Question 1

The calculation net income/average total assets is the formula for which of the following ratios

Accepted Answer

A) Return on assets 
B)  Profit margin 
C)  Asset turnover 
D)  Asset usage 
A) Return on assets 
B)  Profit margin 
C)  Asset turnover 
D)  Asset usage A

Question 2

There would probably be a major difference between a statement of source and application of working capital and a cash flow statement in the treatment of

Accepted Answer

A)  Dividends declared and paid 
B)  Sales of noninventory assets for cash at a loss 
C)  Payment of long-term debt 
D)  A change during the period in the accounts payable balance 
A)  Dividends declared and paid 
B)  Sales of noninventory assets for cash at a loss 
C)  Payment of long-term debt 
D)  A change during the period in the accounts payable balance D

Question 3

What questions does the statement of cash flows enable financial statement users to answer?

Accepted Answer

The statement of changes in financial position was designed to enable financial statement users to Answer: such questions as:
1. Where did the profits go?
2. Why weren't dividends larger?
3. How was it possible to distribute dividends in the presence of a loss?
4. Why are current assets down when there was a profit?
5. Why is extra financing required?
6. How was the expansion financed?
7. Where did the funds from the sale of securities go?
8. How was the debt retirement accomplished?
9. How was the increase in working capital financed?

Question 4

The working capital format is one possible format for presenting a statement of changes in financial position. Which of the following formats is (are) also theoretically acceptable? 
Cash$\quad$Quick Assets

Accepted Answer

A)  acceptable$\quad$Not acceptable 
B)  Not acceptable$\quad$ Not acceptable 
C)  Not acceptable $\quad$Acceptable 
D)  Acceptable$\quad$ Acceptable 
A)  acceptable$\quad$Not acceptable 
B)  Not acceptable$\quad$ Not acceptable 
C)  Not acceptable $\quad$Acceptable 
D)  Acceptable$\quad$ Acceptable

Question 5

Investments in equity securities are disclosed as current assets on a company's balance sheet if

Accepted Answer

A)  Management intends to sell them within a year and they have a ready market exists. 
B)  The fair market value cannot be determined. 
C)  Management intends to convert them into common stock within one year. 
D)  Management owns less than 50% of the outstanding stock. 
A)  Management intends to sell them within a year and they have a ready market exists. 
B)  The fair market value cannot be determined. 
C)  Management intends to convert them into common stock within one year. 
D)  Management owns less than 50% of the outstanding stock.

Question 6

A gain on the sale of plant assets in the ordinary course of business should be presented in a statement of cash flows as a (an)

Accepted Answer

A)  Source and use of cash 
B)  Use of cash 
C)  Addition to income from continuing operations 
D)  Deduction from income from continuing operations 
A)  Source and use of cash 
B)  Use of cash 
C)  Addition to income from continuing operations 
D)  Deduction from income from continuing operations

Question 7

The valuation basis used in conventional financial statements is

Accepted Answer

A)  Replacement cost 
B)  Market value 
C)  Original cost 
D)  A mixture of costs and values 
A)  Replacement cost 
B)  Market value 
C)  Original cost 
D)  A mixture of costs and values

Question 8

The definition of fair value in SFAS No 157 (FASB ASC 820) is

Accepted Answer

A) Entry price based 
B)  Exit price based 
C)  Replacement cost based 
D)  Historical cost based 
A) Entry price based 
B)  Exit price based 
C)  Replacement cost based 
D)  Historical cost based

Question 9

Which of the following is the lowest level of the SFAS 157 (FASB ASC 820) fair value hierarchy?

Accepted Answer

A)  Unobservable inputs (that are corroborated by observable market data) 
B)  Unobservable inputs (that are not corroborated by observable market data) 
C)  Observable market-based inputs (or unobservable inputs that are corroborated by market data) 
D)  Quoted market prices for identical assets or liabilities in active markets 
A)  Unobservable inputs (that are corroborated by observable market data) 
B)  Unobservable inputs (that are not corroborated by observable market data) 
C)  Observable market-based inputs (or unobservable inputs that are corroborated by market data) 
D)  Quoted market prices for identical assets or liabilities in active markets

Question 10

The balance sheet discloses

Accepted Answer

A)  Stocks 
B)  Flows 
C)  Both stocks and flows 
D)  Neither stocks nor flows 
A)  Stocks 
B)  Flows 
C)  Both stocks and flows 
D)  Neither stocks nor flows

Question 11

List three valuation techniques currently used on the balance sheet and discuss how each are used (What accounts?).

Accepted Answer

Asset Meas

Question 12

Net cash provided (used) by operating activities − net cash used in acquiring property, plant is the calculation for

Accepted Answer

A)  Free cash flow 
B)  Cash flow from investing activities 
C)  Working capital 
D)  Current ratio 
A)  Free cash flow 
B)  Cash flow from investing activities 
C)  Working capital 
D)  Current ratio

Question 13

Which of the following is not a component of equity?

Accepted Answer

A) Common stock 
B)  Treasury stock 
C)  Retained earnings 
D)  Unearned revenue 
A) Common stock 
B)  Treasury stock 
C)  Retained earnings 
D)  Unearned revenue

Question 14

How is fair value defined in SFAS No. 157 (FASB ASC 820)?

Accepted Answer

Fair value is the price that w

Question 15

A statement of cash flows should be issued by a profit-oriented business

Accepted Answer

A)  As an alternative to the statement of income and retained earnings 
B)  Only if the business classifies its assets and liabilities as current and noncurrent 
C)  Only when two-year comparative balance sheets are not issued 
D)  Whenever a balance sheet and a statement of income and retained earnings are issued 
A)  As an alternative to the statement of income and retained earnings 
B)  Only if the business classifies its assets and liabilities as current and noncurrent 
C)  Only when two-year comparative balance sheets are not issued 
D)  Whenever a balance sheet and a statement of income and retained earnings are issued

Question 16

Making and collecting loans and disposing of property, plant, and equipment are

Accepted Answer

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

Question 17

Discuss the following balance sheet elements as defined by SFAC No. 6:
a. Assets
b. Equity
c. Equity

Accepted Answer

a. Assets
Assets are probable future eco

Question 18

Define the following terms:
a. Current assets
b. Investments
c. Property, plant and equipment
d. Current liabilities
e. Treasury stock

Accepted Answer

a. Current assets
Current assets are tho

Question 19

What is reported on the statement of cash flows?

Accepted Answer

A)  Operating, investing, and financing activities of an entity for a period of time 
B)  All revenues and expense listed by operating, financing, and operating actitivity 
C)  Operating, investing, and financing activities of an entity at the balance sheet date 
D)  A detail of all incoming and outgoing cash flows of a business 
A)  Operating, investing, and financing activities of an entity for a period of time 
B)  All revenues and expense listed by operating, financing, and operating actitivity 
C)  Operating, investing, and financing activities of an entity at the balance sheet date 
D)  A detail of all incoming and outgoing cash flows of a business

Question 20

A firm's ability to obtain cash for business operations change is the definition of

Accepted Answer

A)  Liquidity 
B)  Solvency 
C)  Financial flexibility 
D)  Working capital 
A)  Liquidity 
B)  Solvency 
C)  Financial flexibility 
D)  Working capital

The calculation net income/average total assets is the formula for which of the following ratios

There would probably be a major difference between a statement of source and application of working capital and a cash flow statement in the treatment of

What questions does the statement of cash flows enable financial statement users to answer?

The working capital format is one possible format for presenting a statement of changes in financial position. Which of the following formats is (are) also theoretically acceptable? Cash $\quad$ Quick Assets

Investments in equity securities are disclosed as current assets on a company's balance sheet if

A gain on the sale of plant assets in the ordinary course of business should be presented in a statement of cash flows as a (an)

The valuation basis used in conventional financial statements is

The definition of fair value in SFAS No 157 (FASB ASC 820) is

Which of the following is the lowest level of the SFAS 157 (FASB ASC 820) fair value hierarchy?

The balance sheet discloses

List three valuation techniques currently used on the balance sheet and discuss how each are used (What accounts?).

Net cash provided (used) by operating activities − net cash used in acquiring property, plant is the calculation for

Which of the following is not a component of equity?

How is fair value defined in SFAS No. 157 (FASB ASC 820)?

A statement of cash flows should be issued by a profit-oriented business

Making and collecting loans and disposing of property, plant, and equipment are

Discuss the following balance sheet elements as defined by SFAC No. 6: a. Assets b. Equity c. Equity

Define the following terms: a. Current assets b. Investments c. Property, plant and equipment d. Current liabilities e. Treasury stock

What is reported on the statement of cash flows?

A firm's ability to obtain cash for business operations change is the definition of

The Development of Accounting Theory

The Pursuit of the Conceptual Framework

International Accounting

Research Methodology and Theories on the Uses of Accounting Information

Income Concepts, Revenue Recognition, and Other Methods of Reporting

Financial Statement I: the Income Statement

Working Capital

Long-Term Assets I: Property, Plant, and Equipment

Long-Term Assets Ii : Investments and Intangibles

Long-Term Liabilities

Accounting for Income Taxes

Leases

Pensions and Other Postretirement Benefits

Equity

Accounting for Multiple Entities

Financial Reporting Disclosure Requirements and Ethical Responsibilities

Filters

Exam 7: Financial Statements Ii: the Balance Sheet and the Statement of Cash Flows

The calculation net income/average total assets is the formula for which of the following ratios

There would probably be a major difference between a statement of source and application of working capital and a cash flow statement in the treatment of

What questions does the statement of cash flows enable financial statement users to answer?

The working capital format is one possible format for presenting a statement of changes in financial position. Which of the following formats is (are) also theoretically acceptable? Cash \quad Quick Assets

Investments in equity securities are disclosed as current assets on a company's balance sheet if

A gain on the sale of plant assets in the ordinary course of business should be presented in a statement of cash flows as a (an)

The valuation basis used in conventional financial statements is

The definition of fair value in SFAS No 157 (FASB ASC 820) is

Which of the following is the lowest level of the SFAS 157 (FASB ASC 820) fair value hierarchy?

The balance sheet discloses

List three valuation techniques currently used on the balance sheet and discuss how each are used (What accounts?).

Net cash provided (used) by operating activities − net cash used in acquiring property, plant is the calculation for

Which of the following is not a component of equity?

How is fair value defined in SFAS No. 157 (FASB ASC 820)?

A statement of cash flows should be issued by a profit-oriented business

Making and collecting loans and disposing of property, plant, and equipment are

Discuss the following balance sheet elements as defined by SFAC No. 6: a. Assets b. Equity c. Equity

Define the following terms: a. Current assets b. Investments c. Property, plant and equipment d. Current liabilities e. Treasury stock

What is reported on the statement of cash flows?

A firm's ability to obtain cash for business operations change is the definition of

The Development of Accounting Theory

The Pursuit of the Conceptual Framework

International Accounting

Research Methodology and Theories on the Uses of Accounting Information

Income Concepts, Revenue Recognition, and Other Methods of Reporting

Financial Statement I: the Income Statement

Working Capital

Long-Term Assets I: Property, Plant, and Equipment

Long-Term Assets Ii : Investments and Intangibles

Long-Term Liabilities

Accounting for Income Taxes

Leases

Pensions and Other Postretirement Benefits

Equity

Accounting for Multiple Entities

Financial Reporting Disclosure Requirements and Ethical Responsibilities

Filters

The working capital format is one possible format for presenting a statement of changes in financial position. Which of the following formats is (are) also theoretically acceptable? Cash $\quad$ Quick Assets