According to the textbook, the definition of asset is "asset are resources that are controlled by a business from which the economic benefits are expected to flow to the business.", the definition of liabilities are "they represents negative future cash flow for the enterprise."But asset included liabilities, isn' t that contradict the definition of asset?

Q: When the profitability of total capital (total assets) is positive, which proposal does it agree…

A: The question is asking which statement is most likely to be true when the profitability of total…

Q: ord increases and decreases in the fair value of an investment when accountants do not record…

A: In the case of property, plant and equipment, it has always been seen that they are maintained in…

Q: It is possible for a company to "maximize profits" and also not be profitable. * True False.

A: Allocate resources to develop new products or improve existing ones. This investment might not…

Q: Which of the following is true of accounting for research and development cost?     Responses…

A: The term "GAAP" (generally accepted accounting principles) refers to the generally recognised…

Q: FASB allows debt to be shown at its fair market value. Consequently, if a company in financial…

A: Financial Accounting Standards Board (FASB) The FASB, located in Norwalk, Connecticut, is an…

Q: A company's market value is generally less than its book value. True of Falses ?

A: Fixed Assets are the Non-current portion of the assets that disclosed in the assets section of the…

Q: Why is profit maximization seen as an inadequate description of the primary goal that most…

A: The concept of profit maximization, while fundamental to business operations, is often criticized as…

Q: Earnings and profits are conceptually similar to retained earnings.     A distribution from…

A: The dividend can be paid either from current earnings and profits or from the accumulated earnings…

Q: Firm's that choose to hold more current assets are in general is more ILLIQUID that firms that do…

A: Current assets are resources of value that the company expects to utilize or transform in 1 year to…

Q: Why Do Capital Expenditures Increase An Organization's Assets ,While Other Expenditures, Like Paying…

A: capital expenditure

Q: Which of the following is NOT one of the benefits of leasing an asset from another company: -

A: The leasing is one of the method through which any asset is received by a person or a company…

Q: Explain whether the following statement is true or false: Only weak companies issuedebentures.

A: A long-term liability that is issued by a company with a fixed interest rate to raise the fund for…

Q: Securitization has its upside (primarily liquidity and diversification), but it has its downside as…

A: Securitization is a complex financial process where assets are bundled together and transformed into…

Q: Which of the following explains why relative valuation is preferred over intrinsic valuation?  a.…

A: Stock valuation: It is the process of analyzing the prices of stock before investing in it. The…

Q: Companies are not required to, but have the option to, value some or all of their financial assets…

A: IFRS 9, deals with Financial Instruments. It provides for measurement and classification of various…

Q: Explain what the companies should do with their profits, conditional to the availability or absence…

A: Profit is the remaining sales after the company has recorded all expenses and is also called income.…

Q: For the example below, list and describe the input(s) (observable or unobservable) and valuation…

A: Level 1 - Quoted Prices in Active Markets: It includes inputs that are based on quoted prices in the…

Q: What is cost of financial distress to the firm without going bankrupt?Give two examples.

A: The financial distress costs are all such cost incurred by company due to the probability that it…

Q: How do you define working capital? What may happen if an organization neglected to manage its…

A: Working capital:Working capital refers to the financial resources that a company has readily…

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is