Question 1

In order to be classified as an asset the resource must provide future benefit.

Accepted Answer

A) True 
 B)False

Question 2

Bill's Crafts reported $36 500 for current assets and $10 500 for other assets. The business also had $15 000 of current liabilities. Quick assets totalled $9000, and long-term liabilities totalled $25 000.
a. What was Bill's current ratio?
b. What was Bill's quick ratio?
c. What was Bill's debt ratio?
d. What was Bill's owner's equity?

Accepted Answer

The answer of Bill's Crafts reported $36 500 for current...

Question 3

The accounting equation is assets = ____________________ + owner's equity.

Accepted Answer

The answer of The accounting equation is assets = ____________________...

Question 4

The higher a business' debt ratio, the lower its:

Accepted Answer

A)  financial flexibility. 
B)  liquidity. 
C)  working capital. 
D)  total liabilities. 
A)  financial flexibility. 
B)  liquidity. 
C)  working capital. 
D)  total liabilities.

Question 5

Example 8.1
The information below pertains to the following questions.
ABC reported $356 500 for current assets and $100 500 for other assets. It also had $175 000 of current liabilities. ABC's quick assets totalled $222 000, and its long-term liabilities totalled $105 000.
-Refer to Example 8.1. Determine ABC's current ratio.

Accepted Answer

A)  0.79:1 
B)  1.27:1 
C)  2.04:1 
D)  3:22:1 
A)  0.79:1 
B)  1.27:1 
C)  2.04:1 
D)  3:22:1

Question 6

Liquidity refers to a firm's ability to use assets to pay off owners under owner's equity.

Accepted Answer

A) True 
 B)False

Question 7

Many significant business questions can be answered by analysing a business' income statement and balance sheet together.

Accepted Answer

A) True 
 B)False

Question 8

Jason's Soccer Shop had net income of $600 000, interest expense of $40 000, average owner's equity of $125 000, and average total assets of $250 000.
a. Determine Jason's return on assets.
b. Determine Jason's return on owner's equity.

Accepted Answer

The answer of Jason's Soccer Shop had net income of...

Question 9

Why do internal and external users need the information contained in both the income statement and the balance sheet?

Accepted Answer

The answer of Why do internal and external users need...

Question 10

Which of the following items is NOT reported on the balance sheet as an asset?

Accepted Answer

A)  Employees. 
B)  Investments in other businesses. 
C)  Trademarks. 
D)  Purchased goodwill. 
A)  Employees. 
B)  Investments in other businesses. 
C)  Trademarks. 
D)  Purchased goodwill.

Question 11

In relation to 'inventory turnover', the general rule is:

Accepted Answer

A)  the higher the turnover, the more efficient a business is. 
B)  the lower the turnover, the more efficient a business is. 
C)  the higher the turnover, the more inventory a business has. 
D)  the lower the turnover, the more inventory a business has. 
A)  the higher the turnover, the more efficient a business is. 
B)  the lower the turnover, the more efficient a business is. 
C)  the higher the turnover, the more inventory a business has. 
D)  the lower the turnover, the more inventory a business has.

Question 12

What is operating capability? What are two commonly used measures of operating capability?

Accepted Answer

The answer of What is operating capability? What are two...

Question 13

A ____________________ balance sheet shows subtotals for assets, liabilities and owner's equity in related groupings.

Accepted Answer

The answer of A ____________________ balance sheet shows subtotals for...

Question 14

The return on total assets assesses:

Accepted Answer

A)  the mix of debt and equity in a business. 
B)  the return for owners. 
C)  how efficiently a business has used its economic resources. 
D)  how many assets a business needs to replace. 
A)  the mix of debt and equity in a business. 
B)  the return for owners. 
C)  how efficiently a business has used its economic resources. 
D)  how many assets a business needs to replace.

Question 15

Economic resources are to ______, as claims on economic resources are to liabilities and owner's equity.

Accepted Answer

A)  Cash 
B)  Income 
C)  Assets 
D)  Expenses 
A)  Cash 
B)  Income 
C)  Assets 
D)  Expenses

Question 16

The ____________ __________________ ______________ measures how efficiently a business collects cash from its credit customers.

Accepted Answer

The answer of The ____________ __________________ ______________ measures how efficiently...

Question 17

The current ratio is current assets divided by:

Accepted Answer

A)  quick assets. 
B)  current liabilities. 
C)  quick liabilities. 
D)  total liabilities. 
A)  quick assets. 
B)  current liabilities. 
C)  quick liabilities. 
D)  total liabilities.

Question 18

____________________ are the external parties to whom the business owes economic obligations.

Accepted Answer

The answer of ____________________ are the external parties to whom...

Question 19

Which of the following would NOT be classified as a non-current asset?

Accepted Answer

A)  long-term loan from a bank. 
B)  plant and equipment. 
C)  long-term investment in another company. 
D)  intangible asset. 
A)  long-term loan from a bank. 
B)  plant and equipment. 
C)  long-term investment in another company. 
D)  intangible asset.

Question 20

What are non-current liabilities? Provide three examples.

Accepted Answer

The answer of What are non-current liabilities? Provide three examples....

In order to be classified as an asset the resource must provide future benefit.

The accounting equation is assets = ____________________ + owner's equity.

The higher a business' debt ratio, the lower its:

Liquidity refers to a firm's ability to use assets to pay off owners under owner's equity.

Many significant business questions can be answered by analysing a business' income statement and balance sheet together.

Jason's Soccer Shop had net income of $600 000, interest expense of $40 000, average owner's equity of $125 000, and average total assets of $250 000. a. Determine Jason's return on assets. b. Determine Jason's return on owner's equity.

Why do internal and external users need the information contained in both the income statement and the balance sheet?

Which of the following items is NOT reported on the balance sheet as an asset?

In relation to 'inventory turnover', the general rule is:

What is operating capability? What are two commonly used measures of operating capability?

A ____________________ balance sheet shows subtotals for assets, liabilities and owner's equity in related groupings.

The return on total assets assesses:

Economic resources are to ______, as claims on economic resources are to liabilities and owner's equity.

The ____ measures how efficiently a business collects cash from its credit customers.

The current ratio is current assets divided by:

____________________ are the external parties to whom the business owes economic obligations.

Which of the following would NOT be classified as a non-current asset?

What are non-current liabilities? Provide three examples.

Introduction to Business Accounting and the Role of Professional Skills

Developing a Business Plan: Cost-Volume-Profit Analysis

Developing a Business Plan: Budgeting

The Accounting System: Concepts and Applications

Recording, Storing and Reporting Accounting Information

Managing and Reporting Working Capital

The Income Statement: Content and Use

The Cash Flow Statement: Content and Use

Sustainable Business

Short-Term Planning Decisions

Capital Expenditure Decisions

Filters

Exam 8: The Balance Sheet: Content, Use and Analysis

In order to be classified as an asset the resource must provide future benefit.

The accounting equation is assets = ____________________ + owner's equity.

The higher a business' debt ratio, the lower its:

Liquidity refers to a firm's ability to use assets to pay off owners under owner's equity.

Many significant business questions can be answered by analysing a business' income statement and balance sheet together.

Jason's Soccer Shop had net income of $600 000, interest expense of $40 000, average owner's equity of $125 000, and average total assets of $250 000. a. Determine Jason's return on assets. b. Determine Jason's return on owner's equity.

Why do internal and external users need the information contained in both the income statement and the balance sheet?

Which of the following items is NOT reported on the balance sheet as an asset?

In relation to 'inventory turnover', the general rule is:

What is operating capability? What are two commonly used measures of operating capability?

A ____________________ balance sheet shows subtotals for assets, liabilities and owner's equity in related groupings.

The return on total assets assesses:

Economic resources are to ______, as claims on economic resources are to liabilities and owner's equity.

The ____________ __________________ ______________ measures how efficiently a business collects cash from its credit customers.

The current ratio is current assets divided by:

____________________ are the external parties to whom the business owes economic obligations.

Which of the following would NOT be classified as a non-current asset?

What are non-current liabilities? Provide three examples.

Introduction to Business Accounting and the Role of Professional Skills

Developing a Business Plan: Cost-Volume-Profit Analysis

Developing a Business Plan: Budgeting

The Accounting System: Concepts and Applications

Recording, Storing and Reporting Accounting Information

Managing and Reporting Working Capital

The Income Statement: Content and Use

The Cash Flow Statement: Content and Use

Sustainable Business

Short-Term Planning Decisions

Capital Expenditure Decisions

Filters

The ____ measures how efficiently a business collects cash from its credit customers.