Exam 5: Foundations of Financial Reporting and the Classified Balance Sheet

Use this balance sheet and income statement for the first year of operations for Cane Construction to answer the following question.Use ending balances whenever average balances are required for computing ratios. -The current ratio for Cane Construction is

The lower-of-cost-or-market method of accounting for inventories follows the convention of

Which of the following is not a measure of profitability?

Working capital measures

Financial statements are often audited by management to increase confidence in the statements' reliability.

Financial statements have faithful representation when the information has all of the following except

Which of the following would not appear in the owner's equity section of a corporation?

The profit margin and asset turnover ratios are important measures,but they have a limitation.Describe these limitations and discuss the ratio that can be used to overcome these deficiencies.

Which of the following should be classified as a current asset?

Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios. -The asset turnover for National Textile is

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

All of the following must certify that a public company's financial statements are accurate,complete,and not misleading,except for the

The qualitative characteristic of faithful representation includes

Which of the following should be classified as an intangible asset?

Intangible assets could include all except

Which accounting convention requires a note to the financial statements explaining the company's method of revenue recognition?

Use the following information to calculate the liquidity and profitability ratios listed below.Round to two decimal places. a.Current ratio b.Working capital c.Return on equity d.Profit margin e.Debt to equity ratio f.Return on assets g.Asset turnover

Use this balance sheet and income statement for the first year of operations for Cane Construction to answer the following question.Use ending balances whenever average balances are required for computing ratios. -The return on equity for Cane Construction is

Even when no errors have been made,accounting is never 100 percent accurate because of the extensive use of estimates.