Exam 6: Additional Aspects of Financial Reporting and Financial Analysis
Exam 1: The Environment of Financial Reporting41 Questions
Exam 2: Financial Reporting: Its Conceptual Framework87 Questions
Exam 3: Review of a Companys Accounting System87 Questions
Exam 4: The Balance Sheet and the Statement of Changes in Stockholders Equity78 Questions
Exam 5: The Income Statement and the Statement of Cash Flows104 Questions
Exam 6: Additional Aspects of Financial Reporting and Financial Analysis95 Questions
Exam 7: Cash and Receivables99 Questions
Exam 8: Inventories: Cost Measurement and Flow Assumptions89 Questions
Exam 9: Inventories: Special Valuation Issues109 Questions
Exam 10: Property, Plant, and Equipment: Acquisition and Disposal88 Questions
Exam 11: Depreciation and Depletion103 Questions
Exam 12: Intangibles84 Questions
Exam 13: Current Liabilities and Contingencies99 Questions
Exam 14: Long-Term Liabilities and Receivables140 Questions
Exam 15: Investments101 Questions
Exam 16: Contributed Capital121 Questions
Exam 18: Income Recognition and Measurement of Net Assets71 Questions
Exam 19: Accounting for Income Taxes74 Questions
Exam 20: Accounting for Postemployment Benefits68 Questions
Exam 21: Accounting for Leases114 Questions
Exam 22: The Statement of Cash Flows62 Questions
Exam 23: Accounting for Changes and Errors86 Questions
Exam 24: Time Value of Money Module72 Questions
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Based upon the following information, which company has the best collection policy? Company A 30.4 days Company B 29.8 days Company C 12.2 times
Free
(Multiple Choice)
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Correct Answer:
B
Interim summarized financial information for publicly traded companies must contain certain data.Which of the following data does not have to be disclosed?
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(Multiple Choice)
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Correct Answer:
C
In the Management Report contained in the audited annual report, management acknowledges its responsibility for all of the following except
(Multiple Choice)
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An inventory loss from market value declines of $200, 000 occurred in August 2010.Marco Sales Company recorded this loss in August after its March 31 and June 30 interim reports were issued.None of this loss was recovered by the end of the year.How should this loss be reflected in Marco's quarterly income statements?
3/31 6/30 9/30 12/31 I. - - \ 200,000 - II. - - 100,000 \ 100,000 III. \ 50,000 \ 50,000 50,000 50,000 IV. -- -- -- 200,000
(Multiple Choice)
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For operating segments, which one of the following is not included in the determination of whether a segment is reportable?
(Multiple Choice)
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Listed below are a number of ratios, followed by a series of descriptive statements.
a. Acichtest ratio f. Price/earnings ratio b. Current ratio g. Profit margin c. Debt ratio h. Receivables tumover d. Dividend yield i. Return on total assets e. Equity ratio j. Times interest earned
Required:
Match the ratios to their respective descriptive statements by placing the appropriate letter in the space provided.

(Essay)
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Exhibit 6-2 Given the following information for the Green Company:
Net sales (all on account) \ 5,200,000 Interest expense 240,000 Income tax expense 280,000 Net income 420,000 Income tax rate 40\% Total assets: January 1,2010 \ 1,800,000 December 31,2010 2,400,000 Stockholders' equity: January 1,2010 1,500,000 December 31,2010 1,600,000 Current assets, December 31,2010 700,000 Quick assets, December 31,2010 400,000 Current liabilities, December 31, 2010 300,000 Net accounts receivable: January 1,2010 200,000 December 31,2010 180,000
- Refer to Exhibit 6-2.Green's return on stockholders' equity for 2010 was
(Multiple Choice)
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The "scope" paragraph of an unqualified audit opinion states that the auditor
(Multiple Choice)
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A difference between the segment disclosures required by IFRS and GAAP is that
(Multiple Choice)
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Which of the following statements is not true concerning interim financial reporting and inventories?
(Multiple Choice)
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Exhibit 6-1 Morgan Company reported the following information for the year ended December 31, 2010:
Net income \ 800,000 Preferred dividends declared and paid 100,000 Common dividends declared and paid 160,000 Average common shares outstanding 140,000 Ending market price per share 30 Net sales 7,400,000
- Refer to Exhibit 6-1.Morgan's 2010 price/earnings ratio was
(Multiple Choice)
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In the first quarter of 2010, Hill Caterpillar Sales reported $900 of income before taxes.The estimated effective tax rate was 20%.In the second quarter, the company reported $800 of income before taxes, and the estimated effective tax rate increased to 25%.
Required:
Compute the second quarter tax expense for Hill Caterpillar Sales.
(Essay)
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Exhibit 6-2 Given the following information for the Green Company:
Net sales (all on account) \ 5,200,000 Interest expense 240,000 Income tax expense 280,000 Net income 420,000 Income tax rate 40\% Total assets: January 1,2010 \ 1,800,000 December 31,2010 2,400,000 Stockholders' equity: January 1,2010 1,500,000 December 31,2010 1,600,000 Current assets, December 31,2010 700,000 Quick assets, December 31,2010 400,000 Current liabilities, December 31, 2010 300,000 Net accounts receivable: January 1,2010 200,000 December 31,2010 180,000
- Refer to Exhibit 6-2.Green's current ratio at December 31, 2010, was
(Multiple Choice)
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Disclosures for reportable segments include all of the following except
(Multiple Choice)
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The following information was obtained from the Clovis Company:
Operating Segment Profit Segment Revenue Assets (Loss ) \ 640 \ 520 \ 88 124 120 32 760 680 40 160 240 (8) 32 64 (4) 80 96 16 480 400 16 ) \2 ,396 \2 ,280 \1 32
Required:
a. Using the revenue test, which segments should be separately reported?
b. Using the asset test, which segments shou'd be separately reported?
c. Using the profit (loss) test, which segments should be separately reported?
(Essay)
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Which one of the following inventory procedures cannot be applied for interim reporting?
(Multiple Choice)
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GAAP mandates certain segment information disclosures.Describe the procedure a company would follow in determining whether an operating segment is reportable.
(Essay)
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Which one of the following ratios is an indicator of the long-run safety of a firm?
(Multiple Choice)
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