Indicate How Each Event Affects the Elements of Financial Statements

question 69

Essay

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.Enter only one letter for each element.

-On December 31,2016,Bates Co.paid $60,000 to the Municipal Bank to pay off the face value of a discount note that Bates had issued a year before.Show the effects of the payment and recognition of 2016 interest on the note.

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Definitions:

Quasi-Endowment

Funds that are not permanently restricted under the terms of the gift but are designated by the governing board to function as an endowment, thus not easily expendable for general operations.

Liquid Assets

Assets that can be quickly and easily converted into cash without significantly affecting their value.

Financial Ratios

Quantitative measures derived from a business's financial statements, used to evaluate its performance, liquidity, and financial health.

Managerial Accounting

A branch of accounting focused on providing financial data and analysis to managers within organizations to inform decision-making.