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    Accounting Transactions Based on Estimates

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    We all know that in many cases, accounting transactions are based on estimates. Present value calculations are no exception. Interest rates, term, stream of cash flows, or future values may need to be estimated for recording transactions. What impact do these estimates have on the financial statements?

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    An example that demonstrates the impact of these estimates on the financial statements is that of capital leased assets and obligations. In this situation only one estimate affects financial ...

    Solution Summary

    The solution determines what impact the estimates have on the financial statements.