Questions from General Accounting

Q: Tinseltown Construction just received a $2 billion contract to construct a

Tinseltown Construction just received a $2 billion contract to construct a modern football stadium in the City of Industry, located in southern California, for a new National Football League (NFL) tea...

Q: Explain how a company might use the accounting rules for impairment of

Explain how a company might use the accounting rules for impairment of long-lived assets to manage earnings.

Q: The SEC’s new rules on posting financial information on social media sites

The SEC’s new rules on posting financial information on social media sites such as Twitter means that companies can now tweet their earnings in 140 characters or less. What are the problems that may a...

Q: Do you agree with each of the following statements? Explain.

Do you agree with each of the following statements? Explain. • EBITDA makes companies with asset-heavy balance sheets look healthier than they may actually be. • EBITDA portrays a company’s debt servi...

Q: Critics of IFRS argue that the more principles-based standards are

Critics of IFRS argue that the more principles-based standards are not as precise as, and therefore easier to manipulate than, the more rules-based GAAP. The reason for this is that IFRS requires more...

Q: In the Enron case, the company eventually turned to “back

In the Enron case, the company eventually turned to “back-door” guaranteeing of the debt of Chewco, one of its SPEs, to satisfy equity investors. Assume that a $16 million loan agreement required that...

Q: Are the use of non-GAAP financial measures ethical?

Are the use of non-GAAP financial measures ethical?

Q: How should an accounting professional go about determining whether a proposed action

How should an accounting professional go about determining whether a proposed action is in the public interest?

Q: In the study of earnings quality by Dichev et al., CFOs

In the study of earnings quality by Dichev et al., CFOs stated that “current earnings are considered to be high quality if they serve as a good guide to the long-run profits of the firm.” Discuss how...

Q: The auditor of Beastie Company is reviewing the following client information for

The auditor of Beastie Company is reviewing the following client information for the prior year ended December 31, 2015, and all four quarters of 2016. Estimated Accruals in pretax earnings (in millio...