Chapter 10 Acct
Identify the correct statements about notes that are an integral part of the financial statements.
They contain important disclosures that are not contained in the financial statements themselves. They help users of the financial statements to make informed decisions and judgments.
During a particular year, if a firm acts as a guarantor of the indebtedness of another entity, the firm that is acting as the guarantor needs to disclose this information under the ground of _____.
contingencies and commitments
Securities issued by publicly traded corporation must be registered with the SEC. The basic objectives of the registration process are to provide to potential investors:
details concerning the issuer's business activities and financial position. an explanation of the use to be made of the proceeds of the security issue. a full and fair disclosure of the securities being issued.
Some of the significant policies that are frequently described in the notes to the financial statements of publicly traded companies include details concerning:
earnings per share of common stock. basis of consolidation. depreciation methods. employee benefit (pension and postretirement) plans.
Some of the significant policies that are frequently described in the notes to the financial statements of publicly traded companies include details concerning:
goodwill and acquisition-related intangibles. stock option and stock purchase plans. inventory valuation methods. income taxes.
For geographic and "lines of business" segment disclosures, the five required data items shown for each segment are:
identifiable assets depreciation and amortization expense operating profit capital expenditures sales to unaffiliated customers
When a company's financial report consists of immaterial misstatements or adjustments made in normal course of business, the company is required to simply revise the financial statements and notes that were previously filed with the Securities and Exchange Commission, and such revision is called a _____.
little r restatement
A business segment is a group of the firm's business activities that has a common denominator. The components of each business segment are identified and defined by management. Segments may reflect:
organizational structure manufacturing processes industries served
Copies of public documents filed by publicly traded corporations can be obtained either from the corporation or from the SEC, including the most recent:
prospectus proxy statement registration statement Form 10-K
Identify the scenarios that describe contingencies and commitments that need to be disclosed in the annual report.
A commitment made to another entity to take an equipment on lease for several years into the future A potential loss that can arise from a pending lawsuit
Identify the section of an annual report where the reporting entity discloses the non-GAAP financial measures and key performance indicators used to assess the entity's financial and operating results.
Management's discussion and analysis
