Questions from Financial Accounting

Q: Define long-lived assets. What are the two common categories

Define long-lived assets. What are the two common categories of long-lived assets? Describe each.

Q: After merging with Northwest Airlines, Delta Airlines increased the estimated useful

After merging with Northwest Airlines, Delta Airlines increased the estimated useful life and increased the estimated residual value of its flight equipment. All else equal, how will each of these cha...

Q: A local politician claimed, “to reduce the government’s deficit,

A local politician claimed, “to reduce the government’s deficit, it’s time we require companies to start paying their deferred income tax liabilities.” Explain to the politician what deferred income t...

Q: What is an asset impairment? How is it accounted for?

What is an asset impairment? How is it accounted for?

Q: What is book value? When equipment is sold for more than

What is book value? When equipment is sold for more than book value, how is the transaction recorded? How is it recorded when the selling price is less than book value?

Q: Distinguish between depreciation and amortization.

Distinguish between depreciation and amortization.

Q: Define goodwill. When is it appropriate to record goodwill as an

Define goodwill. When is it appropriate to record goodwill as an intangible asset? When is its value decreased?

Q: FedEx Corporation reports the cost of its aircraft in a single category

FedEx Corporation reports the cost of its aircraft in a single category called Flight Equipment. What impact would adopting IFRS have on this aspect of FedEx’s accounting?

Q: Describe the equation that provides the structure for the statement of retained

Describe the equation that provides the structure for the statement of retained earnings. Explain the four major items reported on the statement of retained earnings

Q: How is the fixed asset turnover ratio computed? Explain its meaning

How is the fixed asset turnover ratio computed? Explain its meaning.