Exam 1: Accounting As a Form of Communication

Read the information about Cargo Corporation. Required: Prepare the long-term asset section of Cargo Corp.'s balance sheet at December 31, 2015. You may omit the heading. Why are these amounts classified as "long-term"?

Which set of items below are current assets?

The concept of conservatism is the capacity of information to make a difference in a decision.

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

Sawaddee Enterprises began the year with total assets of $450,000 and total liabilities of $230,000. If Sawaddee total liabilities increased by $31,000 and its owners' equity decreased by $53,000 during the year, what was the amount of its total assets at the end of the year?

Which one of the following items appears on a balance sheet?

Lawton Corporation's end­of­year balance sheet consisted of the following amounts: What amount should Lawton report on its balance sheet for total assets?

Which statement is true concerning gains and losses?

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Collected an account receivable

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.

Funds raised from financing activities should be invested in assets that can be used to carry on business operations.

Barton Building Company is ready to sell its bonds. Which one of the following financial questions is most relevant to the issue of the bonds and that investors will most likely want answered before they purchase the bonds?

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. -Bonds payable

Read the information about Cargo Corporation. Required: Calculate Cargo's current ratio at December 31, 2015. What does this ratio tell you about the "composition" of the current assets?

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

The private sector group with authority to set accounting standards is the __________________________________________________.

United Airlines is an example of a:

In order for accounting information to be useful in making informed decisions, it must be:

How does the definition of a current liability relate to that of a current asset?

Financial accounting is the branch of accounting concerned with communication with internal management.