Financial Reporting And Analysis - Financial Reporting And Analysis Section 1
61. The following information is available for Melissa March Ltd.
| Trades receivable | $20,000 |
| Trades payable | $25,000 |
| Notes payable due in 2 years | $12,000 |
| Accrued expenses | $1,000 |
| Prepaid expenses | $1,500 |
| Deferred revenue | $1,000 |
What is the total value of the company’s current liabilities?
- Option : A
- Explanation : Current liabilities will comprise of accounts payable, accrued expenses, and deferred revenue. Therefore 25, 000 + $1, 000 + $1, 000 =27,000.
62. Deferred income arises when:
- Option : C
- Explanation : Deferred income arises when the delivery of goods and services is due and the payment has been received.
63. When making adjustments for goodwill an analyst should most likely:
- A
exclude goodwill from the balance sheet data but consider goodwill impairment on the income statement.
- B
keep goodwill on the balance sheet data but exclude goodwill impairment from the income statement.
- C
exclude goodwill from the balance sheet data and also exclude goodwill impairment from the income statement.
- Option : C
- Explanation : When making adjustments for goodwill, an analyst should exclude goodwill from the balance sheet and also exclude goodwill impairment from the income statement.
65. Which of the following is least likely to be true for long-term financial liabilities?
