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Presented below are four different transactions related to materiality. Explain whether you would classify these transactions as material. d. Sidney Inc. decided that a note payable of a very small balance should be classified as non-current on its statement of financial position, although the maturity of the note was five months after the year end. The reason given by management was that the current ratio had to be maintained at a certain level to satisfy creditors and that the note would likely be refinanced at maturity.

Presented below are four different transactions related to materiality. Explain whether you would classify these transactions as material. d. Sidney Inc. decided that a note payable of a very small balance should be classified as non-current on its statement of financial position, although the maturity of the note was five months after the year end. The reason given by management was that the current ratio had to be maintained at a certain level to satisfy creditors and that the note would likely be refinanced at maturity.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Presented below are four different transactions related to materiality. Explain whether you would classify these transactions as material. d. Sidney Inc. decided that a note payable of a very small balance should be classified as non-current on its statement of financial position, although the maturity of the note was five months after the year end. The reason given by management was that the current ratio had to be maintained at a certain level to satisfy creditors and that the note would likely be refinanced at maturity.
Transcribed Image Text:Presented below are four different transactions related to materiality. Explain whether you would classify these transactions as material. d. Sidney Inc. decided that a note payable of a very small balance should be classified as non-current on its statement of financial position, although the maturity of the note was five months after the year end. The reason given by management was that the current ratio had to be maintained at a certain level to satisfy creditors and that the note would likely be refinanced at maturity.
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