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

A balance sheet prepared according to U.S.GAAP lists liabilities starting with those that the firm will discharge soonest (the most current or closest to maturity liabilities) and ending with those that it will pay latest (the most noncurrent or distant to maturity liabilities).

IFRS defines _____ as a current exchange value, which can mean either a current entry price or a current exit price.

In IFRS, "probable" as recognition criterion for liabilities with uncertain amount and/or timing means "more likely than not"-approximately 51%.

In the recognition criteria for liabilities with uncertain amount and/or timing, "probable" is used in U.S.GAAP to refer to a threshold of likelihood-a rule of thumb used in practice is approximately _____ In IFRS, "probable" as recognition criterion for liabilities with uncertain amount and/or timing means approximately _____.

Corporate laws within many jurisdictions require that, within _____, firms distinguish between amounts received from owners and amounts generated by operations which the firm has not distributed to owners.

Conservatism emphasizes the early recognition of losses and delayed recognition of gains.

Grand Metropolitan is a consumer foods company headquartered in the United Kingdom.It has followed the common practice in the U.K.of treating expenditures on product development, quality control, and advertising as an expense each year.Grand Metropolitan has now decided to recognize the full value of its brand names as an asset on the balance sheet as of September 30, Year 6.To keep the balance sheet in balance and in accordance with U.K.practice, Grand Metropolitan will likely

Balance sheets based on U.S.GAAP and IFRS omit some items and measure others with bias, relative to measurements based on current economic conditions.

At the end of the third year of operation, Alger Corporation has total assets equal to $100,000, liabilities totaling $90,000, and contributed capital of $30,000.What is the balance in retained earnings?

Define liability.When is it recognized?

The more variable the firm's cash flows from operating activities, the more risk that the firm will not have sufficient cash to meet the required payments.Failure to meet these obligations can result in

_____ means that the information presented is reasonably free from error and bias and faithfully represents what it purports to represent.

Balance sheet relations.Colonial 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 Colonial Group uses U.S.GAAP.) 2015 2014 2013 2012 Current Assets \1 0,999320 ? ? 6,882.60 Noncurrent Assets ? 18,717.40 11,289.10 9,713.90 Total Assets ? 28,224.70 ? ? Current Liabilities ? \ ,351.30 1,494.20 1,755.20 Noncurrent Liabilities 5,721.70 ? ? 3,540.70 Shareholders' Equity 21,537.30 16,666.90 9,002.00 ? Total Liabilities and Shareholders' Equity 30,178.90 28,224.70 18,491.30 16,596.50

Which of the following is a measurement attribute used in U.S.GAAP to measure inventories whose usefulness (typically, in terms of salability) to the firm has declined below the cost of the inventories?

_____ is the basis for the practice of reporting certain assets at the lower of acquisition cost or fair value.The requirement to test assets for impairment and to record impairment charges rests on the notion that balance sheet carrying values of assets should not exceed the amount of cash that the firm expects to receive by using or selling the asset.

_____ are probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of a past event or transaction.

In the recognition criteria for liabilities with uncertain amount and/or timing, "probable" is used in U.S.GAAP to refer to a relatively high threshold of likelihood-a rule of thumb used in practice is approximately 80%.

At December 31, Year 1, Adam Corporation has 5,000 shares of par value common stock, additional paid-in capital of $25,000, total shareholders' equity of $80,000, and retained earnings of $45,000.What is the par value per share?

Firms use short-term financing for

Many firms disaggregate the initial amounts they received from shareholders for common shares into the par or nominal or stated value of the shares and the amounts received in excess of this value, called: