Exam 1: Accounting As a Form of Communication

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. -Income taxes payable

How is income from operations determined?

The primary objective of external auditors is to provide assurance to stockholders and other users that the statements are fairly presented.

To determine the source of a company's assets, on which financial statement will you look?

The independent auditor's report conveys whether or not the business is a good investment.

Harrison Company calculated the following amounts concerning its financial information for the years ending December 31, 2015 and 2014: Required: Examine Harrison's ratios. Is the change in the current ratio favorable or not? Explain.

Which of the following represents the correct sequence of the three business activities on the Statement of Cash Flows?

An entity's assets come from three primary sources: creditors, investors, and profits retained in the business.

The quality of accounting information that allows a user to compare two or more accounting periods for a single company is known as consistency.

Lamar Company has total current assets of $122,000 and total current liabilities of $57,000. What is the amount of working capital for Lamar Company?

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. Calculate the current ratio for Guinther & Sons.

is the quality of accounting information that makes it comprehensible to those willing to spend the necessary time.

Sawaddee Enterprises began the year with total assets of $450,000 and total liabilities of $230,000. If Sawaddee's total assets doubled to $900,000 and its owners' equity remained the same during the year, what was the amount of its total liabilities at the end of the year?

For each item listed, select the section of the balance sheet in which the item would be reported. -Capital stock

Which one of the following equations represents retained earnings activity?

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 best describes the external auditor's report?

Read the information for Taryn Corporation. Prepare a balance sheet for Taryn Corporation in good form.

is the quality of accounting information that allows a user to analyze two or more companies and look for similarities and differences.

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