Questions from Financial Accounting

Q: What is the distinction between a capital expenditure and a revenue expenditure

What is the distinction between a capital expenditure and a revenue expenditure?

Q: If a capital expenditure is erroneously treated as revenue expenditure, will

If a capital expenditure is erroneously treated as revenue expenditure, will the net income of the current year be overstated or understated? Will this error have any effect on the net income reported...

Q: Shoppers’ Market purchased a site on which it planned to build a

Shoppers’ Market purchased a site on which it planned to build a new store for $265,000. The site consisted of three acres of land and included an old house and two barns. County property tax records...

Q: Should depreciation continue to be recorded on a building when ample evidence

Should depreciation continue to be recorded on a building when ample evidence exists that the current market value is greater than original cost and that the rising trend of market values is continuin...

Q: Explain what is meant by an accelerated depreciation method. Are accelerated

Explain what is meant by an accelerated depreciation method. Are accelerated methods more widely used in financial statements or in income tax returns? Explain.

Q: Assume you are the manager of the finished goods warehouse of a

Assume you are the manager of the finished goods warehouse of a stereo manufacturer. What costs are being incurred as stereos are stored while awaiting shipment to retail stores?

Q: One accelerated depreciation method is called fixed percentage-of-declining

One accelerated depreciation method is called fixed percentage-of-declining-balance. Explain what is meant by the terms fixed-percentage and declining-balance. For what purpose is this method most wid...

Q: Evaluate the following quotation: “We shall have no difficulty in

Evaluate the following quotation: “We shall have no difficulty in paying for new plant assets needed during the coming year because our estimated outlays for new equipment amount to only $80,000, and...

Q: Dorsal Ranch raises fish for sale in the restaurant industry. The

Dorsal Ranch raises fish for sale in the restaurant industry. The company can obtain batches of two million eggs from its supplier. Management is trying to decide whether to raise cod or salmon. Cod e...

Q: Explain two approaches to computing depreciation for fractional period in the year

Explain two approaches to computing depreciation for fractional period in the year in which an asset is purchased.(Neither of your approaches should require the computation of depreciation to the near...