Exam 1: Accounting As a Form of Communication

Relevant information can be quantitative or qualitative. In deciding whether to go to college part-time or full-time, which of the following is a qualitative factor for a student?

Which statement summarizes the income earned and the dividends paid?

Which one of the following is least likely to be a user of financial information of a grocery store?

Business entities and non-business entities are both organized to earn a profit.

A bank loaned $62 million to Apex Corporation to finance the construction of a new distribution warehouse. In which section of Apex's statement of cash flows would you be able to determine whether the company repaid any portion of the debt during the year?

The 2015 income statement of Cigmar Enterprises shows operating revenues of $120,500, selling expenses of $35,200, general and administrative expenses of $29,900, interest expense of $1,500, and income tax expense of $10,520. Cigmar'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, 2015. Required: Compute Cigmar's profit margin. What other information would you need in order to comment on whether this ratio is favorable?

Provided below is a list of important users of accounting information. Below the list are descriptions of a major need of each of the various users. Fill in the blank with the one user group that is most likely to have the need described to the right of the blank. Some user groups may be used more than once or not at all. -The company's profitability since the last work force contract was signed.

Coglin, Inc. incurred a net loss of $20,000 for 2014. The balance sheet at December 31, 2014, for Coglin, Inc., includes the following items: A Determine Coglin's current ratio and working capital. B Beyond the information provided in your answers to "A," what does the composition of Coglin's current assets tell you about its liquidity. C What other information would one need to fully access Coglin's liquidity?

Match the following characteristics with the statements about each qualitative characteristic's importance. -Accounting information should use the least optimistic estimate.

Which financial statement would you refer to in order to determine whether a company owed funds to creditors?

The IASB is a branch of the FASB.

Several items from the financial statements of Standard Tires are listed below. Use the following answer choices to identify the type of account for each item listed. Place your answers in the space provided. -Long-term debt

The lack of a common depreciation method makes it impossible to compare the performance companies using different methods.

The second step in the ethical decision-making model is to:

All of the following are examples of retailers except:

The following information is taken from Harvey Company's balance sheet at December 31, 2014: Required: Using the information provided for Harvey Company, answer the following questions: A How much did creditors provide to Harvey Company? B On which financial statement would an investor look to see if any stock was issued during the year?

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

Read the information about Crystal, Inc. Which item is most "liquid"? Why is liquidity important?

How is the balance sheet linked to the other financial statements?

In the stockholders' equity section of a classified balance sheet, a distinction is made between amounts invested by owners and amounts accumulated from business earnings.