Question 1

Which of the following is not a current liability?

Accepted Answer

A)  Salaries and Wages Payable 
B)  Accounts Payable 
C)  Taxes Payable 
D)  Bonds Payable 
A)  Salaries and Wages Payable 
B)  Accounts Payable 
C)  Taxes Payable 
D)  Bonds Payable D

Question 2

The economic entity assumption is that a company will remain in operations for the foreseeable future.

Accepted Answer

A) True 
 B)False  False

Question 3

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. C

Question 4

The Mac Company has four plants nationwide that cost $350 million. The current fair value of the plants is $300 million. The plants will be reported as assets 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 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

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

Accepted Answer

A)  $686,000 
B)  $516,000 
C)  $556,000 
D)  $376,000 
A)  $686,000 
B)  $516,000 
C)  $556,000 
D)  $376,000

Question 7

Which of the following is not an accounting assumption?

Accepted Answer

A)  Integrity 
B)  Going concern 
C)  Periodicity 
D)  Economic entity 
A)  Integrity 
B)  Going concern 
C)  Periodicity 
D)  Economic entity

Question 8

The subtotal net assets is used in

Accepted Answer

A)  both GAAP and IFRS. 
B)  GAAP but not IFRS. 
C)  IFRS but not GAAP. 
D)  neither IFRS nor GAAP. 
A)  both GAAP and IFRS. 
B)  GAAP but not IFRS. 
C)  IFRS but not GAAP. 
D)  neither IFRS nor GAAP.

Question 9

The following lettered items represent a classification scheme for a balance sheet, and the numbered items represent data found on balance sheets. In the blank next to each account, write the letter indicating to which category it belongs.
A. Current assets
B. Investments
C. Property, plant, and equipment
D. Intangible assets
E. Current liabilities
F. Long-term liabilities
G. Stockholders' equity
H. Not on the balance sheet

Accepted Answer

The answer of The following lettered items represent a classification...

Question 10

Characteristics associated with relevant accounting information are

Accepted Answer

A)  comparability and timeliness. 
B)  predictive value and confirmatory value. 
C)  neutral and verifiable. 
D)  consistency and understandability. 
A)  comparability and timeliness. 
B)  predictive value and confirmatory value. 
C)  neutral and verifiable. 
D)  consistency and understandability.

Question 11

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 12

Accounting information should be verifiable in order to enhance

Accepted Answer

A)  comparability. 
B)  faithful representation. 
C)  consistency. 
D)  relevance. 
A)  comparability. 
B)  faithful representation. 
C)  consistency. 
D)  relevance.

Question 13

Use the following data to determine the total dollar amount of assets to be classified as investments.

Accepted Answer

A)  $0 
B)  $310,000 
C)  $170,000 
D)  $390,000 
A)  $0 
B)  $310,000 
C)  $170,000 
D)  $390,000

Question 14

The classified balance sheet is

Accepted Answer

A)  required under GAAP but not under IFRS. 
B)  required under IFRS in the same format as under GAAP. 
C)  required under IFRS but not under GAAP. 
D)  required under IFRS with certain variations in format as compared to GAAP. 
A)  required under GAAP but not under IFRS. 
B)  required under IFRS in the same format as under GAAP. 
C)  required under IFRS but not under GAAP. 
D)  required under IFRS with certain variations in format as compared to GAAP.

Question 15

The economic entity assumption states that economic events can be identified with a particular unit of accountability.

Accepted Answer

A) True 
 B)False

Question 16

Free cash flow represents

Accepted Answer

A)  cash provided by operations less adjustments for capital expenditures and dividends. 
B)  a measurement of a company's cash generating ability. 
C)  a measure of solvency. 
D)  All of these answer choices are correct. 
A)  cash provided by operations less adjustments for capital expenditures and dividends. 
B)  a measurement of a company's cash generating ability. 
C)  a measure of solvency. 
D)  All of these answer choices are correct.

Question 17

Under IFRS and under GAAP, current assets are listed in

Accepted Answer

The answer of Under IFRS and under GAAP, current assets...

Question 18

For accounting purposes, business transactions should be kept separate from the personal transactions of the stockholders of the business.

Accepted Answer

A) True 
 B)False

Question 19

K2 Corporation has assets of $2,400,000, common stock of $624,000, and retained earnings of $380,000. What are the creditors' claims on their assets?

Accepted Answer

A)  $2,156,000 
B)  $1,004,000 
C)  $1,396,000 
D)  $2,644,000 
A)  $2,156,000 
B)  $1,004,000 
C)  $1,396,000 
D)  $2,644,000

Question 20

Kingery Corporation has current assets of $1,800,000 and current liabilities of $750,000. If they pay $250,000 of their accounts payable what will their new current ratio be?

Accepted Answer

A)  3.1:1 
B)  2.4:1 
C)  3.6:1 
D)  2.0:1 
A)  3.1:1 
B)  2.4:1 
C)  3.6:1 
D)  2.0:1

Which of the following is not a current liability?

The economic entity assumption is that a company will remain in operations for the foreseeable future.

A liquidity ratio measures the

The Mac Company has four plants nationwide that cost $350 million. The current fair value of the plants is $300 million. The plants will be reported as assets at

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

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

Which of the following is not an accounting assumption?

The subtotal net assets is used in

Characteristics associated with relevant accounting information are

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).

Accounting information should be verifiable in order to enhance

Use the following data to determine the total dollar amount of assets to be classified as investments.

The classified balance sheet is

The economic entity assumption states that economic events can be identified with a particular unit of accountability.

Free cash flow represents

Under IFRS and under GAAP, current assets are listed in

For accounting purposes, business transactions should be kept separate from the personal transactions of the stockholders of the business.

K2 Corporation has assets of $2,400,000, common stock of $624,000, and retained earnings of $380,000. What are the creditors' claims on their assets?

Kingery Corporation has current assets of $1,800,000 and current liabilities of $750,000. If they pay $250,000 of their accounts payable what will their new current ratio be?

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 and Acquisitions in Accounting

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Exam 2: A Further Look at Financial Statements

Which of the following is not a current liability?

The economic entity assumption is that a company will remain in operations for the foreseeable future.

A liquidity ratio measures the

The Mac Company has four plants nationwide that cost $350 million. The current fair value of the plants is $300 million. The plants will be reported as assets at

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

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

Which of the following is not an accounting assumption?

The subtotal net assets is used in

Characteristics associated with relevant accounting information are

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).

Accounting information should be verifiable in order to enhance

Use the following data to determine the total dollar amount of assets to be classified as investments.

The classified balance sheet is

The economic entity assumption states that economic events can be identified with a particular unit of accountability.

Free cash flow represents

Under IFRS and under GAAP, current assets are listed in

For accounting purposes, business transactions should be kept separate from the personal transactions of the stockholders of the business.

K2 Corporation has assets of $2,400,000, common stock of $624,000, and retained earnings of $380,000. What are the creditors' claims on their assets?

Kingery Corporation has current assets of $1,800,000 and current liabilities of $750,000. If they pay $250,000 of their accounts payable what will their new current ratio be?

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 and Acquisitions in Accounting

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