EBK ACCOUNTING PRINCIPLES
13th Edition
ISBN: 9781119411017
Author: Weygandt
Publisher: WILEY
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Chapter 4, Problem 3ISTQ
To determine
Introduction: Accounting is a process under which the financial transactions are identified, recorded, analyzed, and summarized; and at the end of the year, the financial results are reported. The various financials prepared at the end of the year are the
To choose: The correct option from the given options.
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Companies that use GAAP
do not have any guidelines as to what should be reported on their balance sheet.
often offset assets against liabilities and report net assets and net liabilities on the balance sheet rather than the underlying
detailed line items.
O generally reported current assets before non-current assets on their balance sheet.
O may report all their assets on their balance sheet at fair value.
Companies that use IFRS:
a. may report all their assets on the statement of financial position at fair value.
b. are not allowed to net assets (assets − liabilities) on their statement of financial positions.
c. may report non-current assets before current assets on the statement of financial position.
d. do not have any guidelines as to what should be reported on the statement of financial position.
Which of the following statements about the process of developing a reformulated Balance Sheet is NOT correct?
O 1. Derivative financial liabilities should be classified as financial obligations
O 2. Lease interest should be classified as a financial expense
O 3. Preference shares should be classified as a financial obligation
O 4. Every asset can be clearly classified as an operating asset or financial asset. There is no judgement or uncertainty
involved
Chapter 4 Solutions
EBK ACCOUNTING PRINCIPLES
Ch. 4 - Prob. 1QCh. 4 - 2. Explain the purpose of the worksheet.
Ch. 4 - 3. What is the relationship, if any, between the...Ch. 4 - Prob. 4QCh. 4 - Prob. 5QCh. 4 - Prob. 6QCh. 4 - Prob. 7QCh. 4 - Prob. 8QCh. 4 - 9. Which of the following accounts would not...Ch. 4 - 10. Distinguish between a reversing entry and an...
Ch. 4 - Prob. 11QCh. 4 - Prob. 12QCh. 4 - Prob. 13QCh. 4 - Prob. 14QCh. 4 - Prob. 15QCh. 4 - Prob. 16QCh. 4 - Prob. 17QCh. 4 - Prob. 18QCh. 4 - Prob. 20QCh. 4 - Prob. 21QCh. 4 - BE4-1 The steps in using a worksheet are presented...Ch. 4 - Prob. 2BECh. 4 - Prob. 3BECh. 4 - Prob. 4BECh. 4 - Prob. 5BECh. 4 - Prob. 6BECh. 4 - Prob. 7BECh. 4 - BE4-8 The steps in the accounting cycle are listed...Ch. 4 - Prob. 9BECh. 4 - Prob. 10BECh. 4 - Prob. 11BECh. 4 - Prob. 12BECh. 4 - Prob. 1DIECh. 4 - Prob. 2DIECh. 4 - DO IT! 4-3 Hanson Company has an inexperienced...Ch. 4 - Prob. 4DIECh. 4 - Prob. 1ECh. 4 - E4-2 The adjusted trial balance columns of the...Ch. 4 - E4-3 Worksheet data for Savaglia Company are...Ch. 4 - E4-4 Worksheet data for Savaglia Company are...Ch. 4 - Prob. 5ECh. 4 - Prob. 6ECh. 4 - Prob. 7ECh. 4 - Prob. 8ECh. 4 - Prob. 9ECh. 4 - E4-10 Renee Davis has prepared the following list...Ch. 4 - Prob. 11ECh. 4 - Prob. 12ECh. 4 - Prob. 13ECh. 4 - Prob. 14ECh. 4 - Prob. 15ECh. 4 - Prob. 16ECh. 4 - Prob. 17ECh. 4 - Prob. 18ECh. 4 - Prob. 19ECh. 4 - P4-1A The trial balance columns of the worksheet...Ch. 4 - P4-3A The completed financial statement columns of...Ch. 4 - P4-5A Anya Clark opened Anya’s Cleaning Service on...Ch. 4 - Prob. 7EYCTCh. 4 - Prob. 1ISTQCh. 4 - Prob. 2ISTQCh. 4 - Prob. 3ISTQCh. 4 - Prob. 4ISTQCh. 4 - Prob. 1IFRECh. 4 - Prob. 2IFRECh. 4 - Prob. 3IFRECh. 4 - Prob. 4IFRE
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- 1. How to determine whether a company's assets have been overstated using only its financial statements? Provide concreate answers with examplesarrow_forwardWhich statement is incorrect regarding presentation and disclosure of financial assets? Group of answer choices FA@FVTPL are usually presented as current. The carrying amounts each category of financial assets shall be disclosed either in the statement of financial position or in the notes. FA@AC shall be presented as noncurrent. FA@FVTOCI are either current or noncurrent.arrow_forwardHow is the valuation of cuIrent assets affected if the company follows IFRS? ( OValuation is based on historical cost. OValuation is based on market adjustments. OValuation is based on LCM accounting. O Assets are expensed immediately. Aliability created for receiving cash for future services to be provided is termed O service revenue. O estimated warranty payable. Ounearned revenue. Oaccrued liability.arrow_forward
- Which of the following is not a correct classification of assets in the statement of affairs? a. Assets pledged to fully secured creditors b. Assets pledged to partially secured creditors c. Current Assets d. Free Assetsarrow_forwardDirections: Please select the appropriate answer on the statement below;B - If the statement is trueS - When the statement is false or part of the statement is false Equity is the residual interest in the company's assets after deducting all liabilitiesarrow_forwardWhich of the following is an assumption made in the preparation of the financial statements? Select one: a. The current market value is assumed to be less relevant than the original cost paid. b. Financial statements are prepared for a specific entity that is distinct from the entity's owners. c. The preparation of financial statements for a specific time period assumes that the balance sheet covers a designated period of time. d. Financial statements are prepared assuming that inflationarrow_forward
- Choose only one answer. The term refers to the classification and aggregation on the face of the financial statements such as current or noncurrent assets, current or noncurrent liabilities, equity items, revenues, cost of sales, cost of service, administrative expenses or operating expenses, as the case may be : Related Accounts Related Parties Related Assets Related Statements The assets are held in trust for the equal benefit of all creditors to preclude one from obtaining an advantage or preference over another by the expediency of attachment, execution of otherwise. *Doctrine of Pari Passu of Equality in EquityCrab Mentality EffectCram Down EffectClawback Effect Rehabilitation is not necessarily court supervised. It may be informal or extrajudicial restructuring agreement or rehabilitation plan provided that it meets the minimum requirements recognized under the FRIA. The ultimate objective is to come up with rehabilitation or restructuring…arrow_forwardIf the going concern assumption is not made in accounting, discuss the differences in the amounts shown in the financial statements for the following items. a. Land. b. Unamortized bond premium. c. Depreciation expense on equipment. d. Inventory. e. Prepaid insurance.arrow_forwardWhich statement is incorrect regarding presentation and disclosure of financial assets? a. FA@FVTOCI are either current or noncurrent. b. FA@FVTPL are usually presented as current. c. The carrying amounts each category of financial assets shall be disclosed either in the statement of financial position or in the notes. d. FA@AC shall be presented as noncurrent.arrow_forward
- Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process must be completed. B. A product or service must be provided. C. Cash must be collected. D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process.arrow_forwardWhich of the following items will not be shown in the balance sheet of ahotel? A. customer loyalty value B. accounts payable C. Intangible assets D. accrued taxesarrow_forwardWhich statement about US GAAP and IFRS accounting standards is true? O US GAAP requires that assets be divided up into current and non-current assets while IFRS does not require such division. O Both US GAAP and IFRS require that owners' equity be listed after liabilities. O US GAAP will generally list assets and liabilities in order from most liquid to least liquid while IFRS will generally do the opposite. Both US GAAP and IFRS require that non-current liabilities be listed before current liabilities.arrow_forward
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