Needles/Powers 2002e Financial and Managerial Accounting

Needles Accounting Resource Center

Financial & Managerial Accounting , 2002 Edition
Belverd E. Needles, Jr., DePaul University
Marian Powers, Northwestern University
Susan Crosson, Santa Fe Community College


	Internet Research Activities Chapter 9: Current Liabilities Basic Research Skills Instructions: Use the following business periodicals' web sites to search for two business articles related to bank financing, commercial paper, product warranties, airline frequent-flyer plans, or contingent liabilities. A linked web site article is summarized below as an example. Business Periodical Web Sites: CNNfn Forbes U.S. News & World Report BusinessWeek MSNBC Commerce Barron's USA Today Money Fortune Time Financial Times Sample Article: "Money Market Funds Enter the Danger Zone" (BusinessWeek–April 9, 2001) This article describes how money market funds, traditionally considered safe investments, have run into unexpected problems. By law, money market funds must invest at least 95% of their assets in top-notch short-term debt, such as commercial paper, rated P-1 by Moodys or A-1 by Standard & Poor's. But recently, with debt defaults on the rise and corporate credit ratings tumbling as the economy weakens, some commercial paper has been downgraded (such as AT&T, DaimlerChrysler AG, and France Telecom). A fund holding paper that is later downgraded can keep it. Many do, betting that the paper won't default, as some have. Funds can also buy unrated commercial paper and municipal debt, which usually yield more than rated securities. Fund managers are left to determine the quality and managers could be tempted to okay poor-quality debt to boost their yields. Extended Research Activities 1. Search each one of the business periodical web sites above to locate an article using the term liabilities. Which of the articles addressed current liabilities versus long-term liabilities? Discuss. Which of the articles addressed contingent liabilities? Describe the nature of the contingencies. 2. Read the BusinessWeek article entitled "Delta & Pine Land: This Cotton is No Puffball" What are the uncertainties hanging over Monsanto? How do these uncertainties affect the company's ability to estimate liabilities? 3. Examine the latest 10-Q filings of Philip Morris and RJR Nabisco. Read the note concerning contingencies. Has either company accrued any liability for tobacco health related claims? How would you apply the contingent liability accounting requirements to the claims discussed? Either print out your answers for submission or email them to your instructor.





	ACE Practice Tests

	Chapter Summaries

	Check Figures

	Company Links

	Accounting Transaction Tutor

	Learning Objectives

	Ready Notes

	Business Readings

	Internet Research Activities

	Toys'R'Us Annual Report Activities

	Fingraph Financial Reporting and Analysis Cases Using CPAnalyst(r)



	SMARTHINKING

	Web Links