Exam 6: Reporting and Interpreting Sales Revenue, Receivables, and Cash

Profitability ratios are frequently used as a basis for evaluating management's operating effectiveness.

Cash and office supplies are both classified as current assets.

In order to compare the financial statements of different companies, it would be desirable to have each company develop its own set of accounting rules and practices.

In what order are current assets usually reported on the statement of financial position?

The financial information reported by Canadian companies is subject to strict regulations and standards issued by government regulators and private standard-setting organizations. Canadian publicly traded corporations must comply with provincial securities regulations that are coordinated by the

A company's return on equity (ROE) that has been increasing over the past three years means the company has generated greater profit for the common share owners.

Cash receipts from customers are greater than sales revenues when there is a(n)

Faithful representation means that accounting information must be complete, neutral, and free from material error.

With respect to fixed assets, net book value and carrying value mean the same thing (i.e., cost minus accumulated depreciation).

The statement of cash flows and the statement of financial position are interrelated because:

Milsap Corporation reported total assets of $2,500,000, total current liabilities of $900,000, and total long-term liabilities of $800,000. What was the shareholders' equity?

The dollar amount of current liabilities is:

Which of the following websites provides access to the Ontario Securities Commission's (OSC) reports filed by companies?

Which statement is false regarding the financial statements?

All long-lived assets including land have estimated useful lives over which they are expected to generate revenue.

In order for information to be relevant, it must be reported on a timely basis.

Gross margin (gross profit) is computed as sales revenue plus cost of goods sold.

Because different financial analysts perform the same basic analysis of a company's financial reports, their conclusions on whether to buy, sell or hold a company's shares are consistent among the analysts.

On January 1, 20B, Milburn Corporation had the following balances in its shareholders' equity accounts: Common Shares - $100,000 (10,000 shares) and Retained Earnings - $30,000. During 20B, the company issued 1,000 additional shares of common shares for $10 per share, reported profit of $40,000, and paid cash dividends of $20,000. What amount of total shareholders' equity would the company report in its December 31, 20B, statement of financial position?

The following data were taken from the adjusted trial balance of Star Search Video Company. Required: Prepare a classified statement of financial position in good form at December 31, 20D. (Ignore income taxes).