Questions from Financial Reporting

Q: The president of your firm, Lesky and Lesky, has little

The president of your firm, Lesky and Lesky, has little background in accounting. Today, he walked into your office and said, “A year ago we bought a piece of land for $100,000. This year, inflation h...

Q: A firm has a high current debt/net worth ratio in

A firm has a high current debt/net worth ratio in relation to prior years, competitors, and the industry. Comment on what this tentatively indicates

Q: Comment on the implications of relying on a greater proportion of short

Comment on the implications of relying on a greater proportion of short-term debt in relation to long-term debt.

Q: There is a chance that a company may be in a position

There is a chance that a company may be in a position to have large sums transferred from the pension fund to the company. Comment.

Q: Indicate why comparing firms for postretirement benefits other than pensions can be

Indicate why comparing firms for postretirement benefits other than pensions can be difficult.

Q: Speculate on why the disclosure of the concentrations of credit risk is

Speculate on why the disclosure of the concentrations of credit risk is potentially important to the users of financial reports.

Q: Comment on the significance of disclosing the off-balance-sheet

Comment on the significance of disclosing the off-balance-sheet risk of accounting loss.

Q: Comment on the significance of disclosing the fair value of financial instruments

Comment on the significance of disclosing the fair value of financial instruments.

Q: What type of times interest earned ratio would be desirable? What

What type of times interest earned ratio would be desirable? What type would not be desirable?

Q: Would you expect an auto manufacturer to finance a relatively high proportion

Would you expect an auto manufacturer to finance a relatively high proportion of its long-term funds from debt? Discuss.