Effects of Transactions Upon Financial Measurements

question 40

Essay

Effects of transactions upon financial measurements
Five events relating to liabilities are described below:
(a)Recorded a bi-weekly payroll,including the issuance of paychecks to employees.Amounts withheld from employees' pay and payroll taxes will be forwarded to appropriate agencies in the near future.(Ignore post-retirement costs.)
(b)Made a monthly payment on a 12-month installment note payable,including interest and a partial repayment of the principal amount.
(c)Shortly before the maturity date of a six-month bank loan,made arrangements with the bank to refinance the loan on a long-term basis.
(d)Made an adjusting entry to record accrued interest payable on a 2-year bank loan (interest is paid quarterly.)
(e)Made a year-end adjusting entry to amortize a portion of the discount on long-term bonds payable.
Indicate the immediate effects of each transaction or adjusting entry upon the financial measurements in the five column headings listed below.Use the code letters,I for increase,D for decrease,and NE for no effect.

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Definitions:

Advantages

The beneficial factors or positive attributes that contribute to the success or competitiveness of something.

Accounting Standards Board

An organization responsible for establishing and improving financial accounting and reporting standards to ensure clarity, consistency, and comparability of financial statements.

International Accounting Standards Board

An independent, private-sector body that develops and approves International Financial Reporting Standards (IFRSs).

IFRS

International Financial Reporting Standards are a set of accounting rules and standards developed by the International Accounting Standards Board (IASB) that guide the preparation of financial statements globally.