Question 1

The preparation of financial statements requires that the information be understandable:

Accepted Answer

A)  only to CPAs. 
B)  to those willing to spend the time to understand it. 
C)  only to those who take an accounting course. 
D)  only to financial analysts and brokers. 
A)  only to CPAs. 
B)  to those willing to spend the time to understand it. 
C)  only to those who take an accounting course. 
D)  only to financial analysts and brokers.

Question 2

Peterson Corporation's partial income statement is as follows:
   Determine the profit margin. Would you invest in Peterson Corporation? Explain your answer.

Accepted Answer

Profit margin:
Net Income/Sales = $640,0

Question 3

Accountants are the main reason financial statements are prepared.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following items will be found in a corporate annual report?

Accepted Answer

A)  Company budgets 
B)  Notes to the financial statements 
C)  Selected financial data from competitor companies 
D)  Management's statement that the auditors are responsible for the financial statements. 
A)  Company budgets 
B)  Notes to the financial statements 
C)  Selected financial data from competitor companies 
D)  Management's statement that the auditors are responsible for the financial statements.

Question 5

Hammar Corporation's partial income statement is as follows:
   Determine the profit margin. Would you invest in Hammar Corporation? Explain your answer.

Accepted Answer

Profit margin:
Net Income/Sales = $1,228

Question 6

is the quality of accounting information that allows a user to compare two or more accounting periods for a single company.

Accepted Answer

The answer of is the quality of accounting information that...

Question 7

From the following list, select the proper section from the statement of cash flows in which it would be classified.
-Sold equipment no longer used in the business

Accepted Answer

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

Question 8

Which one of the following items is reported as a current asset on a classified balance sheet?

Accepted Answer

A)  Inventory 
B)  Accounts payable 
C)  Land 
D)  Common stock 
A)  Inventory 
B)  Accounts payable 
C)  Land 
D)  Common stock

Question 9

Bartlett Industries
Bartlett Industries began operations on January 2, 2015, with an investment of $50,000 by each of its two stockholders. Net income for its first year of business was $240,000. Bartlett Industries paid a total of $100,000 in dividends to its stockholders during the year.
-Read the information about Bartlett Industries. If the company's revenues were $500,000 for the year ended December 31, 2015, how much were total expenses?

Accepted Answer

A)  $160,000 
B)  $260,000 
C)  $640,000 
D)  $740,000 
A)  $160,000 
B)  $260,000 
C)  $640,000 
D)  $740,000

Question 10

The statement of cash flows, like the income statement, reports only operating activities of a company.

Accepted Answer

A) True 
 B)False

Question 11

A construction company that builds skyscrapers is likely to have an operating cycle longer than one year.

Accepted Answer

A) True 
 B)False

Question 12

The primary responsibility for the preparation and integrity of the financial statements in an annual report belongs to the company's independent accountants CPAs.

Accepted Answer

A) True 
 B)False

Question 13

Under current accounting principles, how is net income on the income statement measured?

Accepted Answer

A)  Net change in owners' equity during the period. 
B)  Excess of revenues over expenses during the period. 
C)  Net change in the cash balance during the period. 
D)  Excess of revenues over expenses less any dividends paid during the period. 
A)  Net change in owners' equity during the period. 
B)  Excess of revenues over expenses during the period. 
C)  Net change in the cash balance during the period. 
D)  Excess of revenues over expenses less any dividends paid during the period.

Question 14

An advantage of the current ratio is that it considers the makeup of the current assets.

Accepted Answer

A) True 
 B)False

Question 15

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

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 16

Which of the following statements is true concerning external users of financial information?

Accepted Answer

A)  External users need detailed records of the business to make informed decisions. 
B)  External users are primarily responsible for the preparation of financial statements. 
C)  External users rely on the financial statements to help make informed decisions. 
D)  External users rely on management to tell them whether the company is a good investment 
A)  External users need detailed records of the business to make informed decisions. 
B)  External users are primarily responsible for the preparation of financial statements. 
C)  External users rely on the financial statements to help make informed decisions. 
D)  External users rely on management to tell them whether the company is a good investment

Question 17

What is the operating cycle of a business? How does this impact the classification of assets into current and noncurrent categories?

Accepted Answer

The operating cycle depends on the natur

Question 18

Which of the following statements is true regarding the multiple-step income statement?

Accepted Answer

A)  The multiple-step income statement is used only by companies that sell products, not those that provide services. 
B)  The multiple-step income statement is helpful in determining a company's working capital. 
C)  The multiple-step income statement reports the same net income as the single-step income statement. 
D)  The multiple-step income statement is required under generally accepted accounting principles. 
A)  The multiple-step income statement is used only by companies that sell products, not those that provide services. 
B)  The multiple-step income statement is helpful in determining a company's working capital. 
C)  The multiple-step income statement reports the same net income as the single-step income statement. 
D)  The multiple-step income statement is required under generally accepted accounting principles.

Question 19

Match the following characteristics with the statements about each qualitative characteristic's importance.
-Those willing to spend the time should be provided with comprehensible accounting 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 20

In preparing the financial statements for December 31, 2015, an accountant improperly classified the payment of prepaid rent as rent expense. Which of the following amounts would not be affected by this improper classification?

Accepted Answer

A)  Retained earnings, January 1, 2015 
B)  Retained earnings, December 31, 2015 
C)  Net income 
D)  Total assets 
A)  Retained earnings, January 1, 2015 
B)  Retained earnings, December 31, 2015 
C)  Net income 
D)  Total assets

The preparation of financial statements requires that the information be understandable:

Peterson Corporation's partial income statement is as follows: Determine the profit margin. Would you invest in Peterson Corporation? Explain your answer.

Accountants are the main reason financial statements are prepared.

Which of the following items will be found in a corporate annual report?

Hammar Corporation's partial income statement is as follows: Determine the profit margin. Would you invest in Hammar Corporation? Explain your answer.

is the quality of accounting information that allows a user to compare two or more accounting periods for a single company.

From the following list, select the proper section from the statement of cash flows in which it would be classified. -Sold equipment no longer used in the business

Which one of the following items is reported as a current asset on a classified balance sheet?

The statement of cash flows, like the income statement, reports only operating activities of a company.

A construction company that builds skyscrapers is likely to have an operating cycle longer than one year.

The primary responsibility for the preparation and integrity of the financial statements in an annual report belongs to the company's independent accountants CPAs.

Under current accounting principles, how is net income on the income statement measured?

An advantage of the current ratio is that it considers the makeup of the current assets.

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

Which of the following statements is true concerning external users of financial information?

What is the operating cycle of a business? How does this impact the classification of assets into current and noncurrent categories?

Which of the following statements is true regarding the multiple-step income statement?

Match the following characteristics with the statements about each qualitative characteristic's importance. -Those willing to spend the time should be provided with comprehensible accounting information.

In preparing the financial statements for December 31, 2015, an accountant improperly classified the payment of prepaid rent as rent expense. Which of the following amounts would not be affected by this improper classification?

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

The preparation of financial statements requires that the information be understandable:

Peterson Corporation's partial income statement is as follows: Determine the profit margin. Would you invest in Peterson Corporation? Explain your answer.

Accountants are the main reason financial statements are prepared.

Which of the following items will be found in a corporate annual report?

Hammar Corporation's partial income statement is as follows: Determine the profit margin. Would you invest in Hammar Corporation? Explain your answer.

is the quality of accounting information that allows a user to compare two or more accounting periods for a single company.

From the following list, select the proper section from the statement of cash flows in which it would be classified. -Sold equipment no longer used in the business

Which one of the following items is reported as a current asset on a classified balance sheet?

The statement of cash flows, like the income statement, reports only operating activities of a company.

A construction company that builds skyscrapers is likely to have an operating cycle longer than one year.

The primary responsibility for the preparation and integrity of the financial statements in an annual report belongs to the company's independent accountants CPAs.

Under current accounting principles, how is net income on the income statement measured?

An advantage of the current ratio is that it considers the makeup of the current assets.

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

Which of the following statements is true concerning external users of financial information?

What is the operating cycle of a business? How does this impact the classification of assets into current and noncurrent categories?

Which of the following statements is true regarding the multiple-step income statement?

Match the following characteristics with the statements about each qualitative characteristic's importance. -Those willing to spend the time should be provided with comprehensible accounting information.

In preparing the financial statements for December 31, 2015, an accountant improperly classified the payment of prepaid rent as rent expense. Which of the following amounts would not be affected by this improper classification?

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