Barbara is studying the annual reports of three different companies that her accounting group will use for

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Barbara is studying the annual reports of three different companies that her accounting group will use for its term project. She sees that two of the companies have made investments in the common stock of Microsoft, Inc. What bothers her is that one company has reported the investment as a current asset, while the other company has reported its investment as a long-term asset. Explain to Barbara why it is permissible, and preferable in certain circumstances, for the exact same type of asset to be reported differently.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Financial Accounting Information For Decisions

ISBN: 978-0324672701

6th Edition

Authors: Robert w Ingram, Thomas L Albright

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