To Recognize or Not to Recognize Essay

There are several reasons why I decided to take Honors English, but I'll start with the one that is the most important to me, and that is college. College is something that is very important to me, and I want to be prepared for it. When I graduate I plan to attend a school out of state or preferably study abroad, possibly Germany. Unfortunately universities tend to be very expensive, especially if it is not in the state you live in. In order for me to be accepted into a top school I will need scholarships, good grades, and an impressive transcript. By taking this honors English course I hope to increase my chances at achieving my goals.

Fraser, L. M., & Ormiston, A. (201). Understanding financial statements (9th ed.). Upper Saddle River, NJ: Prentice Hall.

Managements are required to make judgments, estimates and assumptions that affect the application of policies; assets, liabilities, income and expenses in order to prepare consolidated financial statements. These assumptions and estimates are critical and they are made in

11. Investors and creditors are particularly interested in this financial statement because it tells them what is happening to the company’s most important resource?

events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received.

A contingency that might result in a gain usually should not be reflected in the financial statements because to do so might be to recognize revenue before its realization.

2. Yes, the company should adjust from the estimated amount to the actual amount, but not in prior periods. The adjustment will be in 2009.

f) To evaluate the material misstatement in the accounts, I think both of the consolidated income statement and the three financial statements are useful. We need to use the information properly from all the financial statements. However the consolidated income statement is the most useful one. If there is a significant change in an account balance comparing with preceding two years, the auditor will examine whether there a material misstatement exists. For instance, the bad debt expense as a percent of net sales in 2011, 2010 and 2009 are 0.56%, 0.70% and 0.69%, respectively. There should

In accordance with ASC 855-10-25-3, An entity shall not recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date but before financial statements are issued or are available to be issued. See paragraph 855-10-55-2 for examples of non-recognized subsequent events.

(b) Mark Paxson maintains that the statement of cash flows is an optional financial statement. Do you agree? Explain.

In addition to the contribution of establishing Shakespeare’s authorship, Pavier and Jaggard largely protected Shakespeare’s manuscripts and presented more authentic works of Shakespeare by referring widely to the resources they could get assessed. Their method of editing could be considered as “critical editing”, which aims to represent the author’s final intention by comparative analysis of multiple texts(Evenden, 2016, p.54-55). Most of the Folio text, according to Jowett(2007), involve a more complicated cross- fertilization, which means the Folio texts must have absorbed various copies of previous quartos and theatrical manuscript to include longer passages(p. 77). The more complicated work of the printers, the direct or indirect referring

Property Taxes – This decreased by about $140,000 when Pinnacle taxes should have increased as they acquired two more companies.

b. Trace the line item “Balance per Bank Statement” – Accuracy and Existence (AU-C 315.A114 a-iii, b-i)

A possible solution is that a liability is not recognized at all. A second alternative solution is that the liability would be initially recognized at communication date, December 31, 2005, then adjusted cumulatively over the future service period, December 31, 2005 through the termination date of January 31, 2006. A third alternative solution is that the liability is recognized on the communication date of December 31, 2005. We assume that management would prefer no recognition of a liability; however, if a liability must be recognized management would prefer the liability to be recognized on December 31, 2005, then adjusted as terminated employees sign or do not sign the waivers over the service period. Management would not want to recognize part of the liability in January because this would negatively affect their balance sheet and their current ratio during the first quarter, which could, in turn, affect the company’s ability to satisfy contracts or receive loans. In contrast, recognizing the liability at the end of the year would have little to no material impact on the company’s ratios or financials since it would be taking into account the entire year versus a few months. The auditors’ main concern will be to make certain that the liability is recognized and reported in the proper fiscal year as this liability could be quite large and materially affect financial statements.

Subsequent events are events or transactions that occur after the balance sheet date, but before the financial statements are issued or available to be issued(FASB, 2009). Auditors must evaluate subsequent events at the end of the accounting period and discuss material items with the auditing team. There are two types of subsequent events, recognized and non-recognized(FASB, 2008). Recognized subsequent events are those that provide additional evidence about the conditions that existed on the balance sheet date. This type includes events occurring up to the date of the auditor 's report. In it 's simplest form, recognized subsequent events are changes to assets or liabilities or an alteration to the estimates or summary of the financial information included in the auditors report. In other words, they require adjustments to the financial statements. An example of a recognized subsequent event is if a company resolves a legal case and the amount of liability differs from the expected amount recorded before the balance sheet date. Non-recognized subsequent events are those that provide evidence about conditions that didn 't exist on the balance sheet date, but arose after it. These events do not require adjustments to the financial statements. An example of a non-recognized subsequent event is if a company experiences a fire that destroys inventory. Although these types of events do not require adjusting of financial statements, significant non-recognized