Exam 4: Balance Sheet: Presenting and Analyzing Resources and Financing

The balance sheet amount of shareholders' equity does not, and is not intended to, provide the user of the financial reports with a measure of the market value of common equity.

Marcus Corporation, a British firm, has an adjusted trial balance that contained the following liability accounts at December 31, 2013.Bonds Payable (due in 3 years) £100,000; Accounts Payable £72,000; Notes Payable (due in 90 days) £22,500; Accrued Salaries £4,000; Income Taxes Payable £7,000. Required: Prepare the current liabilities section of the statement of financial position, using the most common IFRS sequence of accounts presentation.

Both U.S.GAAP and IFRS specify the asset measurement basis for financial reporting and _____ is the initial measurement attribute for most assets.

Generally accepted accounting principles in the United States require firms to

The word "probable"appears in the definitions of assets and liabilities and in the recognition criteria for liabilities with uncertain amount and/or timing. a.What is the meaning of probable as used in the definitions of assets and liabilities? b.How does the meaning of probable as used in the recognition criteria for liabilities with uncertain amount and/or timing differ between U.S.GAAP and IFRS?

A cereal company issues coupons that can be exchanged for boxes of cereal.It issues two million coupons that promise the retailer who redeems the coupons $1 per coupon.The probability of redemption of any one coupon is 10%. What is the amount of the liability that the company recognizes?

Long-term debt imposes financing risk because it

Which of the following terms describes the presumption that a firm will remain in operation long enough to carry out its current plans, and will, in the normal course of its operations, realize changes in the fair values of its assets either by using those assets or selling them?

Which of the following is/are true?

The balance sheet perfectly describes both resources and financing (claims on those resources).

Assume that Boxer Company can no longer satisfy the going concern assumption.If that is the case, how should each of the following be presented on Boxer's financial statements? a.Land b.Depreciation expense on production equipment c.Merchandise inventory d.Prepaid insurance

_____ is the amount that results from using an appropriate interest rate to discount one or more future cash flows to the present.It is the sum of the present values of the individual future cash inflows and outflows associated with an asset.It is not, in and of itself, a measurement attribute.Rather, it is a means of arriving at a measurement attribute.

Which of the following is/are true regarding the balance sheet?

Describe Current Replacement Cost, Net Realizable Value, Fair Value, and the Present Value of Future Net Cash Flow use in valuing assets.

Authoritative accounting guidance precludes the recognition of some resources as assets and some obligations as liabilities.

Firms that use International Financial Reporting Standards (IFRS) may, but need not list their assets from least liquid to most liquid, with the same ordering used to list liabilities.

Balance sheet relations.George Group, an investment management company, reported the following data for four recent years.Compute the missing balance sheet amounts for each of the four years.(In answering this question, assume that George Group uses U.S.GAAP.)

All of the following statements are true except:

(CMA adapted, Dec 94 #5) Several alternatives have been identified for measuring items on the statement of financial position.Which of the following alternatives may be used? $\text { Present Value\quad Current Cost \quad Net Realizable Value }$

The distinction between recognition and realization is essential to accrual accounting, hence the importance accorded to recognition criteria.Firms recognize items that qualify for inclusion in the financial statements when they enter the financial statements. In the case of value decreases, the firm