True or false: A company is having economic problems and substantial doubt exists as to whether the company can continue as a going concern. At a minimum,management must ensure that plans are in place to address the problems and it is probable that these plans can be implemented within the next year.TrueO False

Solution Concept When there is a substantial doubt as to whether the company can continue as going…

ze or false: A company is having economic problems and substantial doubt exists as to whether the company can continue as a going concern. At a minimun nagement must ensure that plans are in place to address the problems and it is probable that these plans can be implemented within the next year. • True False

ze or false: A company is having economic problems and substantial doubt exists as to whether the company can continue as a going concern. At a minimun nagement must ensure that plans are in place to address the problems and it is probable that these plans can be implemented within the next year. • True False

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 24MC: Most analysts believe which of the following is true about EPS? A. Consistent improvement in EPS...

See similar textbooks

Similar questions

Consider the dilemma you might someday face if you are the chief financial officer of a company that is struggling to maintain a positive cash flow, despite the fact that the company is reporting a substantial positive net income. Maybe the problem is so severe that there is often insufficient cash to pay ordinary business expenses, like utilities, salaries, and payments to suppliers. Assume that you have been asked to communicate to your board of directors about your companys year, in retrospect, as well as your vision for the companys future. Write a memo that expresses your insights about past experience and present prospects for the company. Note that the challenge of the assignment is to keep your integrity intact, while putting a positive spin on the situation, as much as is reasonably possible. How can you envision the situation turning into a success story?
A company’s management has uncovered events that indicate that substantial doubt exists that the company can pay its debts as they come due over the following year. What should management do next? a. Management should disclose that substantial doubt exists that the company can remain in existence. b. Management should examine the plans created to address the concern. c. Management should adjust all asset balances to fair value. d. Management should adjust all liabilities to expected settlement amounts.
Choose the correct. A company’s management has uncovered events that indicate that substantial doubt exists that the company can pay its debts as they come due over the following year. What should management do next?a. Management should disclose that substantial doubt exists that the company can remain in existence.b. Management should examine the plans created to address the concern.c. Management should adjust all asset balances to fair value.d. Management should adjust all liabilities to expected settlement amounts.
A company’s management believes that substantial doubt exists that the company can meet its financial obligations as they come due for a one-year period from the issuance of its financial statements. Management is studying the plans that have been developed to avoid this problem. What two decisions must management make?
Which of the following is not a reason a company would be willing to accept new business at a loss? A.) The company has the expectation that certain customers can influence other potential customers. B.) The company has the expectation that it will make up for it in later years and has the expectation that certain customers can influence other potential customers. C.) The company has the expectation that its estimates will prove incorrect and that the business will result in a profit. D.) The company has the expectation that it will make up for it in later years.
Choose the correct. A company’s management has uncovered events that indicate that substantial doubt exists that the company can pay its debts as they come due over the following year. Management studies the plans created to address this risk. How can the company avoid disclosing that this substantial doubt exists?a. The plans must be reviewed by the chief financial officer. b. It must be probable that the plans will be implemented and it must be probable that the plans will mitigate the conditions that raised substantial doubt. c. Disclosure of the substantial doubt is required regardless of the availability of the plans. d. The plans must have been tested before the end of the financial year.
Knowing how the various sections of the company are functioning will help the manager identify where the company is strong, where it is weaker, and what things the manager can improve. This should assist the manager in managing the company performance in a proactive and effective manner. The following is an extract of Adidas Consolidated Income Statement for the year ending 31 December 2020: Based on the information given, it can be seen that the company's performance decreased compared to the previous year. If the HQ decides to close one of its branches a)EXPLAIN THREE (3) reasons why the company should not make the decision solely based on the financial report produced b). Instead of focusing on the financial aspect when making a decision, EXPLAIN TWO Non-financial aspects that the HQ should consider in making their decision that could help them in maximizing their productivity and profit
Question When the FASB issues new standards, the implementation date is frequently 12 months from date of issuance, and early implementation is encouraged. Becky Hoger, controller, discusses with her financial vice president the need for early implementation of a standard that would result in a fairer presentation of the Companyâ€™s financial condition and earnings. When the financial vice president determines that early implementation of the standard will adversely affect the reported net income for the year, he discourages Hoger from implementing the standard until it is required. Required: a. What, if any, ethical issue is involved in this case? b. Is the financial vice president acting improperly or immorally? c. What does Hoger have to gain by advocacy of early implementation? d. Who might be affected by the decision against early implementation? (CMA adapted)
What does the terminal value of a business represent? Group of answer choices It is the value of a business from the present until it goes out of business. It is the value of the last year of its planned period of operations. It is the value from the end of the specific forecast period until a business is sold or otherwise terminated. It is the value of the business during its entire functional life discounted to the present. Previous
Ethics and the Manager M. K. Gallant is president of Kranbrack Corporation, a company whose stock is traded on a national exchange. In a meeting with investment analysts at the beginning of the year, Gallant had predicted that the company’s earnings would grow by 20% this year. Unfortunately, sales have been less than expected for the year, and Gallant concluded within two weeks of the end of the fiscal year that it would be impossible to report an increase in earnings as large as predicted unless some drastic action was taken. Accordingly, Gallant has ordered that wherever possible, expenditures should be postponed to the new year—including canceling or postponing orders with suppliers, delaying planned maintenance and training, and cutting back on end-of-year advertising and travel. Additionally, Gallant ordered the company’s controller to carefully scrutinize all costs that are currently classified as period costs and reclassify as many as possible as product costs that are…
Contingent situation is a potential negative event that may occur in the future, such as economic recession, natural disaster, fraudulent activity, or a terrorist attack. Contingencies can be prepared for, but often the nature and scope of such negative events are unknowable in advance. Companies and investors plan for various contingencies through analysis and implementing protective measures. Describe how accountants may help to mitigate the impact of these risks on profitability? (350 words)
James Madison was brought in as assistant to Computron’s chairman, who had the task of getting the company back into a sound financial position. Madison must prepare an analysis of where the company is now, what it must do to regain its financial health, and what actions to take. Your assignment is to help her answer the following questions, using the recent and projected financial information shown next. Provide clear explanations, not yes or no answers. Calculate the profit margin? operating profit margin? basic earning power (BEP)? return on assets (ROA)? and return on equity (ROE). What can you say about these ratios?