Describe the accrual accounting rate-of-return method. What are its main strengths and weaknesses?

Q: Distinguish the nominal rate of return from the real rate of return.

A:

Q: Which of the following method is not based on concept of time value of money? A. Discounted payback…

A: Time value of money is based on the concept, that money you have today worth more than it in the…

Q: Does the accounting (book) rate of return (ARR) method provide a valid (or, meaningful) measureof…

A:

Q: Consider the advantages and disadvantages of using the accounting rate of return as an investing…

A: This question explains about  the advantages and disadvantages of using the accounting rate of…

Q: will bills  payable given to creditors affect the current ratio?

A: Current ratio is the ratio of Current Assets to Current Liabilities.  Current ratio = Current…

Q: Calculate the accounting rate of return of the new sign. Accounting rate of return %

A: Accounting Rate of Return The accounting rate of return (ARR) formula is helpful in determining the…

Q: a. what is the difference between the discount rate used for net present value and the internal rate…

A: Discount rate used for net present value is rate which investor want to earn from a project . It is…

Q: Discuss the accounting problems associated with interest capitalization.

A: Interest capitalization: Capitalization interest is the cost of funds that are used to finance for…

Q: Which balance sheet might be most useful to an investor? a. U.S. GAAP balance sheet b. IFRS GAAP…

A: IFRS is principal based.

Q: BRIEFLY A

A: fiscal policy, measures employed by governments to stabilize the economy, specifically by…

Q: r to pay un

A: Horizontal analysis :  Financial analysts use horizontal analysis, also known as trend analysis or…

Q: a) What is the purpose of internal earnings targets? (b) What is the risk associated with internal…

A: ‘’Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What does the accrual-accounting model measures?

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: excess earnings method, capitalized earnings approach, and discounted future earnings approach which…

A: ADJUSTED NET ASSETS METHODThe difference between the fair market value of the business assets and…

Q: What are the major advantages of notes to the financialstatements? What types of items are usually…

A: Notes to financial statements can be the information which is left out from the balance sheet and…

Q: What are some forms of off-balance-sheet financing?

A: Balance Sheet: Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of…

Q: Why is the accrual basis of accounting generally preferred over the cash basis?

A: Accrual accounting aims to record the impacts of accounting events in the period when such events…

Q: Describe the accounting when there is a right of return.

A: The right of return entitles a customer to a full or partial refund of the amount paid or a credit…

Q: Explain and evaluate the effects of capitalizing versus expensing costs in the period in which they…

A: Capitalization : When a company incurs any expense, benefit of which will be available for more than…

Q: explain mean reversion in earnings and how the accruals component of earnings aff ects thespeed of…

A: Earnings mean reversion means earnings of the company come to a normal level if the earnings for…

Q: The internal rate of return method provides a rate of return that approximates:   Both the…

A: The internal rate of return shows the estimated rate of growth in a year from the particular…

Q: Which types of investments are valued at amortized cost? Explain the rationale for this accounting.

A:

Q: In methods of estimating doubtful accounts, how does income statements approaches differ from…

A: Income Statement Approach: under this approach, the estimated amount of bad debts expense is…

Q: Establish a compensatory equilibrium. In financial statements, how are compensating balances…

A: Here is the Answer

Q: What is accrual vs cash basis accounting. Explain with examples?

A: Under accrual basis of accounting, transactions are recorded & recognized as and when they…

Q: Explain the difference between the financial statement approach and the valuation approach. Which…

A: Financial statement approach: Under this approach, the company prepares an income statement, cash…

Q: What is the accounting rate of return?

A:

Q: Explain an example how to calculate accounting rate of return.

A: The accounting rate of return (ARR) is the percentage rate of return expected on investment or asset…

Q: Describe the rules of accounting rate of return.

A: The accounting rate of return (ARR) is the percentage rate of return expected on investment or asset…

Q: What is accural vs cash basis accounting. Explain with examples?

A: Cash Accounting: A form of accounting in which receipts are reported during the period in which they…

Q: How does accounting rate of return (ARR) differ from the internal rate ofreturn (IRR)?

A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…

Q: What is the difference between a cash basis and an accrual basis measure of performance?

A: Cash Basis :- It is an Accounting Method where Revenue and Expense are identify at the time of…

Q: What is the relationship between the accountingequation and the balance sheet?

A: Accounting is the detailed process of maintaining books of accounts. It includes several steps like…

Q: What is the internal rate of return? How is it used? How does it relate to the concept of compound…

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: Briefly explain the "accrual basis assumption" and why financial statements are prepared under this…

A: As per our protocol we provide solution to the one question only but as you have asked multiple…

Q: What is Pro forma (or projected) profit-and-loss statement?

A: Pro Forma financial  Statement (also called as pro forma profit and loss) means that however the…

Q: Describe how volatile the payout ratios are based on earnings and cash flows.

A: Dividends payout ratio can be defined as the paying out the dividends to its shareholders on the…

Q: Define exposure, differentiating between accounting and economic exposure. What role does inflation…

A: Exposure means uncontrollable future events which can affect adversely. In the mechanism of exchange…

Q: Differences between Accrued Interest and Payments?

A: Answer: An accrued interest is nothing but interest on a loan or an interest on bond that has been…

Q: Are debtors calculated at selling price or finished goods price? and why?

A: The word debtor comes from the word debt which means a company or an individual having a debt…

Q: What is the basic accounting problem created by the monetary unit assumption when there is…

A: The basic accounting problem created by the monetary unit assumption when there is significant…

Q: what are the examples of Items that can  be adjusted directly against equity rather than including…

A: Profit or loss account is a revenue account, whereas the equity account is a capital account. Equity…

Q: Define accrual basis accounting and contrast it with cashbasis accounting.

A: Definition of Accrual basis of Accounting  Accrual accounting means revenue and expenses are…

Flow of Funds

The flow of funds is the financial accounts of the nation, which monitor and control the cash flow among various sectors or industries, or markets. Central banks use these flow of funds statements to acquire macroeconomic data, to publish cash inflow and cash outflow statements of the nation. This flow of funds system is utilized to identify economic activity and changes in the economy. It is used by Federal Reserve to determine the Gross Domestic Product (GDP) of the nation and to implement monetary policy and fiscal policies.