Questions and Answers
What will happen if the current ratio of a Company falls below the bank's requirement?
The bank will demand immediate payment of the loan.
How was the Company's current ratio on December 31, 2018?
1.5:1
When were the financial statements of the Company for the year ended December 31, 2018, authorized for issue?
March 30, 2019
What category will a long-term loan fall under in the statement of financial position if a breach in agreement is rectified within the next 12 months and immediate payment is not demanded?
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What are loan covenants in a commercial loan?
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What would be the classification of a long-term loan in the statement of financial position if a breach in agreement is not rectified within the next 12 months and immediate payment is demanded?
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What is the main reason why the liability for damages cannot be recognized in the financial statements as of December 31, 2018?
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What type of event is the court’s decision on January 15, 2019, requiring the company to pay damages of P600,000?
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How should the initial recognition of the estimated liability for damages be recorded in the company's financial statements as of December 31, 2018?
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What is the significance of an adjusting event in financial reporting?
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What is the main reason SCAR Company's serious financial deterioration is mentioned in the text?
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Why does the text mention that SCAR Company has not yet filed for bankruptcy?
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Based on PAS 10, an event that happens after the reporting period but requires the financial statements to be adjusted is known as a(n) ____________.
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In the context of the text, which of the following is NOT a reason for the time lag between preparing and issuing financial statements?
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What criteria should be considered to determine if an event after the reporting period is an adjusting event or not?
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According to PAS 10, an event after the reporting period that only requires disclosure in the notes to the financial statements is referred to as a ____________ event.
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What type of event would SIMBA Company taking a 10-year loan from a bank in 2015 be classified as?
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If an event occurred after the reporting period that impacts the net profit margin of a company, but does not require adjustments to the financial statements, how is this event classified?
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