Question 1

To be faithfully representative, accounting information should predict future events, confirm prior expectations, and be reported on a timely basis.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a measure of liquidity?

Accepted Answer

A) Working capital 
B) Profit margin 
C) Earnings per share 
D) Debt to assets ratio 
A) Working capital 
B) Profit margin 
C) Earnings per share 
D) Debt to assets ratio

Question 3

Information presented in a clear and concise fashion so that users can comprehend its meaning is an application of

Accepted Answer

A) consistency. 
B) timeliness. 
C) verifiability. 
D) understandability. 
A) consistency. 
B) timeliness. 
C) verifiability. 
D) understandability.

Question 4

N3 Corporation has assets of $4,200,000, common stock of $1,092,000, and retained earnings of $665,000.What are the creditors' claims on their assets?

Accepted Answer

A) $3,773,000 
B) $1,757,000 
C) $2,443,000 
D) $4,627,000 
A) $3,773,000 
B) $1,757,000 
C) $2,443,000 
D) $4,627,000

Question 5

The concept that a business has a reasonable expectation of remaining in business for the foreseeable future is called the

Accepted Answer

A) economic entity assumption. 
B) monetary unit assumption. 
C) periodicity assumption. 
D) going concern assumption. 
A) economic entity assumption. 
B) monetary unit assumption. 
C) periodicity assumption. 
D) going concern assumption.

Question 6

Which of the following statements is true?

Accepted Answer

A) Earnings per share is an internal measure and is not used by stockholders. 
B) The denominator used in computing earnings per share represents the shares of common stock outstanding on the last day of the accounting period. 
C) Net income is not adjusted when computing earnings per share. 
D) By comparing earnings per share of a single corporation over time, a stockholder can evaluate the corporation's relative earnings performance. 
A) Earnings per share is an internal measure and is not used by stockholders. 
B) The denominator used in computing earnings per share represents the shares of common stock outstanding on the last day of the accounting period. 
C) Net income is not adjusted when computing earnings per share. 
D) By comparing earnings per share of a single corporation over time, a stockholder can evaluate the corporation's relative earnings performance.

Question 7

The convention of consistency pertains to the use of the same accounting principles by firms in the same industry.

Accepted Answer

A) True 
 B)False

Question 8

Solvency ratios measure the short-term ability of the company to pay its maturing obligations.

Accepted Answer

A) True 
 B)False

Question 9

In 2022, Grider Corporation had cash receipts of $35,000, including additional owner investments of $10,000, and cash disbursements of $20,000.Grider purchased equipment of $12,000 on account.Grider's cash balance at December 31, 2022 was $65,000.What was Grider's January 1, 2022 cash balance?

Accepted Answer

A) $50,000 
B) $60,000 
C) $85,000 
D) $80,000 
A) $50,000 
B) $60,000 
C) $85,000 
D) $80,000

Question 10

What organization issues U.S.accounting standards?

Accepted Answer

A) Securities and Exchange Commission 
B) International Accounting Standards Committee 
C) International Auditing Standards Committee 
D) Financial Accounting Standards Board 
A) Securities and Exchange Commission 
B) International Accounting Standards Committee 
C) International Auditing Standards Committee 
D) Financial Accounting Standards Board

Question 11

Connor Corporation hired a new accountant.Over the next four years, the accountant used four different accounting methods to record depreciation for Connor's equipment.Which of the following qualities of useful information has Connor most likely violated?

Accepted Answer

A) Comparability 
B) Relevance 
C) Faithful representation 
D) Consistency 
A) Comparability 
B) Relevance 
C) Faithful representation 
D) Consistency

Question 12

When preparing financial statements, the accountant assumes that the business will stay in business for the foreseeable future.

Accepted Answer

A) True 
 B)False

Question 13

The economic entity assumption states that assets should be recorded at their cost.

Accepted Answer

A) True 
 B)False

Question 14

The debt to assets ratio is computed by dividing

Accepted Answer

A) long-term liabilities by total assets. 
B) long-term liabilities by average assets. 
C) total liabilities by total assets. 
D) total liabilities by average assets. 
A) long-term liabilities by total assets. 
B) long-term liabilities by average assets. 
C) total liabilities by total assets. 
D) total liabilities by average assets.

Question 15

Liquidity ratios measure the short-term ability of a company to pay its maturing obligations and meet unexpected needs for cash.

Accepted Answer

A) True 
 B)False

Question 16

The investment category on the balance sheet normally includes investments that are intended to be held for a short period of time (less than one year).

Accepted Answer

A) True 
 B)False

Question 17

A measure of profitability is

Accepted Answer

A) the current ratio. 
B) the debt to assets ratio. 
C) earnings per share. 
D) working capital. 
A) the current ratio. 
B) the debt to assets ratio. 
C) earnings per share. 
D) working capital.

Question 18

On a classified balance sheet, intangible assets are

Accepted Answer

A) listed directly under current assets on the balance sheet. 
B) not listed on the balance sheet because they do not have physical substance. 
C) listed after property, plant, and equipment. 
D) listed as a long-term investment on the balance sheet. 
A) listed directly under current assets on the balance sheet. 
B) not listed on the balance sheet because they do not have physical substance. 
C) listed after property, plant, and equipment. 
D) listed as a long-term investment on the balance sheet.

Question 19

The following information is available for Bradshaw Corporation and Newell Corporation:   Based on the information for both Bradshaw and Newell over the two-year period, the earnings per share calculations (rounded to two decimals) indicate that

Accepted Answer

A) Bradshaw is seeing a greater performance improvement than Newell. 
B) the earnings available to common stockholders is decreasing for Newell and increasing for Bradshaw. 
C) the earnings per share calculations for both companies assume that changes in shares between 2021 and 2022 occur in the middle of the year. 
D) Newell is more financially stable than Bradshaw. 
A) Bradshaw is seeing a greater performance improvement than Newell. 
B) the earnings available to common stockholders is decreasing for Newell and increasing for Bradshaw. 
C) the earnings per share calculations for both companies assume that changes in shares between 2021 and 2022 occur in the middle of the year. 
D) Newell is more financially stable than Bradshaw.

Question 20

Which of the following would not be classified as a long-term liability?

Accepted Answer

A) Current maturities of long-term debt 
B) Bonds payable 
C) Mortgage payable 
D) Lease liabilities 
A) Current maturities of long-term debt 
B) Bonds payable 
C) Mortgage payable 
D) Lease liabilities

To be faithfully representative, accounting information should predict future events, confirm prior expectations, and be reported on a timely basis.

Which of the following is a measure of liquidity?

Information presented in a clear and concise fashion so that users can comprehend its meaning is an application of

N3 Corporation has assets of $4,200,000, common stock of $1,092,000, and retained earnings of $665,000.What are the creditors' claims on their assets?

The concept that a business has a reasonable expectation of remaining in business for the foreseeable future is called the

Which of the following statements is true?

The convention of consistency pertains to the use of the same accounting principles by firms in the same industry.

Solvency ratios measure the short-term ability of the company to pay its maturing obligations.

In 2022, Grider Corporation had cash receipts of $35,000, including additional owner investments of $10,000, and cash disbursements of $20,000.Grider purchased equipment of $12,000 on account.Grider's cash balance at December 31, 2022 was $65,000.What was Grider's January 1, 2022 cash balance?

What organization issues U.S.accounting standards?

Connor Corporation hired a new accountant.Over the next four years, the accountant used four different accounting methods to record depreciation for Connor's equipment.Which of the following qualities of useful information has Connor most likely violated?

When preparing financial statements, the accountant assumes that the business will stay in business for the foreseeable future.

The economic entity assumption states that assets should be recorded at their cost.

The debt to assets ratio is computed by dividing

Liquidity ratios measure the short-term ability of a company to pay its maturing obligations and meet unexpected needs for cash.

The investment category on the balance sheet normally includes investments that are intended to be held for a short period of time (less than one year).

A measure of profitability is

On a classified balance sheet, intangible assets are

The following information is available for Bradshaw Corporation and Newell Corporation: Based on the information for both Bradshaw and Newell over the two-year period, the earnings per share calculations (rounded to two decimals) indicate that

Which of the following would not be classified as a long-term liability?

Introduction to Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

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Exam 2: A Further Look at Financial Statements

To be faithfully representative, accounting information should predict future events, confirm prior expectations, and be reported on a timely basis.

Which of the following is a measure of liquidity?

Information presented in a clear and concise fashion so that users can comprehend its meaning is an application of

N3 Corporation has assets of $4,200,000, common stock of $1,092,000, and retained earnings of $665,000.What are the creditors' claims on their assets?

The concept that a business has a reasonable expectation of remaining in business for the foreseeable future is called the

Which of the following statements is true?

The convention of consistency pertains to the use of the same accounting principles by firms in the same industry.

Solvency ratios measure the short-term ability of the company to pay its maturing obligations.

In 2022, Grider Corporation had cash receipts of $35,000, including additional owner investments of $10,000, and cash disbursements of $20,000.Grider purchased equipment of $12,000 on account.Grider's cash balance at December 31, 2022 was $65,000.What was Grider's January 1, 2022 cash balance?

What organization issues U.S.accounting standards?

Connor Corporation hired a new accountant.Over the next four years, the accountant used four different accounting methods to record depreciation for Connor's equipment.Which of the following qualities of useful information has Connor most likely violated?

When preparing financial statements, the accountant assumes that the business will stay in business for the foreseeable future.

The economic entity assumption states that assets should be recorded at their cost.

The debt to assets ratio is computed by dividing

Liquidity ratios measure the short-term ability of a company to pay its maturing obligations and meet unexpected needs for cash.

The investment category on the balance sheet normally includes investments that are intended to be held for a short period of time (less than one year).

A measure of profitability is

On a classified balance sheet, intangible assets are

The following information is available for Bradshaw Corporation and Newell Corporation: Based on the information for both Bradshaw and Newell over the two-year period, the earnings per share calculations (rounded to two decimals) indicate that

Which of the following would not be classified as a long-term liability?

Introduction to Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

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