Answer the following questions about IFRS: 1. What are the two main options for balance sheet presentation for companies following IFRS?. 2. Explain what is meant by the term "reverse order of liquidity." 3. What is another name for a balance sheet that may be used by corporations reporting under IFRS?

Answer the following questions about IFRS: 1. What are the two main options for balance sheet presentation for companies following IFRS?. 2. Explain what is meant by the term "reverse order of liquidity." 3. What is another name for a balance sheet that may be used by corporations reporting under IFRS?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter16: Statement Of Cash Flows

Section: Chapter Questions

Problem 15Q: Why is using the direct method to prepare the operating section of the statement of cash flows more...

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The standards, procedures, and principles companies must follow when preparing their financial statements are known as which of the following? A. Financial Accounting Standards Board (FASB) B. generally accepted accounting principles (GAAP) C. Securities and Exchange Commission (SEC) D. conceptual framework
What accounting policies are disclosed in the notes accompanying a companys financial statements? Why is this disclosure important?
Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.
Why is using the direct method to prepare the operating section of the statement of cash flows more challenging for accountants than preparing the balance sheet, income statement, and retained earnings statement?
See images below and answer these questions according to the financial information given Requirements 1. Answer the following questions for the directors: A. True or false, does the statement of cash flows explains the difference between net income and the change in the cash balance? B. True or false, investors and management use the statement of cash flows to evaluate a firm's profitability? c. True or false, the financing activities section of the statement of cash flows includes paying dividends and paying off loans? D. True or false, the financing activities section of the statement of cash flows reflects the cash flows that affect current assets and liabilities? E. True or false, buying property, plant and equipment would be considered a cash outflow from financing? F. True or false, the financing section of the statement of cash flows reflects transactions in the equity accounts and the long-term liability accounts? c. True or false, suppose Auga Company Ltd just started…
Explain whether each of the following balance sheet items increases, reduces, or has no directeffect on a company’s ability to pay its obligations as they come due. Explain your reasoning.a. Cash.b. Accounts Payable.c. Accounts Receivable.d. Capital Stock.
Which of the following is NOT a financial statement?Choose one answer.a. Income statement b. Balance sheet c. Company performance sheet d. Cash flow statement
What is the FASB’s Conceptual Framework? What are the objectives of financial reporting? What qualities make Accounting information useful? What are the most important assumptions in Accounting? What is the Financial Reporting model in the Conceptual Framework? What are the components of an Accounting System? What is the Accounting Cycle? How do we record, post and prepare Financial Statements? What is Cash Basis Accounting?
Differentiate between a balance sheet and an income statement of a listed company. How are the two statements related? Why is it often necessary to standard the items in the financial statements? Describe how this could be implemented. How does the statement of cash flows differ from the income statement? What are the various components of the cash flow statement? Describe the contribution of each of the components in terms of their importance to the generation of cash of a company? Explain what is meant by the following statement: ‘A ringgit today is worth than a ringgit to be received in future.” Describe the possible factors contributing to this situation. Describe the essential differences between the following cash flow streams: Annuity versus perpetuity Annuity due versus ordinary annuity Illustrate with an example each. What is a bond sinking fund? What is the purpose of establishing a sinking fund? Are bonds that provide for a sinking fund regarded as being risker than…
Explain what is meant by the liquidity of a company. Define two (2) common accounting measures of liquidity.
A. Undeniably, profitability is the ultimate goal of companies and readers of a company’s financial statements are very much interested in the reported profit figure. The profit figure is achieved by the preparation of the statement of profit or loss and the statement of financial position. If the foregoing is the case, why then bother about the statement of cash flows? B. Globally, accounting standards are developed based on different methods. It is generally agreed that the nature of accounting standards depends on the systems of regulation. It has been argued that there are two main systems of regulation. Required: Identify and explain the difference between the two systems of regulation, stating clearly which system you believe describes the International Financial Reporting Standards (IFRS)
Which statement is true? All of a company’s identifiable assets and liabilities appear on the balance sheet. The financial statements are linked with each other. The basic financial statements reflect a complete, accurate, portrayal of the financial performance of a company. The difference between a company’s assets and liabilities should be equal to the market value of the shares owned by investors.