homework2 PART C

TOPIC D - posted Saturday

(1) Check out this format of the Balance Sheet using international accounting standards. What differences in classifications, from US rules, do you notice? Looks like non-current assets are listed first. Why do you think that is?

(2) One of the best solvency ratio is "times-interest-earned". Calculate the ratio and interpret the results in these income statements.

(3) Why do you think accounts receivable can be sold to a third party (called factoring)? What is management trying to do when they sell the receivables at the time of sale? Can cash discounts speed-up the cash conversion cycle? How so?

TOPIC C - posted Thursday

Journal entries are the way that accountants record business transactions. Using the debit/credit rules, prepare journal entries for these transactions: