Exam 4: The Balance Sheet and the Statement of Shareholders Equity

The balance sheet contains the major sections (a-k) listed below. A listing of balance sheet accounts (1-12) follows. Required: Using the letters (a-k), indicate in which section of the balance sheet each of the accounts (1-12) would be classified. Put parentheses around the letter used if it represents a contra account. If the account does not appear on the balance sheet, place an "X" in the space provided.

A reader of a set of financial statements would expect to be able to find in the statement of changes in shareholders' equity increases

The SEC requires listed companies to report changes in shareholder's equity as a separate disclosure, whereas smaller companies can report changes in a supporting schedule or as note in the financial statements.

How would a common classification of a balance sheet look?

Which of the following liabilities is properly classified as a current liability?

A list of statements follows: a.A balance sheet summarizes the ____________________ ____________________ of a company. b.GAAP defines the ____________________ of a corporate balance sheet. c.Temporary investments in marketable securities are classified as ____________________ ____________________ and investment securities available for sale. d.A company must accrue a loss and a liability from a contingency if it is ____________ that a liability has been incurred and the amount of the loss can be ______________ _______________. e.Unrealized fair value increases in available-for-sale securities is an example of ____________________ ____________________ ____________________ ____________________. f._____________ ______________ of a company include affiliated entities such as subsidiaries, trusts for the benefit of employees, its management, and its principal owners or immediate families. g.A(n) ____________________ ____________________ is one that occurs between the balance sheet date and the date the annual report is issued. Required: Fill in the words necessary to complete the statements.

The primary attribute of all assets is service

Justification for having both intangible assets and other assets listed on a balance sheet include that

Which is a component of shareholders' equity?

The balance sheet account that is usually reported at its fair market value is

A deficit occurs when a company's

In preparing a statement of changes in shareholders' equity, the company includes land given to a shareholder as a dividend. This transaction is included in the statement because it represents

A corporation's balance sheet is usually divided into three sections with various classifications reported within each group in an informative manner. Listed below are some typical classifications within a section. Required: Identify each of the three balance sheet sections and list the classifications within each section in the appropriate order.

State law may require that capital stock have which of the following values?

The residual interest in a company's assets is represented by its

Derivative financial instruments must be reported as either assets or liabilities on the balance sheet and be measured at their net realizable value.

Which statement is false?

The elements of the income statement, revenues, expenses, gains and losses are measured by changes in cash inflows and outflows.

The balance sheet contains the major sections (a-j) listed below. A listing of balance sheet accounts (1-10) follows. Required: Using the letters (a-j), indicate in which section of the balance sheet the accounts (1-10) would most likely be classified.

Obligations that are not expected to require the use of current assets or the creation of other current liabilities within one year or the normal operating cycle, if longer than a year, are called