funds, and (ii) Long-Term Sources of Funds, by giving suitable illustrative examples .Name the various sources of short-term financing.
Describe how ones hypothesis will determine the research design that one will use. A researcher claims that there is a cause-and-effect relation between two variables. You believe that there is a...
8. sulfur tetrachloride 9. azide ion, N, 10. beryllium dichloride 11. boron trifluoride #valence electrons electron-domain geometry molecular geometry bond angles #valence electrons electron-domain...
DEFINITIONS OF STRATEGY and GRAND STRATEGY FOR MY NATIONAL SECURITY POLICY AND STRATEGY COURSE Example definition of strategy - It is the art of gaining advantage and delivering success in an...
There are a variety of functional strategies a company can employ for a specific product, service. They are product strategies, people strategies and support strategies. With this in mind select a...
Rita Jeptoo of Kenya was the first female finisher in the 110th Boston Marathon. She ran the first 10.0 km in a time of 0.5689 h. Assume the race course to be along a straight line. (a) What was her...
Find an equation of the given line. Slope is -2; x-intercept is -2
Indicate whether each account is an asset, a liability, or a stockholders equity account, and whether it would have a normal debit or credit balance. (a) Accounts Receivable. (b) Accounts Payable....
Indicate whether each account is an asset, a liability, or a stockholders equity account, and whether it would have a normal debit or credit balance. (a) Accounts Receivable. (b) Accounts Payable....
For the following transactions, indicate the account debited and the account credited. (a) Supplies are purchased on account. (b) Cash is received on signing a note payable. (c) Employees are paid...
Skysong Inc. has decided to raise additional capital by issuing $185,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale...
! Required information [The following information applies to the questions displayed below.] The following data is provided for Garcon Company and Pepper Company for the year ended December 31....
Problem 1-30 (Algo) Business Combination with Goodwill LO 1-5 Pancor Corporation paid cash of $175,000 to acquire Sink Company's net assets on February 1, 20X3. The balance sheet data for the two...

Why does GAAP allow management to make estimates of amounts that are included in financial statements? Does

Question:

Step by Step Answer:

Estimates are necessary in order to accurately measure a...View the full answer

Financial Accounting

Students also viewed these Business questions