Indicate How Each Event Affects the Financial Statements

question 71

Essay

Indicate how each event affects the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter dollar amounts.
Increase = I Decrease = D Not Affected = NA
On December 31, Year 1, Sparkes Company estimated it had $12,000 of uncollectible accounts related to credit sales it made during the year. Sparkes, which uses the allowance method, made the necessary adjustment to record this estimate.

Learn the criteria for reportability of operating segments under the revenue, profit or loss, and asset tests.

Understand how inventory and long-term contract losses are treated in interim financial reports.

Grasp the requirements for disclosing earnings per share and other key financial items in interim reports.

Become familiar with the disclosure requirements under International Financial Reporting Standards (IFRS) for interim reporting.

---

Definitions:

Sensitive Period

A specific time in an organism's development when it is particularly receptive to certain environmental stimuli or experiences.

White-Crowned Sparrow

A species of bird, recognized by its distinctive black and white stripes on the head, commonly found in North America.

Food Preference

An individual's inclination or desire to select certain types of food over others based on taste, health, culture, or other factors.

Genetic Basis

The underlying foundation of traits and diseases in organisms, determined by genes and their interaction with the environment.