In Each of the Following Situations,identify Whether the Setting Is

question 31

Essay

In each of the following situations,identify whether the setting is primarily financial accounting or managerial accounting.
a.Abba Company purchased a new telephone system costing $132,000 for its sales division.The new phone system will be depreciated using the straight-line method over a period of five years and has an estimated salvage value of $5,000.

b.Bandex Company has had several customers who are experiencing the negative effects of the downturn in the economy.As a result,the company believes its allowance for doubtful accounts should be increased from 1% of credit sales to 1.5% of credit sales.

c.Cortez,Inc.has experienced a decline in net income over the past three years.The engineering department is considering redesigning a product to eliminate waste and inefficiency in the production process.

d.The sales manager of Decca Corporation believes one salesman is creating fictitious sales to inflate his commission.The sales manager has asked the controller for a detailed report of sales by salesman.

e.Essex,Inc.executives are meeting to analyze the company's actual results compared to budgeted amounts.

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Definitions:

Interlocking Directorates

A situation where members of the board of directors of one company also sit on the board(s) of other companies, potentially leading to conflicts of interest and decreased competition.

Conflict Theory

A theoretical framework in sociology that emphasizes the social, political, or material inequality of a social group, analyzing the conflict between competing interests.

Feminist Theories

A range of theoretical perspectives that focus on gender inequality, the roles of gender, and promoting women's rights and interests.

Americans with Disabilities Act

is a landmark civil rights law enacted in 1990 in the United States that prohibits discrimination against individuals with disabilities in all areas of public life, including jobs, schools, transportation, and all public and private places that are open to the general public.