Question

8 PTS: QUESTION 2: SHORT ANSWERS & CONCEPTS may be written on 1 sheet you do not need separate sheets for each letter) You do not need to re-write the questions a) What are the 2 required titles or groupings on a classified" balance sheet compared to a non-classified balance sheet? b) Would it be correct to show "dividends on the Post Closing Trial Balance? Yes or No c) The Company owes interest on a loan and has shown this payable in the current liabilities section of the Balance Sheet. The payment is due 6 months after the Balance Sheet date. Is this correct or incorrect? d) Which company is more likely to meet all of its current obligations on time; one with a Current ratio of 5 or one with a current ratio of 1.5? e) True or False: Cash Based financial statements follow GAAP. f) A company has grouped an Automobile in the Current Assets section of the Balance Sheet and placed the auto's related Accumulated Depreciation on the Income Statement. The Auto should be used approximately 4 years. Is this a correct presentation of the Auto? If not, what would you do differently Be brief

Answer 1

Bimal Date: Page No. Current Assets & Current Liabilities @ b.) No, dividends are not shown in a post closing balance sheet Yes éto correct, Interest payable is a corrent liability Company with current ratio 1.5 is more likely to meet its all currend obligations False As per GAAP accrual basis d) e) is recorded f Automobiles will be shown under Fixed Assets. and Accumulated cleppesestion coba be shown less from fixed asset on in liability side

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