《财务报表分析与运用（第三版） 课后习题答案》由会员分享，可在线阅读，更多相关《财务报表分析与运用（第三版） 课后习题答案（429页珍藏版）》请在金锄头文库上搜索。
1、Chapter 1 - SolutionsOverview:Problem LengthProblem #sS1 to 23M241.S(i)Short-term lenders are concerned primarily with liquidity. Accounting standards would focus primarily on near-term cash flows and might include cash flow forecasting. Performance reporting would likely emphasize cash-based measur
2、es. (ii)Long-term equity investors are primarily concerned with the earning power of the firm. Income measurement would be the focus of standards for such users.(iii)Tax authorities are concerned with the generation of tax revenue. Accounting standards might limit the ability of firms to shift incom
3、e from one period to another and place strict controls on the recognition and timing (accrual) of both revenues and deductible expenditures. (iv)Corporate managers seek to control their reported earnings, to cast the best possible light on their stewardship. Accounting standards set by managers woul
4、d be highly flexible, with little supplementary information and footnote disclosure.2.SThe matching principle states that revenues should be matched with the expenses that generate them. As the revenues and related expenditures may be incurred in different accounting periods, accrual accounting is r
5、equired to recognize them in the same period.3.SThe going concern assumption states that the enterprise will continue operating in a normal fashion. This assumption permits financial statements to record assets and liabilities based on the cash flows that they will generate as the firm operates. If
6、this assumption were absent, all assets and liabilities would have to be evaluated on a liquidation basis. Accrual accounting could not be used, as the assumption that expenditures would produce future revenues could no longer be made.4.SPublic companies must provide current investors with detailed
7、financial statements, mandated by the FASB and the SEC. Because of SEC filing requirements, annual and quarterly financial data are publicly available to potential investors as well. Private companies may not prepare audited financial data. When audited financial statements are prepared, they will l
8、ack some disclosures (e.g., earnings per share) and certain SEC-mandated data (such as the management discussion and analysis). In addition, these statements may not be made available to potential investors.5.SAll public companies in the United States are required to issue financial statements whose
9、 form and content are determined by the FASB after much public debate. The SEC oversees this process and supplements these standards with additional disclosure requirements. As U. S. GAAP have an investor and user orientation, they require detailed disclosures. Financial statements issued by non-U.S
10、. firms follow local (in some cases, IASB) accounting standards, with less disclosure. Local standards reflect legal and political requirements and often do not have the same investor protection objective as in the United States. Foreign firms generally do not provide quarterly reports; semi-annual
11、reporting is the norm. 6.SThe FASB sets accounting standards for all audited financial statements prepared under U.S. GAAP. The SEC has jurisdiction over all public companies. Given the overlapping jurisdiction, the SEC generally relies on the FASB to set standards but supplements those standards wi
12、th additional disclosure requirements deemed necessary to inform and protect investors in public companies.7.SThe balance sheet includes only those economic events that qualify as assets and liabilities. As accounting standards define, in effect, assets and liabilities they determine which economic
13、events are accounted for and which are ignored. Events ignored (such as many contracts) are excluded from the process of preparing financial statements. The recognition rules also influence managers decisions regarding the form of contractual agreements used to acquire assets and incur liabilities,
14、thereby affecting the preparation of financial statements.8.SLiabilities represent the assets of the firm funded by trade and financial creditors. Equity represents the permanent capital of the firm, and is the residual after all liabilities have been satisfied. Thus the distinction between liabilit
15、ies and equity is the difference between prior claims and permanent capital. Misclassification will over- or understate the firms reported debt and the degree of leverage or financial risk.9.SHistorical cost is more reliable as it reflects actual past transactions. Market values are less reliable as
16、 they may require assumptions and estimates. However, general inflation and specific price changes make historical costs less useful (relevant) as time passes. Market values always have relevance as they represent the current value of the firms resources. The nature of the markets (liquidity, volatility, and transparency) affects the reliability of the values reported. 10.SContra acc
