Accounting Test Solutions

The third pair of columns on a 10-column work sheet prepared at the end of the period would be the

11. Investors and creditors are particularly interested in this financial statement because it tells them what is happening to the company’s most important resource?

1. For the year-end December 31, 2007, financial statements, what amount should M record as a liability?

All of these liabilities are of known amounts and must be recorded as liabilities until the point in time when they are paid. Some liabilities, however, have amounts that are not known and must be estimated.

31.  Current liabilities are amounts that must be paid within a short period of time, usually less than a year.  TRUE

2. the majority of instalment contracts is sold with recourse to unrelated financial institutions at an agreed upon rate which is below the contractual interest rate of the instalment contract

The guidance in the Distinguishing Liabilities from Equity Topic applies to any freestanding financial instrument, including one that has any of the following attributes:

(c) Identify the plan’s funding status and the asset or liability reported on the December 31, 2011 and 2012 balance sheets assuming that Flintstone Corp.

22. A/An ________ layout has the advantage of creating a relaxed, friendly shopping atmosphere encouraging shoppers to linger and increasing the number of impulse purchases.

7. Failing to pay on time and being able to claim discounts for prompt payment

1. All of the following are the general principles underlying the valuation of liabilities e xcept:

Long-term liabilities: Note Payable with total balance due in 5 years and Mortgage Loan with payments made monthly over 5 years.

* Comments relating to the adequacy of disclosures, the actual descriptions of rate reconciliation items, deferred tax assets and liabilities, uncertain tax positions, timing of reversals, or expiration of net operating losses in various jurisdictions.

16.   Quality of design refers to the degree to which goods and services achieve the intent of the designers. FALSE

When providing the distinction between the above charges the two stage process of legal characterization developed in Agnew must be applied by the English courts. The object of the first stage of the process is to ascertain the nature of the rights and obligations which the parties intended to grant each other in respect of the charged assets. Once these have been ascertained, the Court can then embark on the second stage of the process, which is one of categorization and designed to attribute the correct legal label to the package of rights and obligations. Lord Millett’s reasoning has been approved by the House of Lords in Re Spectrum in which emphasis was given to the freedom of the company to deal with the assets in the ordinary course of business rather than the two first criteria focusing on the nature of the secured assets.