Accounting Concepts-Identification. Presented Below Are a Number of Accounting Procedures and Practices

question 140

Essay

Accounting concepts-identification.
Presented below are a number of accounting procedures and practices in Ramirez Corp. For each of these items, list the assumption, principle, information characteristic, or modifying convention that is violated.
1. Because the company's income is low this year, a switch from accelerated depreciation to straight-line depreciation is made this year.
2. The president of Ramirez Corp. believes it is foolish to report financial information on a yearly basis. Instead, the president believes that financial information should be disclosed only when significant new information is available related to the company's operations.
3. Ramirez Corp. decides to establish a large loss and related liability this year because of the possibility that it may lose a pending patent infringement lawsuit. The possibility of loss is considered remote by its attorneys.
4. An officer of Ramirez Corp. purchased a new home computer for personal use with company money, charging miscellaneous expense.
5. A machine, that cost $40,000, is reported at its current market value of $45,000.

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Definitions:

Null Hypothesis

The hypothesis that there is no significant difference or effect, used as a starting point in statistical testing.

Statistical Analysis

The process of collecting, examining, interpreting, and presenting numerical data to discover underlying patterns and trends.

Starting Salaries

The initial compensation offered to employees when they commence their positions, often influenced by factors such as industry, location, and experience.

T-test

A type of inferential statistic used to determine if there is a significant difference between the means of two variables, often used when the data sets would follow a normal distribution and have a known standard deviation.