Explain to a client the significance of the income and principal categorization scheme used for fiduciary accounting purposes.
What will be an ideal response?
Often the trustee cannot distribute principal, or can do so only in limited circumstances. Many trust instruments mandate that all of the income (meaning income in the accounting, not tax, context) be distributed annually. Thus, the categorization of an income, gain, deduction, or loss item as principal or income often affects the dollar amount that the beneficiary can receive.
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Victoria runs a flower shop. She recently made some changes so that one employee answers phones and completes the order and payment process, while another creates arrangements, and a third packages and delivers floral arrangements. Previously, each employee was responsible for the order from the phone call through the delivery. Victoria has made changes to
A. feedback. B. autonomy. C. task significance. D. skill variety. E. task identity.
Noncontrolling interest share of earnings is:
a. the total earnings of unconsolidated subsidiaries. b. earnings based on the percent of holdings by parent company of unconsolidated subsidiaries. c. the total earnings of consolidated subsidiaries. d. earnings based on the percent of holdings by outside owners of consolidated subsidiaries. e. none of the answers are correct.
Which of the following organizations would be most likely to use a job-order costing system?
a. the loan department of a bank b. the check clearing department of a bank c. a manufacturer of processed cheese food d. a manufacturer of video cassette tapes
Flyer Company sells a product in a competitive marketplace. Market analysis indicates that their product would probably sell at $48 per unit. Flyer management desires a 12.5% profit margin on sales. Their current full cost per unit for the product is $44 per unit. What is the desired profit per unit?
A) $6 B) $8 C) $5 D) $4