Exam 2: Financial Statements and the Annual Report

Marvel Shoes Marvel Shoes reported the following items on its statement of cash flows for the current year: -Read the information about Marvel Shoes.What was the amount of net increase or decrease in the cash balance for Marvel Shoes for the current year?

Which of the following best describes a company's financing activities?

The operating cycle for all businesses is one year.

Grand Stores, Inc.is concerned about its profitability for the current year, since its profit margin has dropped 10% since last year.Which of the following is the least useful comparison in evaluating the drop in Grand Stores' profit margin?

Relevant information can be quantitative or qualitative.In deciding whether to go to college part-time or full-time, which of the following is a qualitative factor for a student?

Funds raised from financing activities should be invested in assets that can be used to carry on business operations.

Webb Company Selected data from the accounting records of Webb Company are listed below: -Read the information about Webb Company.What is Webb's net income?

The purchase of inventory for cash will cause the current ratio to decrease.

have claims to an entity's economic resources.

The excess of current assets over current liabilities is referred to as working capital.

An investor found the following in an annual report: "The financial statements, in our opinion, present fairly the financial position, operating results, and cash flows, in conformity with accounting principles generally accepted in the United States." In which section of the annual report did the investor find this?

What is the correct method for calculating working capital?

Bartlett Industries Bartlett Industries began operations on January 2, 2015, with an investment of $50,000 by each of its two stockholders.Net income for its first year of business was $240,000.Bartlett Industries paid a total of $100,000 in dividends to its stockholders during the year. -Read the information about Bartlett Industries.The company's dividends for the year

Deal Mart The 2014 income statement of Deal Mart shows operating revenues of $130,800, selling expenses of $37,100, general and administrative expenses of $34,900, interest expense of $900, and income tax expense of $11,430.Deal Mart's stockholders' equity was $280,000 at the beginning of the year and $320,000 at the end of the year.The company has 20,000 shares of stock outstanding at December 31, 2014. -Read the information about Deal Mart.What is Deal Mart's net income?

On the statement of cash flows, the section involves the acquisition and sale of long-term assets.

Some analysts properly refer to a company's profit margin as its return on assets.

In the stockholders' equity section of a classified balance sheet, a distinction is made between amounts invested by owners and amounts accumulated from business earnings.

Cook, Inc., a manufacturer of tires, has given you its most recent annual report in an effort to obtain a sizable loan.The company is very profitable and appears to have a sound financial position.Based on a report presented on prime-time television last night, you are aware that Cook is a defendant in several lawsuits related to its defective tires that cause vehicles to overturn.The information presented on television is an example of financial information that is

is the quality of accounting information that allows a user to compare two or more accounting periods for a single company.

Obligations related to operating activities that will be paid within the company's operating cycle must be reported as current liabilities on a classified balance sheet.