Question 1

Using the following data,prepare a classified balance sheet for Blanchard Corporation as of December 31,2010.

Accepted Answer

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

Question 2

The relevance of accounting information is also an indication of its reliability.

Accepted Answer

A) True 
 B)False

Question 3

Earnings per share are found on which financial statement?

Accepted Answer

A)  Balance sheet 
B)  Income statement 
C)  Statement of cash flows 
D)  Statement of retained earnings 
A)  Balance sheet 
B)  Income statement 
C)  Statement of cash flows 
D)  Statement of retained earnings

Question 4

Both wholesalers and retailers are types of merchandising companies.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following does not include net income in its computation?

Accepted Answer

A)  Debt to equity ratio 
B)  Return on assets 
C)  Return on equity 
D)  Profit margin 
A)  Debt to equity ratio 
B)  Return on assets 
C)  Return on equity 
D)  Profit margin

Question 6

The Securities and Exchange Commission instituted rules requiring the chief executive officers and chief financial officers of all publicly traded companies to certify that,to their knowledge,the quarterly and annual statements that their companies file with the SEC are

Accepted Answer

A)  100 percent accurate and contain no misstatements, errors, or mistakes. 
B)  accurate and complete. 
C)  subject to interpretation due to the many accounting rules and regulations. 
D)  not to be used except by individuals working for the company. 
A)  100 percent accurate and contain no misstatements, errors, or mistakes. 
B)  accurate and complete. 
C)  subject to interpretation due to the many accounting rules and regulations. 
D)  not to be used except by individuals working for the company.

Question 7

The qualitative characteristic of faithful representation contains all the following features except

Accepted Answer

A)  complete. 
B)  verifiability. 
C)  neutral. 
D)  free from material error. 
A)  complete. 
B)  verifiability. 
C)  neutral. 
D)  free from material error.

Question 8

Using the following amounts taken from the balance sheet and income statement of a business,compute the measures listed below.After each answer,write "L" if it is a measure of liquidity or "P" if it is a measure of profitability.Round to two decimal places.
 $\begin{array}{lrlr}
\text { Current assets } & \$ 6,000 & \text { Average stockholders' equity } & \$ 15,000 \
\text { Average total assets } & 30,000 & \text { Net sales } & 19,500 \
\text { Current liabilities } & 4,500 & \text { Net income } & 2,400 \
\text { Long-term liabilities } & 10,500 & &
\end{array}$  
a. Return on assets
b. Working capital
c. Return on equity
d. Current ratio

Accepted Answer

a.8% P ($2,400 ÷ $30,000)
b.$1

Question 9

Working capital measures

Accepted Answer

A)  the excess of current assets over current liabilities-what is on hand to continue business operations. 
B)  the ability to earn a satisfactory income. 
C)  the amount of debt in the company. 
D)  the profitability of the business. 
A)  the excess of current assets over current liabilities-what is on hand to continue business operations. 
B)  the ability to earn a satisfactory income. 
C)  the amount of debt in the company. 
D)  the profitability of the business.

Question 10

Sales returns and allowances are deducted from gross sales on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 11

An advantage of the single-step income statement is that it is less complex than the multistep form.

Accepted Answer

A) True 
 B)False

Question 12

Return on assets is a better measure of profitability than profit margin because it takes into account the assets invested in the business.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not considered a selling expense?

Accepted Answer

A)  Cost of goods sold 
B)  Sales salaries expense 
C)  Freight-out expense 
D)  Insurance on the sales office 
A)  Cost of goods sold 
B)  Sales salaries expense 
C)  Freight-out expense 
D)  Insurance on the sales office

Question 14

Asset turnover equals

Accepted Answer

A)  net sales divided by average total assets. 
B)  average total assets divided by net income. 
C)  average total assets divided by total liabilities. 
D)  net income divided by average total assets. 
A)  net sales divided by average total assets. 
B)  average total assets divided by net income. 
C)  average total assets divided by total liabilities. 
D)  net income divided by average total assets.

Question 15

Use this information to answer the following question.   The total amount of working capital is

Accepted Answer

A)  $370,000. 
B)  $40,000. 
C)  $140,000. 
D)  $60,000. 
A)  $370,000. 
B)  $40,000. 
C)  $140,000. 
D)  $60,000.

Question 16

Why is it important for a company to maintain the same accounting methods and practices from period to period?

Accepted Answer

An important aspect of financial analysi

Question 17

To which account is the cost of inventory transferred when a product is sold?

Accepted Answer

A)  Sales 
B)  Operating expenses 
C)  Inventory sold 
D)  Cost of goods sold 
A)  Sales 
B)  Operating expenses 
C)  Inventory sold 
D)  Cost of goods sold

Question 18

Each of the following statements is justified by a concept or convention of accounting.Write the letter in the blank next to each statement corresponding to the concept or convention involved.
a. Consistency
b. Materiality
c. Conservatism
_____ 1. This convention best enhances comparability of financial statements between
years.
_____ 2. A merger agreed on just after the balance sheet date nevertheless is reported in
the notes to the financial statements.
_____ 3. A company forgoes hiring another full-time accountant, which would add only
slightly to the financial statements' accuracy.
_____ 4. A company uses lower-of-cost-or-market to value inventory.
_____ 5. A large company rounds its financial statement figures to the nearest $10,000.
d. Full disclosure
e. Cost-benefit

Accepted Answer

The answer of Each of the following statements is justified...

Question 19

The Sarbanes-Oxley Act requires a company to guarantee that its financial statements are 100 percent accurate.

Accepted Answer

A) True 
 B)False

Question 20

A debt to equity ratio of 1.0 means that half of the company's assets are financed by creditors.

Accepted Answer

A) True 
 B)False

Exam 4: Financial Reporting and Analysis

Using the following data,prepare a classified balance sheet for Blanchard Corporation as of December 31,2010.

The relevance of accounting information is also an indication of its reliability.

Earnings per share are found on which financial statement?

Both wholesalers and retailers are types of merchandising companies.

Which of the following does not include net income in its computation?

The Securities and Exchange Commission instituted rules requiring the chief executive officers and chief financial officers of all publicly traded companies to certify that,to their knowledge,the quarterly and annual statements that their companies file with the SEC are

The qualitative characteristic of faithful representation contains all the following features except

Working capital measures

Sales returns and allowances are deducted from gross sales on the balance sheet.

An advantage of the single-step income statement is that it is less complex than the multistep form.

Return on assets is a better measure of profitability than profit margin because it takes into account the assets invested in the business.

Which of the following is not considered a selling expense?

Asset turnover equals

Use this information to answer the following question. The total amount of working capital is

Why is it important for a company to maintain the same accounting methods and practices from period to period?

To which account is the cost of inventory transferred when a product is sold?

The Sarbanes-Oxley Act requires a company to guarantee that its financial statements are 100 percent accurate.

A debt to equity ratio of 1.0 means that half of the company's assets are financed by creditors.

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

Contributed Capital

Investments

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

The Changing Business Environment - a Managers Perspective

Cost Concepts and Cost Allocation

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions,incltarget Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

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