Questions from Intermediate Accounting

Q: A quasi reorganization is sometimes employed by a firm undergoing financial difficulties

A quasi reorganization is sometimes employed by a firm undergoing financial difficulties but with favorable future prospects. What are two objectives of this procedure? Briefly describe the procedural...

Q: Identify the three common forms of business organization and the primary difference

Identify the three common forms of business organization and the primary difference between the way they are accounted for.

Q: Corporations offer the advantage of limited liability. Explain what is meant

Corporations offer the advantage of limited liability. Explain what is meant by that statement.

Q: Distinguish between publicly held and privately (or closely) held corporations

Distinguish between publicly held and privately (or closely) held corporations.

Q: The owners of a corporation are its shareholders. If a corporation

The owners of a corporation are its shareholders. If a corporation has only one class of shares, they typically are labeled common shares. Indicate the ownership rights held by common shareholders, un...

Q: What is meant by a shareholder’s preemptive right?

What is meant by a shareholder’s preemptive right?

Q: Terminology varies in the way companies differentiate among share types. But

Terminology varies in the way companies differentiate among share types. But many corporations designate shares as common or preferred. What are the two special rights usually given to preferred share...

Q: Most preferred shares are cumulative. Explain what this means.

Most preferred shares are cumulative. Explain what this means.

Q: The pension plan was amended last year, creating a prior service

The pension plan was amended last year, creating a prior service cost of $20 million. Service cost and interest cost for the year were $10 million and $4 million, respectively. At the end of the year,...

Q: The par value of shares historically indicated the real value of shares

The par value of shares historically indicated the real value of shares and all shares were issued at that price. The concept has changed with time. Describe the meaning of par value as it has evolved...