Exam 16: Basic Accounting Concepts, Techniques, and Conventions

Net income divided by the average number of common shares outstanding during the year

Kidman Company's income statement showed rent expense of $16,000. The beginning and ending balances in the Prepaid Rent account were $5,000 and $3,000, respectively. Cash paid for rent was:

Retained earnings reflect the dividend paying ability of a company.

Preferred stock normally confers voting power to its owners.

During a period of deflation, the LIFO method provides a lower ending inventory amount than does FIFO.

They contain explanations for the summary figures that appear in the main financial statements

A statement that reports the cash receipts and cash payments of an organization during a particular period

Allocating the original cost of natural resources

The value that is printed on the face of the stock certificate

would result in an increase in income under the cash basis but not an increase in income under the accrual basis.

An inventory method that assumes a company sells or consumes the goods acquired earliest before any else

Intangible assets are amortized.

Depreciation method that allocates cost based on the amount of production rather than the passage of time

An income statement that merely lists all expenses without drawing subtotals

A company's operating cycle can be longer than one year.

Par value is the value that is printed on the face of the stock certificate.

The following selected information is available for Koppel Company for 20X6: Additional paid-in capital, common \6 90,000 Common stock, \ 5 par value, 430,000 shares authorixed, 30,000 sh ares outstanding 150,000 Dividends payable 415,000 Long-term investment in J ac ob s Comp any 1,400,000 M arketable securities 610,000 Retained earnings 842,000 Treasury stock, common (8,000 shares) 176,000 Required: Given the above information, prepare the stockholders' equity section of Koppel Company's balance sheet.

An example of an operating activity on the statement of cash flows is cash dividends received.

Amounts owed to suppliers who extend credit for purchases on open account

Accelerated depreciation is the most popular depreciation method for financial statement purposes.