Current assets are those, which canbeاخترأحد الخیاراتa. Converted into cash within anaccounting yearb. Converted into cash within Omore than an operating cyclec. None of the options Od. Converted into cash within anoperating cycle or accounting yeare. Converted into cash within lessthan accounting year

Definition: Current Assets: Currents assets are assets which have the liquidity to covert in to…

Answered: Current assets

Business

Accounting

Current assets

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 17CE: Analyzing Changes in Balance Sheet Accounts Refer to the information for Peterson Inc. above....

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Analyzing Changes in Balance Sheet Accounts Refer to the information for Peterson Inc. above. Required: Indicate whether each of the changes above produces a cash increase, a cash decrease, or is a noncash activity.
In which section of the statement of cash flows would each of the following transactions be included? For each, identify the appropriate section of the statement of cash flows as operating (O), investing (I), financing (F), or none (N). (Note: some transactions might involve two sections.) A. collected accounts receivable from customers B. issued common stock for cash C. declared and paid dividends D. paid accounts payable balance E. sold a long-term asset for the same amount as purchased
In which section of the statement of cash flows would each of the following transactions be included? For each, identify the appropriate section of the statement of cash flows as operating (O), investing (I), financing (F), or none (N). (Note: some transactions might involve two sections.) A. borrowed from the bank for business loan B. declared dividends, to be paid next year C. purchased treasury stock D. purchased a two-year insurance policy E. purchased plant assets
Classification of Cash Flows The following are several items that might be disclosed on a companys statement of cash flows presented using the indirect method. a. Net income b. Depreciation expense c. Issuance of common stock d. Loss on disposal of equipment e. Purchase of a building f. Decrease in accounts payable g. Converted bonds into common stock h. Sale of long-term investment i. Payment of interest j. Increase in inventory Required: 1. Indicate whether each item should be classified as a cash flow from operating activities, cash flow from investing activities, cash flow from financing activities, or noncash investing and financing activity. 2. CONCEPTUAL CONNECTION Why is the proper classification of cash flows important?
Jarem Company showed 189,000 in prepaid rent on December 31, 20X1. On December 31, 20X2, the balance in the prepaid rent account was 226,800. Rent expense for 20X2 was 472,500. Required: 1. What amount of cash was paid for rent in 20X2? 2. CONCEPTUAL CONNECTION What adjustment in prepaid expenses is needed if the indirect method is used to prepare Jarems statement of cash flows?
What adjustment(s) should be made to reconcile net income to net cash flows from operating activities (indirect method) considering the following balances in current assets? For those boxes in which you must enter subtractive or negative numbers use a minus sign. Accounts receivable, beginning of year $23,000 Accounts receivable, end of year 29,000 Prepaid insurance, beginning of year 16,000 Prepaid insurance, end of year 13,000 Accounts Receivable $fill in the blank 1 Prepaid Insurance fill in the blank 2 Total $fill in the blank 3
1. In which section of the statement of financial position should cash that is restricted for the settlement of liabilitydue 18 months after the reporting period be presented?a. Current assetsb. Equityc. Noncurrent liabilitiesd. Noncurrent assets
All those assets which are converted into cash in the normal course of business within one year are known as [A] fixed assets [B] current assets [C] fictitious assets [D] wasting assets
Under the cash basis of accounting: a. Accounts receivable would appear on the statement of financial position. b. Revenues are recorded when they are earned. c. Depreciation of assets having an economic life of more than one year is not recognized. d. The matching principle is ignored.
The basis for classifying assets as current or noncurrent is conversion to cash within Select one: a. the operating cycle or one year, whichever is longer. b. the accounting cycle or one year, whichever is shorter. c. the accounting cycle or one year, whichever is longer. d. the operating cycle or one year, whichever is shorter.
Directions: Fill in the following table using the equation: ∆Cash = - ∆Noncash Assets + ∆Liabilities + ∆Stockholders Equity. Indicate the name of the noncash asset, liability, or equity account affected by the transaction and if change in cash is classified as operating (O), investing (I), financing (F), or noncash (NC). The first line has been completed for you as an exampleItem∆Cash = - ∆Noncash Assets + ∆Liabilities + ∆Stockholders Equity1. Prepaid office rent for cash -O = - + Prepaid Rent + + 2. Sale of land held for cash = - + + 3. Cash payment of taxes payable = - + + 4. Issue preferred stock to investors for cash = - + + 5. Purchase equipment that is financed directly by the seller = - + + 6. Paid cash dividend = - + + 7. Pay notes payable = - + + 8. Pay interest payable = - + +
Statement I: In accordance with PAS 1 par. 66D, an entity shall classify an asset as current when the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. Statement II: Cash equivalents are investments with original maturities of six months or less. * 1 point a. Only statement I is correct. b. Only statement II is correct c. Both statements are correct d. Both statements are incorrect