Financial Accounting (ACCT2200)

Bank Reconciliation Statements (With answers) A. Purpose of a bank reconciliation It should be prepared regularly as part of the internal control system of the business to check: a) the accuracy of the cash book b) the accuracy of the bank statement c) that undue delay is not occurring between payments, receipts and their clearance by the bank d) to discover payments made and items received by the bank not entered in the cash book B. Reasons for differences in bank statement and cash boo...

For a 5-year period, a stock had annual returns of 6.4 percent,... For a 5-year period, a stock had annual returns of 6.4 percent, -11.2 percent, 0.3 percent, 19.8 percent, and 13.4 percent. What is the arithmetic average return? Group of answer choices

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Nature and reporting of current liabilities ƒ Understand the nature and reporting requirements of contingencies ƒ Illustrate the trade-off between reliability and relevance in accounting for contingencies

Extend our understanding of valuation methods beyond simple present value calculations. „ Understand the terminology of long-term debt „ Bonds – coupon and zero-coupon bonds „ At Par vs. Discount vs. Premium „ Market interest rate versus coupon rate „ Mortgages – Interest plus Principal paid each period „ Practice bookkeeping for debt issuance, interest accruals, periodic payments, and debt retirement. „ Understand how long-term debt affects financial statements over ti...

Obligations that must be discharged in a short period of time (generally less than one year) „ Reported on balance sheet at nominal value examples: ƒ Accounts payable ƒ Short-term borrowings ƒ Current portion of long-term debt ƒ Deposits ƒ Warranties ƒ Deferred Revenues / Income

Understand the rationale for leasing and the distinction between operating and capital leases. „ Understand the Income Statement and Balance Sheet differences between operating and capital leases from the lessee’s perspective.

Understand when accounting departs from the “transactions- based” model and towards market-driven valuations

Tax Depreciation „ Accelerated depreciation „ No judgment in determining depreciation expense „ Tax Reporting ≠ Financial Reporting ==> timing differences in measurement of income „ Why would a firm prefer accelerated depreciation for tax purposes? „ Why does government allow this? „ Why not use the tax method for financial reporting? „ Different depreciation for tax and financial reporting gives rise to Deferred Taxes