Accounting 5110 - Study guides, Class notes & Summaries

Included in Cash: - ANS-coins and currency -checking accounts -savings accounts - negotiable checks - bank drafts excluded from cash - ANS- sinking funds - certificates of deposit - bank overdrafts - postdated checks - travel advances - cryptocurrencies cash equivalents - ANSShort-term, highly liquid investments that are readily convertible into known amount of cash and near their maturity (90 days) when purchased (e.g. commercial paper, T-bills, money market funds) receiv...

The acquisition cost adjusted for the amortization of discount or premium, if appropriate. - ANSAmortized cost. Securities not classified as held-to-maturity or trading securities. - ANSAvailable-for-sale Debt securities. The process of separating the host security from the embedded derivative in a hybrid security for accounting purposes. - ANSBifurcation A __ is a derivative that gives the holder the right, but not the obligation, to buy shares at a preset price. - ANSCall opt...

long-term liabilities - ANSconsist of probable future sacrifices of economic benefits arising from present obligations that are not payable within a year or the operating cycle of the company, whichever is longer. examples of long term liabilities - ANSBonds payable Notes payable Mortgages payable Deferred taxes Certain contingencies Pension liabilities Lease liabilities Reasons for Issuance of Long term liabilities - ANS1. debt financing = only available source of funds 2. debt ...

Role of financial accounting - ANSto identify, measure, and report relevant and reliable financial information about companies to present and potential future stakeholders Who are stakeholders? - ANSStakeholders are parties with an interest in a company and are impacted by companies decision. Ex; shareholders, banks, creditors, managers, customers, etc. Separation of Ownership and Control - ANSthe need to bridge the gap between the principals (investors) and agents (management) creates...

A guide to assignment on merger and financial ratios with advanced calculations performed on Excel worksheet. All calculations are correct

What does the "Time Value of Money" Indicate? - ANSA dollar received today is worth more than a dollar promised at some time in the future. What is the objective of using present value in an accounting measurement? - ANSTo capture, to the extent possible, the economic difference due to timing between sets of estimated future cash flows. What are some examples of items in accounting that need to be estimated for present value? - ANS-Long-term Liabilities -Investments -Business Co...

Companies' motivations for investing in debt or equity securities issued by other companies: - ANS1) To earn a high rate of return 2) To secure certain operating or financing arrangements with another company How to provide useful information - ANSCompanies account for investment based on the type of security (debt or equity) and their intent with respect to the investment. Debt securities - ANSFinancial securities that represent a creditor relationship with another entity. Examples a...

On December 1, 2018, Goetz Corporation leased office space for 10 years at a monthly rental of $80,000. On that date Goetz paid the landlord the following amounts: Rent deposit $ 80,000 First month's rent 80,000 Last month's rent 80,000 Installation of new walls and offices 640,000 Tota: $880,000 The entire amount of $880,000 was charged to rent expense in 2018. What amount should Goetz have charged to expense for the year ended December 31, 2018? a. $80,000 b. $85,333 c. $165,333 d....

What is meant by the phrase efficient allocation of resources? What mechanism fosters the efficient allocation of resources in the United States? - ANSResources are efficiently allocated if they are given to enterprises that will use them to provide goods and services desired by society and not to enterprises that will waste them. The capital markets are the mechanism that fosters this efficient allocation of resources. What is the primary objective of financial accounting? - ANSThe primary...