Reference no: EM133492715

Case: The reading this week covers long-term assets, current liabilities, and long-term liabilities. The balance sheet demonstrates the details of the accounting equation; that is, total assets are equal to total liabilities plus total equity. In addition to current assets such as cash, receivables, and inventories, total assets also include long-term operational assets such as property, plant, and equipment. Meanwhile, total liabilities will include both current and long-term liabilities.

The videos for this discussion forum (linked in the Study Materials) walk you through the various methods of depreciation. Recall that depreciation refers to the process of cost allocation for tangible long-term assets such as property, plant, and equipment.

In Discussion Forum 5, post your response to the following discussion topic.

Select a large company that interests you.

Question 1: Describe the different methods available for recording depreciation on plant assets. Recommend the approach that you feel would be most advantageous for your selected company and explain why.

Question 2: Discuss the process for reporting contingent liabilities in the financial statements. Provide two examples of contingent liabilities that you might expect to see on your selected company's balance sheet.