Question 28 0 out of 1 points the purpose of dividing

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Question 28 0 out of 1 points The purpose of dividing assets and liabilities into current and non-current classes is to help the reader of the balance sheet to determine:Answer Selected Answer: the short-term financial position of the firm Correct Answer: both A and B Response Feedback: The terms current and short-term are used interchangeably in accounting, and so are non-current and long-term. The difference between current and non-current classes is really a question of liquidity. In arranging asset and liability items in a balance sheet, we create two classes: current and non-current. This arrangement facilitates review of the balance sheet information by interested parties and reflects a difference of liquidity, with current classes of assets and liabilities determinative of short-term financial position, and non-current classes of assets and liabilities determinative of long-term financial position. Thus, the answer is D. C is incorrect because focusing solely on the division between current and non-current classes is an insufficient indicator of future financial performance; moreover, the information presented in financial statements is historical, and past performance is not always an accurate indicator of future performance. Question 29 1 out of 1 points A $10 000 payment was made to accounts payable, as a result:Answer Selected Answer: an asset decreased and a liability decreased Correct Answer: an asset decreased and a liability decreased Response Feedback: The following entry would be made when making a $10,000 payment to accounts payable. Dr Accounts Payable 10,000 Cr Cash 10,000 As a result, an asset would decrease, specifically cash, and a liability would also decrease, specifically accounts payable b. Question 30 1 out of 1 points The holders of bonds (Interest bearing loan) maturing in 15 years’ time would be most interested in which type of information?Answer Selected Answer: long-term financial stability Correct Answer: long-term financial stability Response Feedback: A bond is a type of debt instrument whereby the issuer of a bond, the corporation in this case, borrows money from an investor(s) by issuing a bond for a defined period of time (e.g. 15 years) at a fixed interest rate. The bond states the interest rate that will be paid and when the loaned funds (bond principal) are to be returned (maturity date). Given the duration of the bond (15 years), its holders would be most interested in information concerning long-term financial stability. Bondholders want to receive interest payments for the duration of the bond (15 years) and to have their principal amount returned to them on the day the bond matures (sometime in the 15thyear). Thus, information concerning long-term financial stability would take precedence.

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