Question 1

Which one of the following is not a major category for long-term assets?

Accepted Answer

A)  Intangibles 
B)  Property, plant, and equipment 
C)  Receivables 
D)  Goodwill 
A)  Intangibles 
B)  Property, plant, and equipment 
C)  Receivables 
D)  Goodwill

Question 2

Match the following characteristics with the statements about each qualitative characteristic's importance.
-Accounting information must be verifiable and faithfully represent actual transactions.

Accepted Answer

A) Consistency 
B) Materiality 
C) Conservatism 
D) Comparability 
E) Reliability
F)Relevance
G)Understandability 
A) Consistency 
B) Materiality 
C) Conservatism 
D) Comparability 
E) Reliability
F)Relevance
G)Understandability

Question 3

How are assets which are expected to be realized in cash, sold, or consumed within the normal operating cycle of a business or within one year if the operating cycle is shorter than one year reported on a classified balance sheet?

Accepted Answer

A)  Property, plant, and equipment 
B)  Current assets 
C)  Intangible assets 
D)  Current liabilities 
A)  Property, plant, and equipment 
B)  Current assets 
C)  Intangible assets 
D)  Current liabilities

Question 4

An objective of financial reporting is to reflect economic information concerning a company's cash flows.

Accepted Answer

A) True 
 B)False

Question 5

Guinther & Sons, Inc.
Guinther & Sons, Inc. a retailer of men's clothing earned a net profit of $77,000 for 2014. The balance sheet for
Guinther & Sons includes the following items:
  
-Read the information for Guinther & Sons, Inc. The average current ratio for stores such as Guinther & Sons is 2.4 to 1. What does this comparison tell you about its liquidity?

Accepted Answer

A)  It is more liquid than its competitors 
B)  It has more long-term assets than its competitors 
C)  Since a rule of thumb for current ratios is 2 to 1, neither Guinther & Sons, Inc. nor its competitors is liquid. 
D)  Guinther & Sons, Inc. is more profitable than its competitors. 
A)  It is more liquid than its competitors 
B)  It has more long-term assets than its competitors 
C)  Since a rule of thumb for current ratios is 2 to 1, neither Guinther & Sons, Inc. nor its competitors is liquid. 
D)  Guinther & Sons, Inc. is more profitable than its competitors.

Question 6

Read the information about Cargo Corporation.
Required:
Calculate the amount of working capital at December 31, 2015 for Cargo Corp. What can you learn from the current ratio that you cannot learn from the amount of working capital?

Accepted Answer

Current Assets = $85,000
$11,000 Cash +

Question 7

Materiality deals with the size of an error in accounting information.

Accepted Answer

A) True 
 B)False

Question 8

What is the difference between comparability and consistency?

Accepted Answer

Comparability allows comparisons to be m

Question 9

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Land

Accepted Answer

A) Current Assets balance sheet 
B) Property, Plant, & Equipment balance sheet 
C) Current Liabilities balance sheet 
D) Long-term Liabilities balance sheet 
E) Stockholders' Equity balance sheet
F)Operating Revenue income statement
G)Operating Expenses income statement
H)Other Revenue & Expenses income statement
I)Income Taxes income statement 
A) Current Assets balance sheet 
B) Property, Plant, & Equipment balance sheet 
C) Current Liabilities balance sheet 
D) Long-term Liabilities balance sheet 
E) Stockholders' Equity balance sheet
F)Operating Revenue income statement
G)Operating Expenses income statement
H)Other Revenue & Expenses income statement
I)Income Taxes income statement

Question 10

Which of the following is the best description of the purpose of financial reporting?

Accepted Answer

A)  To allow users to access to the daily detailed records of a business. 
B)  To help the users reach their decisions in an informed manner. 
C)  To provide users with an assessment of how long the company will continue as a going concern. 
D)  To allow users access to a list of all the individuals who owe the company money. 
A)  To allow users to access to the daily detailed records of a business. 
B)  To help the users reach their decisions in an informed manner. 
C)  To provide users with an assessment of how long the company will continue as a going concern. 
D)  To allow users access to a list of all the individuals who owe the company money.

Question 11

Which of the following would not be considered to be an intangible asset?

Accepted Answer

A)  Franchises 
B)  Copyrights 
C)  Investments 
D)  Goodwill 
A)  Franchises 
B)  Copyrights 
C)  Investments 
D)  Goodwill

Question 12

Dividends declared and paid reduce a company's retained earnings balance.

Accepted Answer

A) True 
 B)False

Question 13

Which one of the following sections is least likely to be found in a corporate annual report?

Accepted Answer

A)  Notes to the Financial Statements 
B)  Forecasts of Cash Flows and Earnings 
C)  Report of the Independent Accountants 
D)  Management's Discussion and Analysis 
A)  Notes to the Financial Statements 
B)  Forecasts of Cash Flows and Earnings 
C)  Report of the Independent Accountants 
D)  Management's Discussion and Analysis

Question 14

is the magnitude of an omission or misstatement in accounting information that will affect the judgment of someone relying on the information.

Accepted Answer

The answer of is the magnitude of an omission or...

Question 15

Button Transportation purchases many pieces of office furniture with an individual cost below $200 each. Button chooses to account for these expenditures as expenses when acquired rather than reporting them as property, plant, and equipment on its balance sheet. The company's accountant and independent CPA agree that no accounting principle has been violated. What accounting justification allows Button to expense the furniture?

Accepted Answer

A)  Conservatism 
B)  Matching 
C)  Materiality 
D)  Verifiability 
A)  Conservatism 
B)  Matching 
C)  Materiality 
D)  Verifiability

Question 16

Current assets, other than cash, are expected to be sold or consumed are during a company's normal operating cycle.

Accepted Answer

A) True 
 B)False

Question 17

Which one of the following is an operating activity of a business?

Accepted Answer

A)  Paying for purchases of inventory 
B)  Issuing stock for cash 
C)  Borrowing money from a bank 
D)  Purchasing a manufacturing plant. 
A)  Paying for purchases of inventory 
B)  Issuing stock for cash 
C)  Borrowing money from a bank 
D)  Purchasing a manufacturing plant.

Question 18

Read the information about Fasoli, Inc.
Required:
Compute Fasoli's current ratio. On the basis of your answer, does Fasoli appear to be liquid? What other
information do you need to fully answer that question?

Accepted Answer

Current Ratio = Current Assets/Current L

Question 19

Read the information about Eagle Corporation.
Required:
Compare the profit margins for 2014 and 2013. Is the company becoming more or less profitable or staying the same? What could be contributing to this?

Accepted Answer

Profit Margin for 2014 = 12.61%
$290,000

Question 20

Which statement is true concerning gains and losses?

Accepted Answer

A)  Gains and losses are reported on the balance sheet in the Assets and Liabilities sections, respectively. 
B)  Gains and losses are special types of revenues and expenses that are reported on the income statement. 
C)  The amounts of gains and losses are included in the calculation of the current ratio, in the numerator and denominator, respectively. 
D)  Gains and losses are reported only on a multi-step income statement. 
A)  Gains and losses are reported on the balance sheet in the Assets and Liabilities sections, respectively. 
B)  Gains and losses are special types of revenues and expenses that are reported on the income statement. 
C)  The amounts of gains and losses are included in the calculation of the current ratio, in the numerator and denominator, respectively. 
D)  Gains and losses are reported only on a multi-step income statement.

Which one of the following is not a major category for long-term assets?

Match the following characteristics with the statements about each qualitative characteristic's importance. -Accounting information must be verifiable and faithfully represent actual transactions.

How are assets which are expected to be realized in cash, sold, or consumed within the normal operating cycle of a business or within one year if the operating cycle is shorter than one year reported on a classified balance sheet?

An objective of financial reporting is to reflect economic information concerning a company's cash flows.

Read the information about Cargo Corporation. Required: Calculate the amount of working capital at December 31, 2015 for Cargo Corp. What can you learn from the current ratio that you cannot learn from the amount of working capital?

Materiality deals with the size of an error in accounting information.

What is the difference between comparability and consistency?

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Land

Which of the following is the best description of the purpose of financial reporting?

Which of the following would not be considered to be an intangible asset?

Dividends declared and paid reduce a company's retained earnings balance.

Which one of the following sections is least likely to be found in a corporate annual report?

is the magnitude of an omission or misstatement in accounting information that will affect the judgment of someone relying on the information.

Current assets, other than cash, are expected to be sold or consumed are during a company's normal operating cycle.

Which one of the following is an operating activity of a business?

Read the information about Fasoli, Inc. Required: Compute Fasoli's current ratio. On the basis of your answer, does Fasoli appear to be liquid? What other information do you need to fully answer that question?

Read the information about Eagle Corporation. Required: Compare the profit margins for 2014 and 2013. Is the company becoming more or less profitable or staying the same? What could be contributing to this?

Which statement is true concerning gains and losses?

Accounting As a Form of Communication

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

Filters

Exam 2: Financial Statements and the Annual Report

Which one of the following is not a major category for long-term assets?

Match the following characteristics with the statements about each qualitative characteristic's importance. -Accounting information must be verifiable and faithfully represent actual transactions.

How are assets which are expected to be realized in cash, sold, or consumed within the normal operating cycle of a business or within one year if the operating cycle is shorter than one year reported on a classified balance sheet?

An objective of financial reporting is to reflect economic information concerning a company's cash flows.

Read the information about Cargo Corporation. Required: Calculate the amount of working capital at December 31, 2015 for Cargo Corp. What can you learn from the current ratio that you cannot learn from the amount of working capital?

Materiality deals with the size of an error in accounting information.

What is the difference between comparability and consistency?

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Land

Which of the following is the best description of the purpose of financial reporting?

Which of the following would not be considered to be an intangible asset?

Dividends declared and paid reduce a company's retained earnings balance.

Which one of the following sections is least likely to be found in a corporate annual report?

is the magnitude of an omission or misstatement in accounting information that will affect the judgment of someone relying on the information.

Current assets, other than cash, are expected to be sold or consumed are during a company's normal operating cycle.

Which one of the following is an operating activity of a business?

Read the information about Fasoli, Inc. Required: Compute Fasoli's current ratio. On the basis of your answer, does Fasoli appear to be liquid? What other information do you need to fully answer that question?

Read the information about Eagle Corporation. Required: Compare the profit margins for 2014 and 2013. Is the company becoming more or less profitable or staying the same? What could be contributing to this?

Which statement is true concerning gains and losses?

Accounting As a Form of Communication

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

Filters