ABA case studies
ABA · Put your knowledge to work in context.
The Accredited Business Accountant (ABA) is a credential offered by the Accreditation Council for Accountancy and Taxation (ACAT), which also markets it under the companion title Accredited Business Advisor. According to ACAT, the ABA signals to clients and employers that the holder has competencies in financial accounting, financial reporting, financial statement preparation, taxation, and managerial accounting, while abiding by high ethical standards established by the Board of Directors. The ABA case studies are 5 cases and about 2,139 words.
1Revenue Cutoff at a Subscription Software Firm
CloudPath, a SaaS company with a December 31 year-end, bills customers annually in advance and recognizes subscription revenue ratably over the 12-month term. In the last week of December, sales closed three large deals: (a) a 240,000 one-year contract signed December 28 with service starting January 1; (b) a 180,000 one-year contract signed December 20 with service starting December 20, billed in full on signing; and (c) a 120,000 one-year contract signed December 29 that bundles 12 months of hosting with a one-time 30,000 implementation service delivered in December.
486 words, about 2 min2Inventory Write-Down and the Lower of Cost or Net Realizable Value Test
Ridgeway Outfitters reports inventory at December 31 using the lower of cost or net realizable value (LCNRV) applied by product line. Three lines are flagged: Tents: cost 95,000; expected selling price 110,000; estimated selling costs $18,000.
411 words, about 2 min3Indirect-Method Cash Flow Statement: Classifying a Disposal and Working-Capital Swing
Kestrel Manufacturing provides the following for the year: Net income 420,000; depreciation 85,000. Equipment with original cost 200,000 and accumulated depreciation 130,000 was sold for $55,000 cash.
372 words, about 2 min4Book-Tax Differences and Deferred Tax on a Warranty and Installment Sale
reports pretax book income of $500,000 for the year. Two differences exist: 1.
410 words, about 2 min5Special-Order Decision with a Binding Constraint
Halcyon Components makes a single product with the following per-unit data at normal volume of 10,000 units: selling price 80; direct materials 22; direct labor 18; variable overhead 8; fixed overhead 12 (allocated, total 120,000); variable selling 5; fixed selling 3 (allocated). Normal capacity is 12,000 units; current production and sales are 10,000 units, so 2,000 units of idle capacity exist.
460 words, about 2 min