Exam 3 Review - Exam 3 Review ACCT 3366 Spring 2011 Exam...

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ACCT 3366 Exam 3 Review Spring 2011 Exam Date: Saturday, April 30, 2011 at 10:00am Exam Makeup: 14 multiple-choice problems 6 work out problems Bring 4 Function Calculator and Wooden Pencil Chapters 5 and 6 Chapter 5- Balance Sheet and Statement of Cash Flows Balance Sheet o Also referred to as the statement of financial position o Reports the assets, liabilities, and stockholder’s equity of a business enterprise at a specific date o Liquidity The amount of time that is expected to elapse until an asset is realized or otherwise converted into cash or until that liability ahs to be paid o Solvency Ability of a company to pay its debts as they mature o Financial flexibility Measure the ability of an enterprise to take affect actions to alter the amounts and timing of cash flows so it can respond to unexpected needs and opportunities o Limitations Most assets and liabilities are reported at historical cost Companies use judgment and estimates to determine of the items reported in the balance sheet Omits many items that are of financial value but that a company cannot record objectively o Classified Companies separate parts of the balance sheet and should report separately: Assets that differ in their type or expected function in the company’s central operations or other activities o Computer company reports inventory separate from Property, Plant and Equipment Assets and liabilities with different implications for the company’s financial flexibility o Company should report those assets separately from assets held for investment and assets subject to restrictions Assets and liabilities with different general liquidity characteristics o Boeing company reports cash separately from inventories Assets Liabilities and Owner’s Equity Current Assets Liabilities Item Basis of Valuation Cash and Cash Equivalents Fair Value Current Liabilities Short-term Investments Generally, Fair Value Long-term Liabilities Receivables Estimated Amount Collectable Inventories Lower of cost or market Owner’s Equity Chapter 5 1
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[Type text] [Type text] [Type text] Prepaid Expenses Cost Capital Stock Long-term Investments Additional Paid-in Capital Property, Plant, and Equipment Retained Earnings Intangible Assets Less: Treasury Stock Other Assets Current Assets Cash and other assets a company expects to convert to cash, sell, or consume either in one year or in the operating cycle, whichever is longer Presented in order of liquidity o Cash and Cash Equivalents Cash Currency Demand Deposits o Monies available on demand at a financial institution Cash Equivalents Short-term highly liquid investments that will mature within three months or less o Short-Term Investments Investments in debt and equity securities into three separate portfolios for valuation and reporting purposes Held-to-maturity o Debt securities that a company has the positive internet and ability to hold to maturity o Current or noncurrent depending on circumstance
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This note was uploaded on 09/28/2011 for the course ACCT 3366 taught by Professor Harris during the Spring '11 term at University of Houston.

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Exam 3 Review - Exam 3 Review ACCT 3366 Spring 2011 Exam...

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