Question 1

The periodicity assumption states that every economic entity can be separately identified and accounted for.

Accepted Answer

A) True 
 B)False  False

Question 2

At December 31, 2014 Lowery Company had retained earnings of $2,384,000. During 2014 they issued stock for $98,000, and paid dividends of $34,000. Net income for 2014 was $402,000. The retained earnings balance at the beginning of 2014 was

Accepted Answer

A)  $2,752,000. 
B)  $2,016,000. 
C)  $2,114,000. 
D)  $2,654,000. 
A)  $2,752,000. 
B)  $2,016,000. 
C)  $2,114,000. 
D)  $2,654,000. B

Question 3

If accounting information has relevance, it is useful in making predictions about

Accepted Answer

A)  future IRS audits. 
B)  new accounting principles. 
C)  foreign currency exchange rates. 
D)  the future events of a company. 
A)  future IRS audits. 
B)  new accounting principles. 
C)  foreign currency exchange rates. 
D)  the future events of a company. D

Question 4

The chief financial officer (CFO) of SuperClean Corporation requested that the accounting department prepare a preliminary balance sheet on December 30, 2014, so that the CFO could get an idea of how the company stood. He knows that certain debt agreements with its creditors require the company to maintain a current ration of at least 2:1. The preliminary balance sheet is as follows.   Instructions
(a) Calculate the current ratio and working capital based on the preliminary balance sheet.
(b) Based in the results in (a), the CFO requested that $20,000 of cash be used to pay off the balance of the accounts payable account on December 31, 2014. Calculate the new current ratio and working capital after the company takes these actions.

Accepted Answer

The answer of The chief financial officer (CFO) of SuperClean...

Question 5

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 6

Give the definition of current assets, current liabilities and the current ratio.

Accepted Answer

Current assets are cash or other resourc

Question 7

The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records.

Accepted Answer

A) True 
 B)False

Question 8

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 9

The going concern assumption assumes that the business

Accepted Answer

A)  will be liquidated in the near future. 
B)  will be purchased by another business. 
C)  is in a growth industry. 
D)  will remain in operation for the foreseeable future. 
A)  will be liquidated in the near future. 
B)  will be purchased by another business. 
C)  is in a growth industry. 
D)  will remain in operation for the foreseeable future.

Question 10

Mitchell Corporation has current assets of $1,600,000 and current liabilities of $750,000. If they issue $100,000 of new stock what will their new current ratio be? (rounded)

Accepted Answer

A)  2.27:1 
B)  2.04:1 
C)  1.88:1 
D)  2.13:1 
A)  2.27:1 
B)  2.04:1 
C)  1.88:1 
D)  2.13:1

Question 11

Which one of the following is not an enhancing quality of useful information?

Accepted Answer

A)  Timeliness 
B)  Understandability 
C)  Materiality 
D)  Comparability 
A)  Timeliness 
B)  Understandability 
C)  Materiality 
D)  Comparability

Question 12

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 13

N3 Corporation has assets of $3,000,000, common stock of $780,000, and retained earnings of $475,000. What are the creditors' claims on their assets?

Accepted Answer

A)  $2,695,000 
B)  $1,255,000 
C)  $1,745,000 
D)  $3,305,000 
A)  $2,695,000 
B)  $1,255,000 
C)  $1,745,000 
D)  $3,305,000

Question 14

If a building is offered for sale at $100,000 and the buyer pays $95,000 cash for it, the buyer would record the building at $100,000.

Accepted Answer

A) True 
 B)False

Question 15

A major function of management is to provide the accountant with relevant and useful information.

Accepted Answer

A) True 
 B)False

Question 16

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

Question 17

Based on the following data, what is the amount of current assets?

Accepted Answer

A)  $212,000 
B)  $370,000 
C)  $232,000 
D)  $230,000 
A)  $212,000 
B)  $370,000 
C)  $232,000 
D)  $230,000

Question 18

The use of fair value to report assets

Accepted Answer

A)  is not allowed under GAAP or IFRS. 
B)  is required by GAAP and IFRS. 
C)  is increasing under GAAP and IFRS, but GAAP has adopted it more broadly. 
D)  is increasing under GAAP and IFRS, but IFRS has adopted it more broadly. 
A)  is not allowed under GAAP or IFRS. 
B)  is required by GAAP and IFRS. 
C)  is increasing under GAAP and IFRS, but GAAP has adopted it more broadly. 
D)  is increasing under GAAP and IFRS, but IFRS has adopted it more broadly.

Question 19

An intangible asset

Accepted Answer

A)  derives its value from the rights and privileges it provides the owner. 
B)  is worthless because it has no physical substance. 
C)  is converted into a tangible asset during the operating cycle. 
D)  cannot be classified on the balance sheet because it lacks physical substance. 
A)  derives its value from the rights and privileges it provides the owner. 
B)  is worthless because it has no physical substance. 
C)  is converted into a tangible asset during the operating cycle. 
D)  cannot be classified on the balance sheet because it lacks physical substance.

Question 20

Most companies use a retained earnings statement rather than a statement of stockholders' equity.

Accepted Answer

A) True 
 B)False

The periodicity assumption states that every economic entity can be separately identified and accounted for.

At December 31, 2014 Lowery Company had retained earnings of $2,384,000. During 2014 they issued stock for $98,000, and paid dividends of $34,000. Net income for 2014 was $402,000. The retained earnings balance at the beginning of 2014 was

If accounting information has relevance, it is useful in making predictions about

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

Give the definition of current assets, current liabilities and the current ratio.

The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records.

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).

The going concern assumption assumes that the business

Mitchell Corporation has current assets of $1,600,000 and current liabilities of $750,000. If they issue $100,000 of new stock what will their new current ratio be? (rounded)

Which one of the following is not an enhancing quality of useful information?

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

N3 Corporation has assets of $3,000,000, common stock of $780,000, and retained earnings of $475,000. What are the creditors' claims on their assets?

If a building is offered for sale at $100,000 and the buyer pays $95,000 cash for it, the buyer would record the building at $100,000.

A major function of management is to provide the accountant with relevant and useful information.

Which of the following is not a current liability?

Based on the following data, what is the amount of current assets?

The use of fair value to report assets

An intangible asset

Most companies use a retained earnings statement rather than a statement of stockholders' equity.

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

Time Value of Money

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Exam 2: A Further Look at Financial Statements

The periodicity assumption states that every economic entity can be separately identified and accounted for.

At December 31, 2014 Lowery Company had retained earnings of $2,384,000. During 2014 they issued stock for $98,000, and paid dividends of $34,000. Net income for 2014 was $402,000. The retained earnings balance at the beginning of 2014 was

If accounting information has relevance, it is useful in making predictions about

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

Give the definition of current assets, current liabilities and the current ratio.

The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records.

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).

The going concern assumption assumes that the business

Mitchell Corporation has current assets of $1,600,000 and current liabilities of $750,000. If they issue $100,000 of new stock what will their new current ratio be? (rounded)

Which one of the following is not an enhancing quality of useful information?

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

N3 Corporation has assets of $3,000,000, common stock of $780,000, and retained earnings of $475,000. What are the creditors' claims on their assets?

If a building is offered for sale at $100,000 and the buyer pays $95,000 cash for it, the buyer would record the building at $100,000.

A major function of management is to provide the accountant with relevant and useful information.

Which of the following is not a current liability?

Based on the following data, what is the amount of current assets?

The use of fair value to report assets

An intangible asset

Most companies use a retained earnings statement rather than a statement of stockholders' equity.

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

Time Value of Money

Filters