9) Due to the pandemic, a Canadian sports clothing store reported large losses during 2020. The owner realizes that he lacks the cash to cover a $50,000 loan payment in early 2021 He may have to declare bankruptcy and close the business. Which accounting assumption or concept is most relevant to valuing business assets at year end? A) going concern assumption B) confirmatory value C) faithful representation D) materiality E) monetary unit concept

9) Due to the pandemic, a Canadian sports clothing store reported large losses during 2020. The owner realizes that he lacks the cash to cover a $50,000 loan payment in early 2021 He may have to declare bankruptcy and close the business. Which accounting assumption or concept is most relevant to valuing business assets at year end? A) going concern assumption B) confirmatory value C) faithful representation D) materiality E) monetary unit concept

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

39 - Which of the following transactions will cause a change in a company's equity ? a) Sale of a vehicle that is among the assets of the business at net book value B) Paying employees NS) lending a loan D) Selling goods on credit at cost TO) Giving the same amount of promissory note for the debt without bond
In 2018 AXA Company faced serious liquidity problems. Management decided to window dress the financial statements in a manner that improved the company's current ratios in order to hide the liquidity problem of the situation. However, in 2019 the company came out of liquidity problem and stopped window dressing practice. - which kind of qualitative characteristics of useful financial information in this case?
The Chief Financial Officer of Company X decides to purchase 1000 units of a key component for the company’s core Widget line for $1.0 million in cash. The purchase is recorded as the final entry at the close of business on the last working day of Fiscal Year 2019. As a result.... The Gross Margin declines. The Payables Turnover ratio increases. The Return on Equity increases. The Cash Flow Margin declines.
I need the answer as soon as possible
Give typing answer with explanation and conclusion
LO 1 E17.5 The Sakai Stores Corporation calculated its income before taxes and the loss on the sale of its shoe division but wants you to advise it on how to present this information to external users Determine the after-tax loss from the shoe division and show how this information would be presented on the income statement. Explain in a brief memo to the owners why this informa tion is shown this way on the income statement. Earnings before income taxes and Discontinued Operations Tax rate Loss on Discontinued Operations $700,000 20% $250,000 LO
Which of the following is FALSE regarding the financial statements?
Suppose an accountant discovers that the company holds substantial amounts of inventory that are now obsolete and worthless. Should the accountant report the truth, write off the inventory as an asset, and take a loss on obsolete inventory in earnings? Suppose the accountant also knows that the company is already in distress. Should the accountant seek ways to avoid or delay recognizing inventory losses that will cause the company to report lower earnings and thereby experience a drop in stock price and potential bankruptcy? What if the accountant knows the company is growing quickly and generating healthy profits?
3. Consider the following two events: (a) a bank loses $1 billion from an unexpected lawsuit relating to its transactions with a counterparty and (b) an insurance company loses $1 billion because of an unexpected hurricane in Texas. Suppose that you have the same investment in shares issued by both the bank and the insurance company. Which loss are you more concerned about? a) The insurance company’s loss b) The bank lossc) Both lossesd) None of the losses
What is the relationship between current liabilities and a company's operating cycle? Select one: Current liabilities can't exceed the amount incurred in one operating cycle. Liquidation of current liabilities is reasonably expected within the company's operating cycle (or one year if less). There is no relationship between the two. Current liabilities are the result of operating transactions.
The Board of Directors decides that old inventory costing €18,000 is to be written off as the inventory is no longer sellable (it has gone out of fashion). Identical inventory in the past was sold to customers for €31,000. What is the impact on the net assets of the company in monetary terms?