Question 1

The return on assets ratio may increase when sales increase.

Accepted Answer

A) True 
 B)False

Question 2

Inventories are reported on the balance sheet as a current asset.

Accepted Answer

A) True 
 B)False

Question 3

The gross profit percentage decreases when operating expenses increase.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following would most likely increase the net profit margin ratio?

Accepted Answer

A)  An increase in the unit selling price. 
B)  A decrease in the overall sales volume. 
C) An increase in operating expenses. 
D) An increase in cost of goods solD.An increase in the unit selling price will increase net income by a greater amount proportionately relative to the increase in net sales. 
A)  An increase in the unit selling price. 
B)  A decrease in the overall sales volume. 
C) An increase in operating expenses. 
D) An increase in cost of goods solD.An increase in the unit selling price will increase net income by a greater amount proportionately relative to the increase in net sales.

Question 5

Sales by major product category is a required financial statement disclosure.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is correct?

Accepted Answer

A)  Accumulated depreciation is the amount of depreciation on the income statement. 
B)  Current liabilities are debts expected to be paid within one year. 
C) Current assets are resources of a company that might include cash and copyrights. 
D) Patents, goodwill, and deferred revenues are classified as intangible assets on the balance sheet. 
A)  Accumulated depreciation is the amount of depreciation on the income statement. 
B)  Current liabilities are debts expected to be paid within one year. 
C) Current assets are resources of a company that might include cash and copyrights. 
D) Patents, goodwill, and deferred revenues are classified as intangible assets on the balance sheet.

Question 7

Which of the following statements is false when a company sells inventory costing $900 for $1,500 cash?

Accepted Answer

A)  Current assets increase $600. 
B)  Gross profit increases $1,500. 
C) Stockholders' equity increases $600. 
D) Net sales increases $1,500. 
A)  Current assets increase $600. 
B)  Gross profit increases $1,500. 
C) Stockholders' equity increases $600. 
D) Net sales increases $1,500.

Question 8

In which of the following classifications would cash dividend payments to stockholders be reported?

Accepted Answer

A)  Operating activities. 
B)  Financing activities. 
C) Investing activities. 
D) Stockholder activities. 
A)  Operating activities. 
B)  Financing activities. 
C) Investing activities. 
D) Stockholder activities.

Question 9

Which of the following statements does not accurately describe the effect of the sale of inventory at a profit on the financial statements?

Accepted Answer

A)  Income from operations and current assets both increase. 
B)  Operating income and gross profit both increase. 
C) Net income and earnings per share both increase. 
D) Current assets do not change and stockholders' equity increases. 
A)  Income from operations and current assets both increase. 
B)  Operating income and gross profit both increase. 
C) Net income and earnings per share both increase. 
D) Current assets do not change and stockholders' equity increases.

Question 10

Which of the following are not part of disclosure notes to the financial statements?

Accepted Answer

A)  Descriptions of the significant accounting methods applied in the company's financial statements. 
B)  Additional detail of income taxes payable reported in the balance sheet. 
C) Names of executive officers and the salaries for each officer listed. 
D) Commitments under long-term supply agreements to buy inventory and equipment. 
A)  Descriptions of the significant accounting methods applied in the company's financial statements. 
B)  Additional detail of income taxes payable reported in the balance sheet. 
C) Names of executive officers and the salaries for each officer listed. 
D) Commitments under long-term supply agreements to buy inventory and equipment.

Question 11

Net sales plus cost of goods sold is reported on the income statement as income from continuing operations.

Accepted Answer

A) True 
 B)False

The return on assets ratio may increase when sales increase.

Inventories are reported on the balance sheet as a current asset.

The gross profit percentage decreases when operating expenses increase.

Which of the following would most likely increase the net profit margin ratio?

Sales by major product category is a required financial statement disclosure.

Which of the following statements is correct?

Which of the following statements is false when a company sells inventory costing $900 for $1,500 cash?

In which of the following classifications would cash dividend payments to stockholders be reported?

Which of the following statements does not accurately describe the effect of the sale of inventory at a profit on the financial statements?

Which of the following are not part of disclosure notes to the financial statements?

Net sales plus cost of goods sold is reported on the income statement as income from continuing operations.

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments, Financial Statements, and the Quality of Earnings

Reporting and Interpreting Sales Revenue, Receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bonds

Reporting and Interpreting Owners Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters

Exam 5: Communicating and Interpreting Accounting Information

The return on assets ratio may increase when sales increase.

Inventories are reported on the balance sheet as a current asset.

The gross profit percentage decreases when operating expenses increase.

Which of the following would most likely increase the net profit margin ratio?

Sales by major product category is a required financial statement disclosure.

Which of the following statements is correct?

Which of the following statements is false when a company sells inventory costing $900 for $1,500 cash?

In which of the following classifications would cash dividend payments to stockholders be reported?

Which of the following statements does not accurately describe the effect of the sale of inventory at a profit on the financial statements?

Which of the following are not part of disclosure notes to the financial statements?

Net sales plus cost of goods sold is reported on the income statement as income from continuing operations.

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments, Financial Statements, and the Quality of Earnings

Reporting and Interpreting Sales Revenue, Receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bonds

Reporting and Interpreting Owners Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters