Question 1

Only investors have an interest in a company's ability to generate favorable cash flows.

Accepted Answer

A) True 
 B)False

Question 2

Use this information to answer the following question.   The total dollar amount of assets to be classified as investments is

Accepted Answer

A)  $336,000. 
B)  $0. 
C)  $224,000. 
D)  $112,000. 
A)  $336,000. 
B)  $0. 
C)  $224,000. 
D)  $112,000.

Question 3

Accounting expense is a selling expense on the income statement.

Accepted Answer

A) True 
 B)False

Question 4

General and administrative expenses are a category of operating expense.

Accepted Answer

A) True 
 B)False

Question 5

Use this information to answer the following question.   The total dollar amount of assets to be classified as current assets is

Accepted Answer

A)  $504,000. 
B)  $476,000. 
C)  $588,000. 
D)  $488,000. 
A)  $504,000. 
B)  $476,000. 
C)  $588,000. 
D)  $488,000.

Question 6

The relevance of accounting information is also an indication of its faithful representation.

Accepted Answer

A) True 
 B)False

Question 7

Cash return on assets is measured in percent.

Accepted Answer

A) True 
 B)False

Question 8

Using the following amounts taken from the balance sheet and income statement of a business,compute the measures listed below.Round to one decimal place.
   
a.Debt to equity ratio
b.Return on equity
c.Return on assets
d.Asset turnover

Accepted Answer

a.85.7% [($20,000 + $40,000)÷

Question 9

A material item is one that is likely to affect a user's decision.

Accepted Answer

A) True 
 B)False

Question 10

The single-step and multistep income statements result in the same net income figures.

Accepted Answer

A) True 
 B)False

Question 11

Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios.     The debt to equity ratio for Isanti Systems is

Accepted Answer

A)  67 percent. 
B)  75 percent. 
C)  25 percent. 
D)  33.3 percent. 
A)  67 percent. 
B)  75 percent. 
C)  25 percent. 
D)  33.3 percent.

Question 12

The debt to equity ratio equals

Accepted Answer

A)  stockholders' equity divided by total liabilities. 
B)  stockholders' equity divided by long-term liabilities. 
C)  total liabilities divided by stockholders' equity. 
D)  current liabilities divided by average stockholders' equity. 
A)  stockholders' equity divided by total liabilities. 
B)  stockholders' equity divided by long-term liabilities. 
C)  total liabilities divided by stockholders' equity. 
D)  current liabilities divided by average stockholders' equity.

Question 13

Investors and creditors use financial statements to evaluate a company's ability to pay dividends and interest.

Accepted Answer

A) True 
 B)False

Question 14

Expensing a building in the year of purchase represents an abuse of which of the following accounting conventions?

Accepted Answer

A)  Relevance 
B)  Cost-benefit 
C)  Conservatism 
D)  Timeliness 
A)  Relevance 
B)  Cost-benefit 
C)  Conservatism 
D)  Timeliness

Question 15

Match each definition with the correct term below.
-Consistency

Accepted Answer

A) Information should have direct bearing on a decision. 
B) The quality or accounting information that enables users to comprehend the meaning of the information they receive. 
C) The quality of accounting information that assures users that information as presented can be substantiated. 
D) The accounting convention that requires that once a company has adopted an accounting procedure,it must use it from one period to the next. 
E) The accounting convention that refers to the relative importance of an item or event.
F)The accounting convention that states that when faced with choosing between two equally acceptable procedures or estimates,accountants should choose the one that is least likely to overstate assets and income.
G)Cash and other assets that a company can reasonably expect to convert to cash,sell,or consume within one year or the company's normal operating cycle.
H)Debts that fall due more than one year in the future or beyond the normal operating cycle.
I)The amount that stockholders invest in the business.
J)Gross sales less sales returns and allowances
K)The amount a merchandiser paid for the merchandise it sold during an accounting period.
L)The income from a company's main business. 
A) Information should have direct bearing on a decision. 
B) The quality or accounting information that enables users to comprehend the meaning of the information they receive. 
C) The quality of accounting information that assures users that information as presented can be substantiated. 
D) The accounting convention that requires that once a company has adopted an accounting procedure,it must use it from one period to the next. 
E) The accounting convention that refers to the relative importance of an item or event.
F)The accounting convention that states that when faced with choosing between two equally acceptable procedures or estimates,accountants should choose the one that is least likely to overstate assets and income.
G)Cash and other assets that a company can reasonably expect to convert to cash,sell,or consume within one year or the company's normal operating cycle.
H)Debts that fall due more than one year in the future or beyond the normal operating cycle.
I)The amount that stockholders invest in the business.
J)Gross sales less sales returns and allowances
K)The amount a merchandiser paid for the merchandise it sold during an accounting period.
L)The income from a company's main business.

Question 16

Match each definition with the correct term below.
-Contributed capital

Accepted Answer

A) Information should have direct bearing on a decision. 
B) The quality or accounting information that enables users to comprehend the meaning of the information they receive. 
C) The quality of accounting information that assures users that information as presented can be substantiated. 
D) The accounting convention that requires that once a company has adopted an accounting procedure,it must use it from one period to the next. 
E) The accounting convention that refers to the relative importance of an item or event.
F)The accounting convention that states that when faced with choosing between two equally acceptable procedures or estimates,accountants should choose the one that is least likely to overstate assets and income.
G)Cash and other assets that a company can reasonably expect to convert to cash,sell,or consume within one year or the company's normal operating cycle.
H)Debts that fall due more than one year in the future or beyond the normal operating cycle.
I)The amount that stockholders invest in the business.
J)Gross sales less sales returns and allowances
K)The amount a merchandiser paid for the merchandise it sold during an accounting period.
L)The income from a company's main business. 
A) Information should have direct bearing on a decision. 
B) The quality or accounting information that enables users to comprehend the meaning of the information they receive. 
C) The quality of accounting information that assures users that information as presented can be substantiated. 
D) The accounting convention that requires that once a company has adopted an accounting procedure,it must use it from one period to the next. 
E) The accounting convention that refers to the relative importance of an item or event.
F)The accounting convention that states that when faced with choosing between two equally acceptable procedures or estimates,accountants should choose the one that is least likely to overstate assets and income.
G)Cash and other assets that a company can reasonably expect to convert to cash,sell,or consume within one year or the company's normal operating cycle.
H)Debts that fall due more than one year in the future or beyond the normal operating cycle.
I)The amount that stockholders invest in the business.
J)Gross sales less sales returns and allowances
K)The amount a merchandiser paid for the merchandise it sold during an accounting period.
L)The income from a company's main business.

Question 17

Match each definition with the correct term below.
-Current assets

Accepted Answer

A) Information should have direct bearing on a decision. 
B) The quality or accounting information that enables users to comprehend the meaning of the information they receive. 
C) The quality of accounting information that assures users that information as presented can be substantiated. 
D) The accounting convention that requires that once a company has adopted an accounting procedure,it must use it from one period to the next. 
E) The accounting convention that refers to the relative importance of an item or event.
F)The accounting convention that states that when faced with choosing between two equally acceptable procedures or estimates,accountants should choose the one that is least likely to overstate assets and income.
G)Cash and other assets that a company can reasonably expect to convert to cash,sell,or consume within one year or the company's normal operating cycle.
H)Debts that fall due more than one year in the future or beyond the normal operating cycle.
I)The amount that stockholders invest in the business.
J)Gross sales less sales returns and allowances
K)The amount a merchandiser paid for the merchandise it sold during an accounting period.
L)The income from a company's main business. 
A) Information should have direct bearing on a decision. 
B) The quality or accounting information that enables users to comprehend the meaning of the information they receive. 
C) The quality of accounting information that assures users that information as presented can be substantiated. 
D) The accounting convention that requires that once a company has adopted an accounting procedure,it must use it from one period to the next. 
E) The accounting convention that refers to the relative importance of an item or event.
F)The accounting convention that states that when faced with choosing between two equally acceptable procedures or estimates,accountants should choose the one that is least likely to overstate assets and income.
G)Cash and other assets that a company can reasonably expect to convert to cash,sell,or consume within one year or the company's normal operating cycle.
H)Debts that fall due more than one year in the future or beyond the normal operating cycle.
I)The amount that stockholders invest in the business.
J)Gross sales less sales returns and allowances
K)The amount a merchandiser paid for the merchandise it sold during an accounting period.
L)The income from a company's main business.

Question 18

A practical decision to expense small capital expenditures rather than record them as property,plant,and equipment and depreciate them is probably made on the basis of the convention of

Accepted Answer

A)  comparability. 
B)  consistency. 
C)  materiality. 
D)  faithful representation. 
A)  comparability. 
B)  consistency. 
C)  materiality. 
D)  faithful representation.

Question 19

Using the following data,prepare a classified balance sheet for Kanabec Corporation as of December 31,2013.

Accepted Answer

The answer of Using the following data,prepare a classified balance...

Question 20

Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting period.

Accepted Answer

A) True 
 B)False

Only investors have an interest in a company's ability to generate favorable cash flows.

Use this information to answer the following question. The total dollar amount of assets to be classified as investments is

Accounting expense is a selling expense on the income statement.

General and administrative expenses are a category of operating expense.

Use this information to answer the following question. The total dollar amount of assets to be classified as current assets is

The relevance of accounting information is also an indication of its faithful representation.

Cash return on assets is measured in percent.

Using the following amounts taken from the balance sheet and income statement of a business,compute the measures listed below.Round to one decimal place. a.Debt to equity ratio b.Return on equity c.Return on assets d.Asset turnover

A material item is one that is likely to affect a user's decision.

The single-step and multistep income statements result in the same net income figures.

Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios. The debt to equity ratio for Isanti Systems is

The debt to equity ratio equals

Investors and creditors use financial statements to evaluate a company's ability to pay dividends and interest.

Expensing a building in the year of purchase represents an abuse of which of the following accounting conventions?

Match each definition with the correct term below. -Consistency

Match each definition with the correct term below. -Contributed capital

Match each definition with the correct term below. -Current assets

A practical decision to expense small capital expenditures rather than record them as property,plant,and equipment and depreciate them is probably made on the basis of the convention of

Using the following data,prepare a classified balance sheet for Kanabec Corporation as of December 31,2013.

Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting period.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 5: Financial Reporting and Analysis

Only investors have an interest in a company's ability to generate favorable cash flows.

Use this information to answer the following question. The total dollar amount of assets to be classified as investments is

Accounting expense is a selling expense on the income statement.

General and administrative expenses are a category of operating expense.

Use this information to answer the following question. The total dollar amount of assets to be classified as current assets is

The relevance of accounting information is also an indication of its faithful representation.

Cash return on assets is measured in percent.

Using the following amounts taken from the balance sheet and income statement of a business,compute the measures listed below.Round to one decimal place. a.Debt to equity ratio b.Return on equity c.Return on assets d.Asset turnover

A material item is one that is likely to affect a user's decision.

The single-step and multistep income statements result in the same net income figures.

Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios. The debt to equity ratio for Isanti Systems is

The debt to equity ratio equals

Investors and creditors use financial statements to evaluate a company's ability to pay dividends and interest.

Expensing a building in the year of purchase represents an abuse of which of the following accounting conventions?

Match each definition with the correct term below. -Consistency

Match each definition with the correct term below. -Contributed capital

Match each definition with the correct term below. -Current assets

A practical decision to expense small capital expenditures rather than record them as property,plant,and equipment and depreciate them is probably made on the basis of the convention of

Using the following data,prepare a classified balance sheet for Kanabec Corporation as of December 31,2013.

Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting period.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters