Needles/Powers 2002e Principles of Financial Accounting- Internet Research Activities

Needles Accounting Resource Center

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

Internet Research Activities
Chapter 3: Measuring Business Income

The Importance of Accrued Expenses

Instructions: Visit the five annual reports listed below, or choose others from the Annual Reports list included at this site. Find the section labeled "Current Liabilities" and identify the percentage of current liabilities that are accrued expenses (sometimes called "accrued liabilities").

Five Annual Reports:

Sample Current Liabilities Section of an Annual Report
(Click here to see the Sun Microsystems balance sheet online.)

Current Liabilities	6/30/00	%	6/30/99	%
Short-term borrowings	$7	0%	$2	0%
Accounts payable	924	19%	756	23%
Accrued payroll-related liabilities	751	16%	520	16%
Accrued liabilities and other	1,366	29%	991	31%
Deferred revenues and customer deposits	1,289	27%	576	18%
Income taxes payable	422	9%	403	12%

Total current liabilities	$4,759	100%	$3,248	100%

Extended Research Activities

1. Go to the Notes to Consolidated Financial Statements of Intimate Brands.

Describe the types of accrued expenses specified in the notes.
Did accrued expenses increase or decrease from 1999 to 2000?

2. Read the article "What Is Your Company Hiding?" (Fool.com–March 22, 2001).

Why is it important to know a company's revenue recognition policy?
Where in a company's financial statements is its revenue recognition policy discussed?
Describe the measures discussed in the article for evaluating accounts receivable.
Why should accounts receivable grow at a rate equal to or less than that of revenues?

Either print out your answers for submission or email them to your instructor.





	ACE Practice Tests

	Chapter Summaries

	Check Figures

	Company Links

	Learning Objectives

	Business Readings

	Internet Research Activities

	Toys'R'Us Annual Report Activities

	Fingraph Financial Reporting and Analysis Cases Using CPAnalyst(r)



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