ACCT 1A Lecture Notes - Lecture 28: Contingent Liability, Financial Statement, Relate
14 Sep 2020
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As this is done on an after tax basis. Changes in specific accruals or general accounting policies do not directly affect cash as they do not involve cash (e. g. depreciation) but will affect ite cash paid/refunded. Financial statements don"t measure a manager"s performance without sensitive and informed interpretation and even then, not satisfactorily. It is difficult to determine how much a company"s performance is due to management and how much depends on other factors such as economic trends, product price changes, union pressure and luck. As most company"s management is a group, it"s difficult to set one manager"s performance apart from others. Care must be taken to be aware of the situation before making use of ratios in comparisons. A decision made in advance about how, when and whether to record or recognise. Typically, companies make policy choices in such areas as: 1) what accounting methods will be used. Whether to disclose details of certain operating expenses.
