Answer:
Accrual basis accounting.
Explanation:
Financial statements can be defined as a document used for the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors. These includes balance sheet, statement of retained earnings and income statement.
The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is accrual basis accounting.
Answer:
The answer is that both should be classified as current asset.
Explanation:
The asset and the liability will be classified as current assets on the firm's balance sheet.
Current assets are assets that can be converted to cash or be sold within a year. Examples are cash and cash equivalents, accounts receivable, inventory etc.
- The 270-day commercial paper is a cash-equivalent item. The maturity is 270 days which is less than 360 days(a year). This will be converted to cash in 270 days.
- The liability here is held for trading purposes and the position is short, meaning the firm has the intention of selling the security(common stock) within a year.
Answer:
All of these.
Explanation:
The formula to compute the return on investment is as follows:
Return on investment = Net operating income ÷ Average operating assets
Here the return on investment means it calculates the manager performance that motivates them to rise the net operating income via cost efficiency also at the same time the average operating assets could be maintained at the normal level so that the operational efficiency could be accomplished
Therefore the last option is correct