Questions from Financial Accounting

Q: What are cash equivalents? Provide two examples. Why are these

What are cash equivalents? Provide two examples. Why are these items often combined with cash for the purpose of balance sheet presentation?

Q: What are lines of credit? From the viewpoint of a shortterm

What are lines of credit? From the viewpoint of a shortterm creditor, why do lines of credit increase a company’s liquidity? How are the unused portions of these lines presented in financial statement...

Q: Why are cash balances in excess of those needed to finance business

Why are cash balances in excess of those needed to finance business operations viewed as relatively nonproductive assets? Suggest several ways in which these excess cash balances may be utilized effec...

Q: In the following list, assume each transaction is independent of the

In the following list, assume each transaction is independent of the others. Each of these transactions occurs in a single division of Hope stat Incorporated, a multidivision company. Each transaction...

Q: Section 404 of the Sarbanes-Oxley Act (SOX) is

Section 404 of the Sarbanes-Oxley Act (SOX) is designed to nip accounting problems in the bud, before they can blossom into fraud, by focusing on internal controls. Many companies, in complying with S...

Q: A statement of stockholders’ equity sometimes is described as an “expanded

A statement of stockholders’ equity sometimes is described as an “expanded” statement of retained earnings. Why?

Q: List two items often encountered in reconciling a bank statement that may

List two items often encountered in reconciling a bank statement that may cause cash per the bank statement to be larger than the balance of cash shown in the depositor’s accounting records.

Q: Explain briefly the items generally included in a company’s annual report.

Explain briefly the items generally included in a company’s annual report. (You may use the financial statements appearing in Appendix A to support your answer.)v

Q: A portion of the stockholders’ equity section from the balance sheet of

A portion of the stockholders’ equity section from the balance sheet of Wall and Corporation appears as follows. Notice that the company has two classes of preferred stock with diffe...

Q: Some people think that a company’s retained earnings represent cash reserved for

Some people think that a company’s retained earnings represent cash reserved for the payment of dividends. Are they correct? Explain.