Question 1

The information needed to determine if companies can pay their current obligations is the

Accepted Answer

A) net income for this year. 
B) projected net income for next year. 
C) relationship between current assets and current liabilities. 
D) relationship between short-term and long-term liabilities. 
A) net income for this year. 
B) projected net income for next year. 
C) relationship between current assets and current liabilities. 
D) relationship between short-term and long-term liabilities.

Question 2

A material item is one that is likely to influence an investor's decision.

Accepted Answer

A) True 
 B)False

Question 3

The Mac Company has four plants nationwide that cost $450 million.Accumulated depreciation on the plants is $100 million at December 31, 2022.The current fair value of the plants at that date is $300 million.The plants will be reported on the December 31, 2022 balance sheet at

Accepted Answer

A) $350 million. 
B) $700 million. 
C) $300 million. 
D) $600 million. 
A) $350 million. 
B) $700 million. 
C) $300 million. 
D) $600 million.

Question 4

These are selected account balances on December 31, 2022.   What is the total amount of property, plant, and equipment that will appear on the balance sheet?

Accepted Answer

A) $2,250,000 
B) $1,950,000 
C) $2,700,000 
D) $1,725,000 
A) $2,250,000 
B) $1,950,000 
C) $2,700,000 
D) $1,725,000

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Use the following data to determine the total amount of working capital.

Accepted Answer

A) $606,000 
B) $351,000 
C) $381,000 
D) $261,000 
A) $606,000 
B) $351,000 
C) $381,000 
D) $261,000

Question 7

Using the following balance sheet and income statement data, what is the earnings per share?   Average common shares outstanding was 15,000.

Accepted Answer

A) $3.00 
B) $4.20 
C) $0.33 
D) $0.50 
A) $3.00 
B) $4.20 
C) $0.33 
D) $0.50

Question 8

Profitability ratios measure the operating success of a company for a given period of time.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a constraint in accounting?

Accepted Answer

A) Comparability 
B) Cost 
C) Consistency 
D) Relevance 
A) Comparability 
B) Cost 
C) Consistency 
D) Relevance

Question 10

Which of the following is not classified properly as a current asset?

Accepted Answer

A) Supplies 
B) Short-term debt investments 
C) A fund to be used to purchase a building within the next year 
D) A receivable from the sale of an asset to be collected in two years 
A) Supplies 
B) Short-term debt investments 
C) A fund to be used to purchase a building within the next year 
D) A receivable from the sale of an asset to be collected in two years

Question 11

A liability is classified as a current liability if it is to be paid within the coming year.

Accepted Answer

A) True 
 B)False

Question 12

A current asset is

Accepted Answer

A) the last asset purchased by a business. 
B) an asset which is currently being used to produce a product or service. 
C) usually found as a separate classification in the income statement. 
D) expected to be converted to cash or used in the business within one year or one operating cycle, whichever is longer. 
A) the last asset purchased by a business. 
B) an asset which is currently being used to produce a product or service. 
C) usually found as a separate classification in the income statement. 
D) expected to be converted to cash or used in the business within one year or one operating cycle, whichever is longer.

Question 13

Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment.

Accepted Answer

A) $540,000 
B) $500,000 
C) $360,000 
D) $420,000 
A) $540,000 
B) $500,000 
C) $360,000 
D) $420,000

Question 14

A liquidity ratio measures the

Accepted Answer

A) income or operating success of a company over a period of time. 
B) ability of a company to survive over a long period of time. 
C) short-term ability of a company to pay its maturing obligations and to meet unexpected needs for cash. 
D) percentage of total financing provided by creditors. 
A) income or operating success of a company over a period of time. 
B) ability of a company to survive over a long period of time. 
C) short-term ability of a company to pay its maturing obligations and to meet unexpected needs for cash. 
D) percentage of total financing provided by creditors.

Question 15

Generally accepted accounting principles

Accepted Answer

A) are accounting rules formulated by the Internal Revenue Service. 
B) are sound in theory but rarely used in real life. 
C) are accounting rules that are recognized as a general guide for financial reporting. 
D) have eliminated all errors in accounting. 
A) are accounting rules formulated by the Internal Revenue Service. 
B) are sound in theory but rarely used in real life. 
C) are accounting rules that are recognized as a general guide for financial reporting. 
D) have eliminated all errors in accounting.

Question 16

Mitchell Corporation has current assets of $1,600,000 and current liabilities of $750,000.If they issue $200,000 of new stock what will their new current ratio be? (rounded)

Accepted Answer

A) 2.4:1 
B) 1.9:1 
C) 1.7:1 
D) 2.13:1 
A) 2.4:1 
B) 1.9:1 
C) 1.7:1 
D) 2.13:1

Question 17

A company using the same accounting principles from year to year is an application of

Accepted Answer

A) timeliness. 
B) consistency. 
C) full disclosure. 
D) materiality. 
A) timeliness. 
B) consistency. 
C) full disclosure. 
D) materiality.

Question 18

Use the following data to determine the total amount of working capital.

Accepted Answer

A) $360,000 
B) $390,000 
C) $130,000 
D) $180,000 
A) $360,000 
B) $390,000 
C) $130,000 
D) $180,000

Question 19

If Morris Corporation has a negative $131 million free cash flow, which of the following statements is most likely true?

Accepted Answer

A) Morris' capital expenditures plus cash dividends is less than its cash provided by operations. 
B) This free cash flow indicates that Morris will be able to repay its long-term obligations when they come due. 
C) This free cash flow indicates that Morris has ability to retire its stock. 
D) Morris' cash provided by operations is less than its cash dividends plus capital expenditures. 
A) Morris' capital expenditures plus cash dividends is less than its cash provided by operations. 
B) This free cash flow indicates that Morris will be able to repay its long-term obligations when they come due. 
C) This free cash flow indicates that Morris has ability to retire its stock. 
D) Morris' cash provided by operations is less than its cash dividends plus capital expenditures.

Question 20

GAAP stands for generally accepted accounting procedures.

Accepted Answer

A) True 
 B)False

The information needed to determine if companies can pay their current obligations is the

A material item is one that is likely to influence an investor's decision.

The Mac Company has four plants nationwide that cost $450 million.Accumulated depreciation on the plants is $100 million at December 31, 2022.The current fair value of the plants at that date is $300 million.The plants will be reported on the December 31, 2022 balance sheet at

These are selected account balances on December 31, 2022. What is the total amount of property, plant, and equipment that will appear on the balance sheet?

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

Use the following data to determine the total amount of working capital.

Using the following balance sheet and income statement data, what is the earnings per share? Average common shares outstanding was 15,000.

Profitability ratios measure the operating success of a company for a given period of time.

Which of the following is a constraint in accounting?

Which of the following is not classified properly as a current asset?

A liability is classified as a current liability if it is to be paid within the coming year.

A current asset is

Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment.

A liquidity ratio measures the

Generally accepted accounting principles

Mitchell Corporation has current assets of $1,600,000 and current liabilities of $750,000.If they issue $200,000 of new stock what will their new current ratio be? (rounded)

A company using the same accounting principles from year to year is an application of

Use the following data to determine the total amount of working capital.

If Morris Corporation has a negative $131 million free cash flow, which of the following statements is most likely true?

GAAP stands for generally accepted accounting procedures.

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

Filters

Exam 2: A Further Look at Financial Statements

The information needed to determine if companies can pay their current obligations is the

A material item is one that is likely to influence an investor's decision.

The Mac Company has four plants nationwide that cost $450 million.Accumulated depreciation on the plants is $100 million at December 31, 2022.The current fair value of the plants at that date is $300 million.The plants will be reported on the December 31, 2022 balance sheet at

These are selected account balances on December 31, 2022. What is the total amount of property, plant, and equipment that will appear on the balance sheet?

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

Use the following data to determine the total amount of working capital.

Using the following balance sheet and income statement data, what is the earnings per share? Average common shares outstanding was 15,000.

Profitability ratios measure the operating success of a company for a given period of time.

Which of the following is a constraint in accounting?

Which of the following is not classified properly as a current asset?

A liability is classified as a current liability if it is to be paid within the coming year.

A current asset is

Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment.

A liquidity ratio measures the

Generally accepted accounting principles

Mitchell Corporation has current assets of $1,600,000 and current liabilities of $750,000.If they issue $200,000 of new stock what will their new current ratio be? (rounded)

A company using the same accounting principles from year to year is an application of

Use the following data to determine the total amount of working capital.

If Morris Corporation has a negative $131 million free cash flow, which of the following statements is most likely true?

GAAP stands for generally accepted accounting procedures.

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

Filters