You just got hired as a staff accountant at a reputational company. One of your job...
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You just got hired as a staff accountant at a reputational company. One of your job duties is to prepare memos to help with decision-making, especially when it involves different accounting choices a company could have made. Recently the company is contemplating purchasing bonds as an investment, due to the downturn of stock market. The company does NOT want to hold them until maturity date; it is unsure how long it will hold these bonds. Your supervisor notices that FASB allows two other categories, ie., available-for-sale (AFS) versus trading securities (TS), to classify these bonds investment in. However, their accounting procedure and impact on financial statement seem to share some similarities and differences. Your supervisor assigns you to explore about this further. In your memo, analyze the similarities and differences between AFS and TS in the following aspects: 1. Accounting procedures during the year and at year-end 2. Financial statement presentation 3. Impact on the company's key ratio such as a. return on equity (net income/total stockholder' equity) b. return on assets (net income/total assets) T T T Arial : 3 (12pt) Words:0 II You just got hired as a staff accountant at a reputational company. One of your job duties is to prepare memos to help with decision-making, especially when it involves different accounting choices a company could have made. Recently the company is contemplating purchasing bonds as an investment, due to the downturn of stock market. The company does NOT want to hold them until maturity date; it is unsure how long it will hold these bonds. Your supervisor notices that FASB allows two other categories, ie., available-for-sale (AFS) versus trading securities (TS), to classify these bonds investment in. However, their accounting procedure and impact on financial statement seem to share some similarities and differences. Your supervisor assigns you to explore about this further. In your memo, analyze the similarities and differences between AFS and TS in the following aspects: 1. Accounting procedures during the year and at year-end 2. Financial statement presentation 3. Impact on the company's key ratio such as a. return on equity (net income/total stockholder' equity) b. return on assets (net income/total assets) T T T Arial : 3 (12pt) Words:0 II
Expert Answer:
Answer rating: 100% (QA)
Similarities and Differences between AFS and TS in differnet aspect are as follows SNo Aspects Basis Available for Sales AFS Trading Securities TS 1 A... View the full answer
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
Posted Date:
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