Question 1

Which of the following events will cause a company's current ratio to increase?

Accepted Answer

A)  The collection of an account receivable. 
B)  Selling land for cash at a loss. 
C)  The discharge of an account payable by signing a short-term note payable. 
D)  Paying off a long-term loan. 
A)  The collection of an account receivable. 
B)  Selling land for cash at a loss. 
C)  The discharge of an account payable by signing a short-term note payable. 
D)  Paying off a long-term loan.

Question 2

From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Borrowed cash using a six-month note

Accepted Answer

A) Working capital will increase 
B) Working capital will decrease 
C) Working capital will not change 
A) Working capital will increase 
B) Working capital will decrease 
C) Working capital will not change

Question 3

Match the following characteristics with the statements about each qualitative characteristic's importance.
-Users must be able to compare accounting information of a firm with its prior year information.

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 4

Hopper, Inc.
Use the information from Hopper Inc. to answer the following questions.
  
-Read the information about Hopper, Inc. Which of the following statements is the best answer regarding the company's profit margin?

Accepted Answer

A)  The profit margin was 15.8% in 2014. 
B)  The profit margin was 15.8% in 2013. 
C)  The profit margin was 31.5% in 2014. 
D)  The profit margin was 31.5% in 2013. 
A)  The profit margin was 15.8% in 2014. 
B)  The profit margin was 15.8% in 2013. 
C)  The profit margin was 31.5% in 2014. 
D)  The profit margin was 31.5% in 2013.

Question 5

Read the information about Eagle Corporation.
Required::
How much is net income for the year ended December 31, 2014? If Eagle Corporation had used a single-step statement, by how much would net income be different? Explain.

Accepted Answer

Net Income = $290,000
$2,300,000 Service

Question 6

Comparative income statements for Gregson Inc. are as follows:
   Required
The president and management believe that the company performed better in 2014 than it did in 2013. Write the president's letter to be included in the 2014 annual report. Explain why the company is financially sound and why shareholders should not be alarmed by the $120,000 loss in a year when gross profit increased significantly.

Accepted Answer

Letter from the President to Stockholder

Question 7

From the following list, select the proper section from the statement of cash flows in which it would be classified.
-Purchased equipment for cash

Accepted Answer

A) Operating Activities 
B) Investing Activities 
C) Financing Activities 
A) Operating Activities 
B) Investing Activities 
C) Financing Activities

Question 8

Which financial statement reports information helpful in assessing working capital?

Accepted Answer

A)  Income statement 
B)  Balance sheet 
C)  Statement of retained earnings 
D)  Statement of cash flows 
A)  Income statement 
B)  Balance sheet 
C)  Statement of retained earnings 
D)  Statement of cash flows

Question 9

From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Purchased land for cash

Accepted Answer

A) Working capital will increase 
B) Working capital will decrease 
C) Working capital will not change 
A) Working capital will increase 
B) Working capital will decrease 
C) Working capital will not change

Question 10

is a liquidity measure that is calculated by subtracting current assets from current liabilities.

Accepted Answer

The answer of is a liquidity measure that is calculated...

Question 11

In preparing financial statements, accountants should consider all of the following except:

Accepted Answer

A)  the objectives of financial reporting. 
B)  the characteristics that make accounting information useful. 
C)  the most useful way to display the information found on the financial statements. 
D)  the presentation of the value of a company. 
A)  the objectives of financial reporting. 
B)  the characteristics that make accounting information useful. 
C)  the most useful way to display the information found on the financial statements. 
D)  the presentation of the value of a company.

Question 12

Webb Company
Selected data from the accounting records of Webb Company are listed below:
  
-Read the information about Webb Company. What is Webb's income from operations?

Accepted Answer

A)  $1,600 
B)  $2,000 
C)  $2,200 
D)  $2,800 
A)  $1,600 
B)  $2,000 
C)  $2,200 
D)  $2,800

Question 13

For each item listed, select the section of the balance sheet in which the item would be reported.
-Computer used within the business

Accepted Answer

A) Current Assets 
B) Property. Plant, and Equipment 
C) Current Liabilities 
D) Long-term Liabilities 
E) Stockholders' Equity 
A) Current Assets 
B) Property. Plant, and Equipment 
C) Current Liabilities 
D) Long-term Liabilities 
E) Stockholders' Equity

Question 14

From the following list, select the proper section from the statement of cash flows in which it would be classified.
-Received cash from bond issuance

Accepted Answer

A) Operating Activities 
B) Investing Activities 
C) Financing Activities 
A) Operating Activities 
B) Investing Activities 
C) Financing Activities

Question 15

Deal Mart
The 2014 income statement of Deal Mart shows operating revenues of $130,800, selling expenses of $37,100, general and administrative expenses of $34,900, interest expense of $900, and income tax expense of $11,430. Deal Mart's stockholders' equity was $280,000 at the beginning of the year and $320,000 at the end of the year. The company has 20,000 shares of stock outstanding at December 31, 2014.
-Read the information about Deal Mart. What is Deal Mart's profit margin to the closest tenth of a percent?

Accepted Answer

A)  2.8 
B)  35.5 
C)  61.2 
D)  14.5 
A)  2.8 
B)  35.5 
C)  61.2 
D)  14.5

Question 16

Three common categories of long-term assets are: 1 property, plant, and equipment, 2 investments, and 3 intangibles.

Accepted Answer

A) True 
 B)False

Question 17

Read the information about Fellsmere Corporation.
Required:
A Explain the change in Fellsmere's working capital from 2013 to 2014. Why do users believe the current ratio
provides more information than the dollar amount of working capital? Explain.
B Fellsmere Corporation's creditors need to know whether its working capital position improved during the year. How would you evaluate this?

Accepted Answer

A Working Capital, 2013 = $1,540,777
$2,

Question 18

Ginger Company claims its financial information is useful. What two qualities must be present in order to have "useful" accounting information? Explain these two qualities.

Accepted Answer

To be useful, accounting information mus

Question 19

An independent auditor's CPA's report is a guarantee that the financial statements are free from fraud or material error.

Accepted Answer

A) True 
 B)False

Question 20

A company is not required to prepare both an:

Accepted Answer

A)  income statement and statement of stockholders' equity. 
B)  income statement and statement of retained earnings. 
C)  statement of stockholders' equity and statement of retained earnings. 
D)  statement of cash flows and statement of retained earnings. 
A)  income statement and statement of stockholders' equity. 
B)  income statement and statement of retained earnings. 
C)  statement of stockholders' equity and statement of retained earnings. 
D)  statement of cash flows and statement of retained earnings.

Which of the following events will cause a company's current ratio to increase?

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Borrowed cash using a six-month note

Match the following characteristics with the statements about each qualitative characteristic's importance. -Users must be able to compare accounting information of a firm with its prior year information.

Hopper, Inc. Use the information from Hopper Inc. to answer the following questions. -Read the information about Hopper, Inc. Which of the following statements is the best answer regarding the company's profit margin?

Read the information about Eagle Corporation. Required:: How much is net income for the year ended December 31, 2014? If Eagle Corporation had used a single-step statement, by how much would net income be different? Explain.

From the following list, select the proper section from the statement of cash flows in which it would be classified. -Purchased equipment for cash

Which financial statement reports information helpful in assessing working capital?

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Purchased land for cash

is a liquidity measure that is calculated by subtracting current assets from current liabilities.

In preparing financial statements, accountants should consider all of the following except:

Webb Company Selected data from the accounting records of Webb Company are listed below: -Read the information about Webb Company. What is Webb's income from operations?

For each item listed, select the section of the balance sheet in which the item would be reported. -Computer used within the business

From the following list, select the proper section from the statement of cash flows in which it would be classified. -Received cash from bond issuance

Three common categories of long-term assets are: 1 property, plant, and equipment, 2 investments, and 3 intangibles.

Ginger Company claims its financial information is useful. What two qualities must be present in order to have "useful" accounting information? Explain these two qualities.

An independent auditor's CPA's report is a guarantee that the financial statements are free from fraud or material error.

A company is not required to prepare both an:

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

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Exam 2: Financial Statements and the Annual Report

Which of the following events will cause a company's current ratio to increase?

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Borrowed cash using a six-month note

Match the following characteristics with the statements about each qualitative characteristic's importance. -Users must be able to compare accounting information of a firm with its prior year information.

Hopper, Inc. Use the information from Hopper Inc. to answer the following questions. -Read the information about Hopper, Inc. Which of the following statements is the best answer regarding the company's profit margin?

Read the information about Eagle Corporation. Required:: How much is net income for the year ended December 31, 2014? If Eagle Corporation had used a single-step statement, by how much would net income be different? Explain.

From the following list, select the proper section from the statement of cash flows in which it would be classified. -Purchased equipment for cash

Which financial statement reports information helpful in assessing working capital?

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Purchased land for cash

is a liquidity measure that is calculated by subtracting current assets from current liabilities.

In preparing financial statements, accountants should consider all of the following except:

Webb Company Selected data from the accounting records of Webb Company are listed below: -Read the information about Webb Company. What is Webb's income from operations?

For each item listed, select the section of the balance sheet in which the item would be reported. -Computer used within the business

From the following list, select the proper section from the statement of cash flows in which it would be classified. -Received cash from bond issuance

Three common categories of long-term assets are: 1 property, plant, and equipment, 2 investments, and 3 intangibles.

Ginger Company claims its financial information is useful. What two qualities must be present in order to have "useful" accounting information? Explain these two qualities.

An independent auditor's CPA's report is a guarantee that the financial statements are free from fraud or material error.

A company is not required to prepare both an:

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