Question 1

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 2

Use the information from the following multistep income statement to prepare a single-step income statement in proper form.

Accepted Answer

The answer of Use the information from the following multistep...

Question 3

Which of the following accounts is most likely to appear on the balance sheet as a current liability?

Accepted Answer

A)  Accumulated Depreciation 
B)  Bonds Payable 
C)  Mortgage Payable 
D)  Wages Payable 
A)  Accumulated Depreciation 
B)  Bonds Payable 
C)  Mortgage Payable 
D)  Wages Payable

Question 4

A different set of financial statements usually is prepared for each user.

Accepted Answer

A) True 
 B)False

Question 5

The convention of full disclosure requires that financial statements present all the information relevant to users' understanding of the statements.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  $140,000. 
B)  $220,000. 
C)  $120,000. 
D)  $170,000. 
A)  $140,000. 
B)  $220,000. 
C)  $120,000. 
D)  $170,000.

Question 7

A corporation's stockholders' equity section of the balance sheet may contain all except

Accepted Answer

A)  T. McDonald, capital 
B)  Retained earnings 
C)  Additional paid-in capital 
D)  Common stock 
A)  T. McDonald, capital 
B)  Retained earnings 
C)  Additional paid-in capital 
D)  Common stock

Question 8

Which accounting term does not mean the same as the others?

Accepted Answer

A)  Retained earnings 
B)  Net worth 
C)  Capital 
D)  Owner's equity 
A)  Retained earnings 
B)  Net worth 
C)  Capital 
D)  Owner's equity

Question 9

A company with a current ratio of 1.0 is considered more liquid than one with a current ratio of 2.0.

Accepted Answer

A) True 
 B)False

Question 10

Full disclosure of all important facts aids in overcoming the limitations of accounting information.

Accepted Answer

A) True 
 B)False

Question 11

The main difference between intangible assets and property,plant,and equipment is the length of the asset's life.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not considered an operating expense?

Accepted Answer

A)  General office expenses 
B)  Cost of goods sold 
C)  Freight-out expense 
D)  Advertising expense 
A)  General office expenses 
B)  Cost of goods sold 
C)  Freight-out expense 
D)  Advertising expense

Question 13

Use this information to answer the following question. $\begin{array}{c}
\text { Alcorn \& Zeto Company }\
\text { Income Statement}\
\text { For the Year Ended December 31, 2010}\
\begin{array}{lrr}
\text { Revenues } & \
\text { Net sales } & \$ 103,250 \
\text { Dividend income } & 8,750 \
\text { Total revenues }&&\$112,000\
\text { Costs of goods sold } & \$ 30,000 \
\text { Selling expenses } & 10,000 \
\text { General and administrative expenses } & 13,750 \
\text { Interest expense } & 6,250 \
\text { Total costs and expenses } && 60,000 \
\text { Income before income taxes } && \$ 52,000 \
\text { Income taxes } && 19,500 \
 \text { Net income } && \$ 32,500
\end{array}\end{array}$ If the income statement were prepared in a multistep form,income from operations would be

Accepted Answer

A)  $49,500. 
B)  $42,000. 
C)  $52,000. 
D)  $43,250. 
A)  $49,500. 
B)  $42,000. 
C)  $52,000. 
D)  $43,250.

Question 14

Operating expenses include cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)  $100,000. 
B)  $180,000. 
C)  $0. 
D)  $80,000. 
A)  $100,000. 
B)  $180,000. 
C)  $0. 
D)  $80,000.

Question 16

Which of the following is not expressed in terms of a percentage?

Accepted Answer

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

Question 17

Return on assets is a measure of liquidity.

Accepted Answer

A) True 
 B)False

Question 18

Only the chief financial officer and the company's CPAs are responsible for the accuracy of financial statements.The chief executive officer is not expected to understand financial information.

Accepted Answer

A) True 
 B)False

Question 19

The accounting convention that is most responsible for the increase in the number of notes to financial statements is

Accepted Answer

A)  materiality. 
B)  full disclosure. 
C)  consistency. 
D)  conservatism. 
A)  materiality. 
B)  full disclosure. 
C)  consistency. 
D)  conservatism.

Question 20

Interest paid on debt would be entered on the multistep income statement in the category called

Accepted Answer

A)  selling expenses. 
B)  other revenues and expenses. 
C)  general and administrative expenses. 
D)  operating expenses. 
A)  selling expenses. 
B)  other revenues and expenses. 
C)  general and administrative expenses. 
D)  operating expenses.

Exam 4: Financial Reporting and Analysis

The debt to equity ratio equals

Use the information from the following multistep income statement to prepare a single-step income statement in proper form.

Which of the following accounts is most likely to appear on the balance sheet as a current liability?

A different set of financial statements usually is prepared for each user.

The convention of full disclosure requires that financial statements present all the information relevant to users' understanding of the statements.

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

A corporation's stockholders' equity section of the balance sheet may contain all except

Which accounting term does not mean the same as the others?

A company with a current ratio of 1.0 is considered more liquid than one with a current ratio of 2.0.

Full disclosure of all important facts aids in overcoming the limitations of accounting information.

The main difference between intangible assets and property,plant,and equipment is the length of the asset's life.

Which of the following is not considered an operating expense?

Operating expenses include cost of goods sold.

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

Which of the following is not expressed in terms of a percentage?

Return on assets is a measure of liquidity.

Only the chief financial officer and the company's CPAs are responsible for the accuracy of financial statements.The chief executive officer is not expected to understand financial information.

The accounting convention that is most responsible for the increase in the number of notes to financial statements is

Interest paid on debt would be entered on the multistep income statement in the category called

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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