Question

Question 10 (1.5 points) Suppose you want to understand whether prepaid expenses should be classified (presented) on the balance sheet as "current assets." a. Show how you would navigate to the appropriate guidance using the "browse topics feature on the left side of the screen. (example: liabilities-contingencies-loss contingencies-initial measurement) b. Provide the numerical ASC reference for the relevant guidance that you found in (a), down to the paragraph. Question 11 (1.5 points) Navigate to the section of the Codification that describes subsequent measurement of inventory for a firm using LIFO. Type the ASC reference you believe to be most applicable, using the general format ASC X Question 12 (1.5 points) Identify the ASC reference, down to the paragraph level of detail, that provides guidance on the following: a. Which assets are generally classified on the balance sheet as "current assets."

Answer 1

Answer 10

ASC 450, Contingencies, outlines the accounting and disclosure requirements for loss and gain contingencies. An estimated loss from a loss contingency is recognized only if the available information indicates that (1) it is probable that an asset has been impaired or a liability has been incurred at the reporting date and (2) the amount of the loss can be reasonably estimated.

Answer 11

ASC 330, Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method.

Answer 12

Codification Topic 210 Balance Sheet Balance Sheet Current assets are reported separately from noncurrent assets Current liabilities are reported separately from noncurrent liabilities Current assets --> Assets that are expected to be realized --> within a year or normal operating cycle, whichever is longer Current liabilities --> Liabilities that are expected to liquidate --> within a year or normal operating cycle, whichever is longer Regulation S-X: 17 CFR Part 210 Rule 5-02: Balance sheets Current Assets 5-02.1: Cash and cash items 5-02.2: Marketable securities 5-02.3: Accounts and notes receivable 5-02.4: Allowances for doubtful accounts and notes receivable 5-02.5: Unearned income 5-02.6: Inventories 5-02.7: Prepaid expenses 5-02.8: Other current assets 5-02.9: Total current assets