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Cash is a specific product, which is the universal equivalent of the other goods or services cost. Cash expresses value of other commodities, because cash is the thing that is exchanged for any of them. Due to this fact, heterogeneous monetary value can be compared to goods in exchange. Many economists, including Karl Marx, say that goods can be compared not only in cash value. It is human labor which makes those goods, and, therefore, the amount of expended labor can be compared to it. The value of all goods is measured by one and the same specific product, making this the last in their common measure of value, i.e. cash.
What are the advantages and disadvantages of vested rights in comparison to accumulated rights for a company and its employees? Why is this relevant in the accounting for compensated absences?
Vested right are inherent for employees as they remain with them in any case and they mean that they are not conditional, and the employee will be contributing to his/her current employer. It is relevant for the accounting of paid absence due to several reasons. In the USA, a paid leave in state institutions, and many (but not all) private companies is calculated in hours and is usually about 12-14 days a year, although the accumulation of experience of its duration is gradually increased up to 18-24 working days per year. However, due to the fact that the USA is no single labor legislation at the federal level, and labor laws vary from state to state, some companies might not provide a paid leave to their employees (especially employees who are not employed full-time), or held it back until the Christmas holidays.
When might a negative cash flow be considered positive? Provide an example and explain.
Cash flow is the movement of funds in real time. In fact, cash flow is the difference between the amount of receipts and disbursements of funds of the company for a certain period of time, as during this period of the fiscal year is taken. Negative cash flow can be considered positive, if speaking about investments. Investment is an operation, that involves acquisition of intangible and fixed assets, securities and corporate rights in exchange for property or money. Investments imply that once negative cash flow will bring profit in future perspective.
Which method do you prefer in determining net cash flow from operating activities, the direct method or the indirect method? Explain.
For determining net cash flow, I prefer method of matrix. Matrix models are widely used in forecasting and planning. The matrix model is a rectangular table, elements of which reflect the relationship of objects. It is useful for financial analysis, as it is simple and intuitive form of combining disparate but interrelated economic phenomena.
Matrix balance is the format derived from the standard form of the company’s balance. The analytical value of the matrix balance is incomparably higher than the standard balance. Unlike the latter, which is not binding sources of funding for specific items of assets, the balance of the matrix just shows that binding. This is its great analytical value.