Accounting 393w Chapter 1

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Accounting 393w chapter 2 home work
Ex 2-1 1) after reading this letter, my reaction was that it is not a professional letter, and there were many spelling mistakes, that could be easily avoided by proofreading. Moreover; there were some grammar mistakes, when the writer used the word whom few times in a wrong way. The letter is not organized correctly, and it’s very hard to follow the information that the writer is trying to provide.
2) To whom it may concern:
We received your correspondence and want to thank you. After researching your issue we believe that we found some accurate information and answers for your questions. Our firm’s goal is always to provide the most helpful and accurate service for our clients. Your issue had two possible resolutions. The first one is paying a fine of $5500, plus penalties and interest. The other possibility which is in favor for you is to receive $4400 credit from the IRS due to a loss of a carry forward to your current tax return. We base this possibility on the regulation IRC Sec.341(6)a. as your CPAs we want to insure that our work for you is in compliance with all the regulations and the standards of professional ethics in order to avoid fines penalties or even jail time.
Due to our findings in our research we are strongly advice to follow our suggests
Sincerely M. Ostley Wrongh
Wright and Wrongh, CPAs Accounting 393w chapter 3 home work
EX 3-1 1) ACCOUNTING THEORY tries to describe the role of accounting and is composed of four types of accounting theory: classical inductive theories, income theories, decision usefulness theories, and information economics / agency theories: a. Classical inductive theories are attempts to find the principles on which current accounting processes are based; b. Income theories try to identify the real profit of an organization; c. Decision usefulness theories attempt to describe accounting as a process of providing the relevant information to the relevant decision makers; and, d. The information economics / agency theories of accounting see accounting information as a good to be traded between rational agents each acting in their own self-interest.
2) The FASB’s Conceptual Framework The conceptual framework is supposed to embody “a coherent system of interrelated objectives and fundamentals that can lead to consistent standards and that prescribes the nature, function, and limits of financial accounting and financial statements.”2 The conceptual framework is an attempt to provide a met theoretical structure for financial accounting. The project now includes eight statements of financial accounting concepts, initiated by an important discussion memorandum.
The FASB's Conceptual Framework of Accounting project has not been able to generate political support because it does not provide an accounting model that takes into consideration various economic events. A detailed analysis of accounting for employee stock options (ESOs) reveals the limitations in the conceptual framework. One such limitation is the fact that there is alternative accounting frameworks for the transaction in which a company grants ESOs to its employees. Thus, the FASB's framework cannot always obtain support for standard-setting proposals.
3) Revenue is the amount earned from a company’s main activities such as selling merchandise or providing services.
A gain results from a peripheral activity, such as selling the old delivery truck. A gain is the amount received that is in excess of the asset’s carrying amount (book value). For example, if the company receives $3,000 for the truck, and its carry amount was $600, the company will report a gain of $2,400.
4) Depreciation is an adjustment to the net income of an entity for wear and tear of fixed assets. The adjustment for depreciation is (in theory) to expense assets over the term of their useful lives.
Amortization is an adjustment to the net