Accelerated Earnings Inc

question 45

Essay

Accelerated Earnings Inc.(Company)has an operating line of credit with the local bank that is secured by accounts receivable and inventory.
The Company purchased inventory whenever the price was low during the year and has a substantial amount on hand at year end.The inventory price has increased substantially at year end.The Controller recorded the following journal at year end:

Required:
a)Who are the users of the Company's financial statements and what is their informational need?
b)What part of the IFRS Conceptual Framework is violated by this journal entry?
c)What is the impact of this journal entry on the Company's users?
d)What correction is required?

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Definitions:

Discrimination

The unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.

Motorcycle Accident

A collision or crash involving one or more motorcycles, often resulting in injury or damage.

Fear

An unpleasant emotional response to perceived or real imminent threat or danger.

Generalization

The process of responding similarly to different but related stimuli, often used to explain behaviors in both human and animal learning.