Short-term investments accountants must report on the balance sheet (depending on circumstances) are: Available-for-sale securities or intangible assets. Trading securities or available-for-sale securities. Held-to-maturity investments or trading securities. Inventory or trading securities. Your company purchases a 60% share in ABC Corporation. As the accountant, how do you treat the revenue, expense, assets and liabilities of ABC Corporation? Depreciate the assets minus revenue on the balance sheet. These are ignored by the investor company. Combine the revenue, expenses, assets and liabilities with that of the investor company. Proportionately recognize in the investor company’s income statement. How would an accountant record a written promise-to-pay from a customer? It would be recorded as a Loan on the company’s financial statements. It would be noted in a footnote on the Income Statement. It would be recorded as Note receivable on the company’s financial statements. It would be recorded as an Accounts receivable on the company’s financial statements. How long can an accountant present a trademark as an intangible asset on the balance sheet? Five years For the lifetime of the business. Trademarks are renewable every ten years. Twenty years What is the order of presentation for current and noncurrent assets on the balance sheet? Current Assets, Intangible Assets, Investments, PP&E, and Other Assets. Current Assets, Investments, PP&E, Noncurrent Assets, and Intangible Assets. Current Assets, Investments, PP&E, Intangible Assets, and Other Assets. Current Assets, Investments, PP&E, Intangible Assets, and Owner's Equity. How should R & D be reported on the balance sheet? It depends on the business and its operations. It must be presented as an expense. It must be presented as an asset. It must be presented as a liability. What is the significance of the balance sheet presentation versus the income statement or statement of owner’s equity? The income statement and statement of owner’s equity provides information covering a period of time, while the balance sheet provides information about the business on a specific date. The balance sheet presents the inflow and outflow of cash into the business. The balance sheet presentation of current and noncurrent assets is based on the cash system mandated by GAAP. The balance sheet presents the ability of the business to generate a profit. Accountants handle year-end adjustments to the value of small quantities of trading securities using the cost method as follows: The trading securities would be recorded as a liquid asset with no value. The trading securities would be depreciated using the straight-line method. The accountant would record the value of the stock at the original price paid. The book value would be adjusted to fair market value and a gain or loss would be recorded as an unrealized loss or gain.

Short-term investments accountants must report on the balance sheet (depending on circumstances) are: Available-for-sale securities or intangible assets. Trading securities or available-for-sale securities. Held-to-maturity investments or trading securities. Inventory or trading securities. Your company purchases a 60% share in ABC Corporation. As the accountant, how do you treat the revenue, expense, assets and liabilities of ABC Corporation? Depreciate the assets minus revenue on the balance sheet. These are ignored by the investor company. Combine the revenue, expenses, assets and liabilities with that of the investor company. Proportionately recognize in the investor company’s income statement. How would an accountant record a written promise-to-pay from a customer? It would be recorded as a Loan on the company’s financial statements. It would be noted in a footnote on the Income Statement. It would be recorded as Note receivable on the company’s financial statements. It would be recorded as an Accounts receivable on the company’s financial statements. How long can an accountant present a trademark as an intangible asset on the balance sheet? Five years For the lifetime of the business. Trademarks are renewable every ten years. Twenty years What is the order of presentation for current and noncurrent assets on the balance sheet? Current Assets, Intangible Assets, Investments, PP&E, and Other Assets. Current Assets, Investments, PP&E, Noncurrent Assets, and Intangible Assets. Current Assets, Investments, PP&E, Intangible Assets, and Other Assets. Current Assets, Investments, PP&E, Intangible Assets, and Owner's Equity. How should R & D be reported on the balance sheet? It depends on the business and its operations. It must be presented as an expense. It must be presented as an asset. It must be presented as a liability. What is the significance of the balance sheet presentation versus the income statement or statement of owner’s equity? The income statement and statement of owner’s equity provides information covering a period of time, while the balance sheet provides information about the business on a specific date. The balance sheet presents the inflow and outflow of cash into the business. The balance sheet presentation of current and noncurrent assets is based on the cash system mandated by GAAP. The balance sheet presents the ability of the business to generate a profit. Accountants handle year-end adjustments to the value of small quantities of trading securities using the cost method as follows: The trading securities would be recorded as a liquid asset with no value. The trading securities would be depreciated using the straight-line method. The accountant would record the value of the stock at the original price paid. The book value would be adjusted to fair market value and a gain or loss would be recorded as an unrealized loss or gain.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Short-term investments accountants must report on the balance sheet (depending on circumstances) are:

Available-for-sale securities or intangible assets.

Trading securities or available-for-sale securities.

Held-to-maturity investments or trading securities.

Inventory or trading securities.

Your company purchases a 60% share in ABC Corporation. As the accountant, how do you treat the revenue, expense, assets and liabilities of ABC Corporation?

Depreciate the assets minus revenue on the balance sheet.

These are ignored by the investor company.

Combine the revenue, expenses, assets and liabilities with that of the investor company.

Proportionately recognize in the investor company’s income statement.

How would an accountant record a written promise-to-pay from a customer?

It would be recorded as a Loan on the company’s financial statements.

It would be noted in a footnote on the Income Statement.

It would be recorded as Note receivable on the company’s financial statements.

It would be recorded as an Accounts receivable on the company’s financial statements.

How long can an accountant present a trademark as an intangible asset on the balance sheet?

Five years

For the lifetime of the business.

Trademarks are renewable every ten years.

Twenty years

What is the order of presentation for current and noncurrent assets on the balance sheet?

Current Assets, Intangible Assets, Investments, PP&E, and Other Assets.

Current Assets, Investments, PP&E, Noncurrent Assets, and Intangible Assets.

Current Assets, Investments, PP&E, Intangible Assets, and Other Assets.

Current Assets, Investments, PP&E, Intangible Assets, and Owner's Equity.

How should R & D be reported on the balance sheet?

It depends on the business and its operations.

It must be presented as an expense.

It must be presented as an asset.

It must be presented as a liability.

What is the significance of the balance sheet presentation versus the income statement or statement of owner’s equity?

The income statement and statement of owner’s equity provides information covering a period of time, while the balance sheet provides information about the business on a specific date.

The balance sheet presents the inflow and outflow of cash into the business.

The balance sheet presentation of current and noncurrent assets is based on the cash system mandated by GAAP.

The balance sheet presents the ability of the business to generate a profit.

Accountants handle year-end adjustments to the value of small quantities of trading securities using the cost method as follows:

The trading securities would be recorded as a liquid asset with no value.

The trading securities would be depreciated using the straight-line method.

The accountant would record the value of the stock at the original price paid.

The book value would be adjusted to fair market value and a gain or loss would be recorded as an unrealized loss or gain.

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