Reading 33: Understanding the Balance Sheet - LOS f ～ Q1-3 detailed, benefit, require, leases, about

mayanfang1

Q1. Does the Financial Accounting Standards Board require firms to disclose information about operating leases and detailed information about defined benefit pension plans in the financial statement footnotes?

          Operating lease information    Defined benefit pension plans

 

A)       No                                                     Yes

B)      Yes                                                      No

C)       Yes                                                    Yes

Q2. Which of the following is least likely a required financial statement disclosure according to the Financial Accounting Standards Board and the International Accounting Standards Board?

A)   A description of the entity including its domicile, legal form, and place of incorporation.

B)   Breakdown of operating results by significant business segments.

C)   The liquidation values of equipment used in the production of goods and services for a firm that is expected to continue to operate in the foreseeable future.

Q3. The notes to the financial statements should include which of the following disclosures?

Disclosure #1:    Revenue recognition policy when a right of return exists.

Disclosure #2:    Concentrations of credit risk for receivables with common characteristics that may affect their ultimate collection.

 

A)   Both disclosure #1 and #2.

B)   Disclosure #2 only.

C)   Disclosure #1 only.

mayanfang1

答案和详解如下：

Q1. Does the Financial Accounting Standards Board require firms to disclose information about operating leases and detailed information about defined benefit pension plans in the financial statement footnotes?

          Operating lease information    Defined benefit pension plans

 

A)       No                                                     Yes

B)      Yes                                                      No

C)       Yes                                                    Yes

Correct answer is C)

Both lessees and lessors are required to provide disclosures pertaining to operating leases in the financial statement footnotes. Detailed pension plan information must also be disclosed.

Q2. Which of the following is least likely a required financial statement disclosure according to the Financial Accounting Standards Board and the International Accounting Standards Board?

A)   A description of the entity including its domicile, legal form, and place of incorporation.

B)   Breakdown of operating results by significant business segments.

C)   The liquidation values of equipment used in the production of goods and services for a firm that is expected to continue to operate in the foreseeable future.

Correct answer is C)

Liquidation values of equipment used in the production of goods or services is not a required disclosure for firms that are expected to continue to operate. The other items must be reported in the financial statements.

Q3. The notes to the financial statements should include which of the following disclosures?

Disclosure #1:    Revenue recognition policy when a right of return exists.

Disclosure #2:    Concentrations of credit risk for receivables with common characteristics that may affect their ultimate collection.

 

A)   Both disclosure #1 and #2.

B)   Disclosure #2 only.

C)   Disclosure #1 only.

Correct answer is A)

The financial statement footnotes should disclose the specific accounting policies, including revenue recognition methods, used in preparing the financial statements. The footnotes should also disclose key estimation uncertainties that may cause material adjustments in the carrying value of assets and liabilities. One such disclosure is concentrations of credit risk.

mcdullpong

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ff1980

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Laura17

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wangyoucao

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