HORNGREN'S FIN.+...V.1(LL)-W/ACCESS >C<
16th Edition
ISBN: 9781323169360
Author: MILLER-NOBLES
Publisher: PEARSON C
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Textbook Question
Chapter 15, Problem 1QC
What part of the Liberty’s annual report is written by the company and could present a biased view of financial conditions and results?
- a. Balance Sheet
- b. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)
- c. Auditor’s Report
- d. Income Statement
Expert Solution & Answer
To determine
Annual Report: As per Securities and Exchange Commission requirements, all the public companies are mandated to prepare the annual report. Annual report of a company contains the following information:
- Company’s financial status
- Summary about company, its industry, its brands, and its growth policies
- States the risks of the company and its competitors
Thus, annual report provides complete information about the financial position of a company. This helps the investors to make proper decisions.
To determine: The part of annual report that provides biased view of financial conditions.
Given info: Details of annual report.
Answer to Problem 1QC
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD & A) is a part of annual report written by the company and presents a biased view of the financial conditions and the results. Hence, correct answer is option a.
Explanation of Solution
Explanation for incorrect answer:
a.
Balance sheet is a one of the financial statement. It reports the assets and liabilities of the company as on a specific date. Thus, it does not provide any information about the biased views of the financial condition of the company. Hence, it is not the correct answer.
c.
Audit report is the report issued by the public accountant. It expresses his opinion about the financial statements and their conformity with generally accepted accounting principles. Audit report does not explain about the financial condition of the company. Hence, it is not the correct answer.
d.
Income statement is a financial statement. It reports information regarding income earned and the expenses incurred by the company. It does not provide any information about the biased views of the financial condition of the company. Hence, it is not correct answer.
Explanation for correct answer:
b.
Management’s discussion and analysis of a company reported in the annual report explains the business operations and the current and expected financial performance of the company. It is provided in the interest of the investors and it is biased. Hence, it is correct answer.
Conclusion
Hence, the correct answer is option b.
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Students have asked these similar questions
Liberty Corporation reported the following financial statements:
What part of the Liberty’s annual report is written by the company and could a biased view of financial conditions and results?
a. Balance Sheet
b. Management’s Discussion and Analysis of Financial Condition and Results Operations (MD&A)
c. Auditors Report
d. Income Statement
What determines whether an event is reflected in financial statements according to accounting principledMultiple Choice
The event's significance to the company's reputationThe event's complexity and potential impact on competitorsThe event's ability to be reliably measured in monetary termsThe event's inclusion in the annual report to stockholders
Chapter 15 Solutions
HORNGREN'S FIN.+...V.1(LL)-W/ACCESS >C<
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Ch. 15 - What ate the three main ways to analyze financial...Ch. 15 - What is an annual report? Briefly describe the key...Ch. 15 - Prob. 3RQCh. 15 - What is trend analysis, and how does it differ...Ch. 15 - Prob. 5RQCh. 15 - Prob. 6RQCh. 15 - Prob. 7RQCh. 15 - Briefly describe the ratios that can be used to...Ch. 15 - Prob. 9RQCh. 15 - Briefly describe the ratios that can be used to...Ch. 15 - Briefly describe the ratios that can be used to...Ch. 15 - Prob. 12RQCh. 15 - Prob. 13RQCh. 15 - Prob. 14RQCh. 15 - Prob. 15RQCh. 15 - Prob. 15.1SECh. 15 - Performing horizontal analysis McDonald Corp....Ch. 15 - Calculating trend analysis Variline Corp. reported...Ch. 15 - Performing vertical analysis Hoosier Optical...Ch. 15 - Preparing common-size income statement Data for...Ch. 15 - Shine's Companies, a home improvement store chain,...Ch. 15 - Shine's Companies, a home improvement store chain,...Ch. 15 - Shine's Companies, a home improvement store chain,...Ch. 15 - Prob. 15.9SECh. 15 - Prob. 15.10SECh. 15 - Prob. 15.11SECh. 15 - Using ratios to reconstruct a balance sheet...Ch. 15 - Prob. 15.13SECh. 15 - Prob. 15.14SECh. 15 - Prob. 15.15ECh. 15 - Computing trend analysis Grand Oaks Realty's net...Ch. 15 - Prob. 15.17ECh. 15 - Prob. 15.18ECh. 15 - Prob. 15.19ECh. 15 - Prob. 15.20ECh. 15 - Analyzing the ability to pay liabilities Big Bend...Ch. 15 - Analyzing profitability Varsity, Inc.s comparative...Ch. 15 - Prob. 15.23ECh. 15 - Using ratios to reconstruct a balance sheet The...Ch. 15 - Prob. 15.25ECh. 15 - Computing earnings per share Falconi Academy...Ch. 15 - Prob. 15.27APCh. 15 - Prob. 15.28APCh. 15 - Prob. 15.29APCh. 15 - Prob. 15.30APCh. 15 - Using ratios to evaluate a stock investment...Ch. 15 - Prob. 15.32APCh. 15 - Preparing an income statement The following...Ch. 15 - Computing trend analysis and return on common...Ch. 15 - Prob. 15.35BPCh. 15 - Prob. 15.36BPCh. 15 - Determining the effects of business transactions...Ch. 15 - Prob. 15.38BPCh. 15 - Prob. 15.39BPCh. 15 - Prob. 15.40BPCh. 15 - Prob. 15.41CPCh. 15 - Lance Berkman is the controller of Saturn, a dance...Ch. 15 - Prob. 15.1CTEI
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