4. Inventories 5. Accounts payable 6. Prepaid expense 7. Retained earnings 8. Su

Question

4. Inventories 5. Accounts payable 6. Prepaid expense 7. Retained earnings 8. Subsequent events 9. Current ratio 10.Cash equivalents Carter Appliances is preparing its annual report for the current fiseal year. The ny's controller has asked for your help in determining how best to disclose in formation about Problem 2 - the following items: I. A subsequent event 2. Inventory costing method. 3. Composition of accrued liabilities. 4. Useful lives of depreciable assets 5. Information on long-term leases. 6. Allowance for uncollectible accounts. 7. Revenue recognition policy 8. Pension plans cant Required: Indicate whether the above items should be disclosed (a) in the summary of signifi accounting policies note, (b) in a separate disclosure note, or (c) on the face of the balance sheet

Explanation / Answer

Accounting Policies:

Accounting Policies referes to the Principles and methods adopted by the management in the preparation and presentation of the financial statement by the management of the company.

All the above refers to the points where the entity shall have a Accounting Policy used in the Preparation of the Financial Statements. Therefore, Carter Appliances shall disclose the above items in the Summary of Significant Accounting Polices describing what accounting policy has been adopted by the entity in the preparation and the presentation of the Financial Statements.

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