Question 1

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 2

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 3

The Dobson Company gathered the following condensed data for the year ended December 31, 2014:   Instructions
Prepare an income statement for the year ended December 31, 2014.

Accepted Answer

The answer of The Dobson Company gathered the following condensed...

Question 4

The monetary unit assumption has led to an increase in the notes to financial statements.

Accepted Answer

A) True 
 B)False

Question 5

The periodicity assumption states that the business will remain in operation for the foreseeable future.

Accepted Answer

A) True 
 B)False

Question 6

Relevant accounting information

Accepted Answer

A)  is information that has been audited. 
B)  must be reported within the operating cycle or one year, whichever is longer. 
C)  has been objectively determined. 
D)  is information that is capable of making a difference in a business decision. 
A)  is information that has been audited. 
B)  must be reported within the operating cycle or one year, whichever is longer. 
C)  has been objectively determined. 
D)  is information that is capable of making a difference in a business decision.

Question 7

Long-term investments appear in the property, plant, and equipment section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 8

In 2014 Grider Corporation had cash receipts of $35,000 and cash disbursements of $20,000. Grider's ending cash balance at December 31, 2014 was $55,000. What was Grider's beginning cash balance?

Accepted Answer

A)  $40,000 
B)  $50,000 
C)  $75,000 
D)  $70,000 
A)  $40,000 
B)  $50,000 
C)  $75,000 
D)  $70,000

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

The periodicity assumption states

Accepted Answer

A)  the business will remain in operation for the foreseeable future. 
B)  the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared. 
C)  every economic entity can be separately identified and accounted for. 
D)  only those things that can be expressed in money are included in the accounting records. 
A)  the business will remain in operation for the foreseeable future. 
B)  the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared. 
C)  every economic entity can be separately identified and accounted for. 
D)  only those things that can be expressed in money are included in the accounting records.

Question 11

Stockholders' equity is divided into two parts: common stock and retained earnings.

Accepted Answer

A) True 
 B)False

Question 12

Working capital is calculated by taking

Accepted Answer

A)  current assets plus current liabilities. 
B)  current assets minus current liabilities. 
C)  current assets divided by current liabilities. 
D)  current assets times current liabilities. 
A)  current assets plus current liabilities. 
B)  current assets minus current liabilities. 
C)  current assets divided by current liabilities. 
D)  current assets times current liabilities.

Question 13

Profitability means having enough funds on hand to pay debts when they fall due.

Accepted Answer

A) True 
 B)False

Question 14

The following information is available for Bradshaw Corporation and Newell Corporation:   Based on this information, the earnings per share calculations (rounded to two decimals) suggest

Accepted Answer

A)  lower performance in 2013 than in 2014 for Bradshaw Corporation. 
B)  higher performance in 2014 than in 2013 for Bradshaw Corporation. 
C)  fewer earnings available to Bradshaw's common stockholders in 2014 than in 2013. 
D)  an increase in the average number of common shares outstanding between 2013 and 2014 for Bradshaw Corporation. 
A)  lower performance in 2013 than in 2014 for Bradshaw Corporation. 
B)  higher performance in 2014 than in 2013 for Bradshaw Corporation. 
C)  fewer earnings available to Bradshaw's common stockholders in 2014 than in 2013. 
D)  an increase in the average number of common shares outstanding between 2013 and 2014 for Bradshaw Corporation.

Question 15

Garrison Company prepares quarterly reports, which it distributes to all stockholders and other entities that rely on its accounting information. Which of the following is the best term for the key assumption in financial reporting that Garrison is following?

Accepted Answer

A)  Monetary unit assumption 
B)  Going concern assumption 
C)  Economic entity assumption 
D)  Periodicity assumption. 
A)  Monetary unit assumption 
B)  Going concern assumption 
C)  Economic entity assumption 
D)  Periodicity assumption.

Question 16

Materiality relates to whether an item is large enough to likely influence the decision of an investor or creditor.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not considered a measure of liquidity?

Accepted Answer

A)  Current ratio 
B)  Working capital 
C)  Debt to assets ratio 
D)  Each of these answer choices are liquidity measures 
A)  Current ratio 
B)  Working capital 
C)  Debt to assets ratio 
D)  Each of these answer choices are liquidity measures

Question 18

Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.

Accepted Answer

A) True 
 B)False

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 its cash dividends are less than its cash provided by operations. 
B)  This free cash flow indicates that Morris is in good shape to repay its long-term obligations when they come due. 
C)  This free cash flow indicates that Morris presents good cash generating ability to retire stock. 
D)  Morris' cash provided by operations is less than its cash dividends plus capital expenditures. 
A)  Morris' capital expenditures plus its cash dividends are less than its cash provided by operations. 
B)  This free cash flow indicates that Morris is in good shape to repay its long-term obligations when they come due. 
C)  This free cash flow indicates that Morris presents good cash generating ability to retire stock. 
D)  Morris' cash provided by operations is less than its cash dividends plus capital expenditures.

Question 20

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

Accepted Answer

A)  $195,000 
B)  $125,000 
C)  $285,000 
D)  $165,000 
A)  $195,000 
B)  $125,000 
C)  $285,000 
D)  $165,000

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

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

The Dobson Company gathered the following condensed data for the year ended December 31, 2014: Instructions Prepare an income statement for the year ended December 31, 2014.

The monetary unit assumption has led to an increase in the notes to financial statements.

The periodicity assumption states that the business will remain in operation for the foreseeable future.

Relevant accounting information

Long-term investments appear in the property, plant, and equipment section of the balance sheet.

In 2014 Grider Corporation had cash receipts of $35,000 and cash disbursements of $20,000. Grider's ending cash balance at December 31, 2014 was $55,000. What was Grider's beginning cash balance?

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

The periodicity assumption states

Stockholders' equity is divided into two parts: common stock and retained earnings.

Working capital is calculated by taking

Profitability means having enough funds on hand to pay debts when they fall due.

The following information is available for Bradshaw Corporation and Newell Corporation: Based on this information, the earnings per share calculations (rounded to two decimals) suggest

Garrison Company prepares quarterly reports, which it distributes to all stockholders and other entities that rely on its accounting information. Which of the following is the best term for the key assumption in financial reporting that Garrison is following?

Materiality relates to whether an item is large enough to likely influence the decision of an investor or creditor.

Which of the following is not considered a measure of liquidity?

Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.

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

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

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

Exam 2: A Further Look at Financial Statements

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

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

The Dobson Company gathered the following condensed data for the year ended December 31, 2014: Instructions Prepare an income statement for the year ended December 31, 2014.

The monetary unit assumption has led to an increase in the notes to financial statements.

The periodicity assumption states that the business will remain in operation for the foreseeable future.

Relevant accounting information

Long-term investments appear in the property, plant, and equipment section of the balance sheet.

In 2014 Grider Corporation had cash receipts of $35,000 and cash disbursements of $20,000. Grider's ending cash balance at December 31, 2014 was $55,000. What was Grider's beginning cash balance?

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

The periodicity assumption states

Stockholders' equity is divided into two parts: common stock and retained earnings.

Working capital is calculated by taking

Profitability means having enough funds on hand to pay debts when they fall due.

The following information is available for Bradshaw Corporation and Newell Corporation: Based on this information, the earnings per share calculations (rounded to two decimals) suggest

Garrison Company prepares quarterly reports, which it distributes to all stockholders and other entities that rely on its accounting information. Which of the following is the best term for the key assumption in financial reporting that Garrison is following?

Materiality relates to whether an item is large enough to likely influence the decision of an investor or creditor.

Which of the following is not considered a measure of liquidity?

Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.

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

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

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