Balance Sheet, Accounts & Valuation Questions and Answers

Balance Sheet, Accounts & Valuation Questions and Answers Balance Sheet was first created for Analyzing strengths and weaknesses in companies Current Ratio Current Assets / Current Liabilities; measure of liquidity Fair Value Amount that the security would sell for/be purchased for in a market that has willing and objective buyers and sellers Types of Long Term Assets 1. Investments 2. Plant and Equipment 3. Intangibles 4. Deferred Assets 5. Other Assets Deferred Assets caused mainly by 1. Depreciation 2. Bad debt expense Cash Current Exchange Value, Current Asset, 1 Marketable Securities Fair value, CA, 2 AR NRV, CA, 3 Inventory LCM, CA, 4 Prepaid expenses Unamortized balance at historical cost, CA, 5 Investment in stock Fair value, LTI, 1 Investment in debt instruments Unamortized cost (face plus premium/less discount), LTI, 2 Land Historical cost, PPE, 3 Building, equipment, etc. Book value, PPE, 4 Patent Unamortized Balance, Intangibles, 5 Goodwill Historical Cost (or impaired value if asset impairment has occurred), Intangibles, 6 Deferred Assets Calculated amount depending on circumstances, 7 Idle Equipment Anticipated selling price, other assets, 8 Wages Payable Amount when due, CL, 1 Accounts Payable Amount when due, CL, 2 Income Taxes Payable Amount when due, CL, 3 Notes Payable Amount when due, CL, 4 Mortgage Payable Present value of future cash flows, LTL, 5 Bond Payable Present value of future cash flows, LTL, 6 Unamortized premium Amount left to be amortized, LTL, 7 Preferred Stock Par value, E, 1 Common Stock Par value, E, 2 APIC Selling price versus par value when issued, E, 3 Treasury Stock Cost to reacquire, E, 4 Retained Earnings Net of profits, losses, and dividends over the life of the company, E, 5 Bond Sinking Fund Fair value, LTI, ? Petty Cash Fund Current Exchange Value, CA, After Cash Finished Goods LCM, CA, After Inventory Work In Process LCM, CA, After Inventory/before finished goods Natural Resource Cost Less Accumulated Depletion, Non-Current Asset