Indicate Those Items for Which Generally Accepted Accounting Principles Require

question 118

Multiple Choice

Indicate those items for which generally accepted accounting principles require disclosure in notes accompanying the financial statements. (More than one answer may be correct.)

• A) A large lawsuit was filed against the company two days after the balance sheet date.
• B) The depreciation method in use, given that several different methods are acceptable under generally accepted accounting principles.
• C) Whether small but long-lived items-such as electric pencil sharpeners and handheld calculators-are charged to asset accounts or to expense accounts.
• D) As of year-end, the chief executive officer had been hospitalized because of chest pains.

Analyze the financial statement impacts of recording leases incorrectly.

Differentiate between capital and operating leases.

Identify criteria for classifying leases as capital leases.

Understand the implications of lease terms, including renewal options and penalties.

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Definitions:

Operating System

The software that manages all the hardware and software resources of a computer or mobile device, serving as an intermediary between applications and the hardware.

CRT Model

A model in cognitive science referring to the Cognitive Remediation Therapy, aimed at improving mental processes such as attention, memory, and executive function.

Database

A collection of records created and stored on a computer.

Records

Documents or files that are saved and stored systematically for future reference or to serve as evidence of certain activities or transactions.