Question 1

What is the difference between comparability and consistency?

Accepted Answer

Comparability allows comparisons to be m

Question 2

Crouse Company applies the consistency convention.What does this mean?

Accepted Answer

A) Crouse Co.uses the same names for all its expenses as its competitors. 
B) Crouse Co.has selected certain accounting principles that can never be changed. 
C) Crouse Co.applies the same accounting principles each accounting period. 
D) Crouse Co.applies the same accounting principles as it competitors. 
A) Crouse Co.uses the same names for all its expenses as its competitors. 
B) Crouse Co.has selected certain accounting principles that can never be changed. 
C) Crouse Co.applies the same accounting principles each accounting period. 
D) Crouse Co.applies the same accounting principles as it competitors.

Question 3

Ginger Company claims its financial information is useful.What two qualities must be present in order to have "useful" accounting information? Explain these two qualities.

Accepted Answer

To be useful,accounting information must

Question 4

The purchase of inventory for cash will cause the current ratio to decrease.

Accepted Answer

A) True 
 B)False

Question 5

Deal Mart The 2014 income statement of Deal Mart shows operating revenues of $130,800,selling expenses of $37,100,general and administrative expenses of $34,900,interest expense of $900,and income tax expense of $11,430.Deal Mart's stockholders' equity was $280,000 at the beginning of the year and $320,000 at the end of the year.The company has 20,000 shares of stock outstanding at December 31,2014.
Read the information about Deal Mart.What is Deal Mart's profit margin (to the closest tenth of a percent)?

Accepted Answer

A) 2.8 
B) 35.5 
C) 61.2 
D) 14.5 
A) 2.8 
B) 35.5 
C) 61.2 
D) 14.5

Question 6

What is the primary objective of financial reporting?

Accepted Answer

A) To help investors make credit decisions. 
B) To help management assess cash flows. 
C) To protect users from fraudulent financial information. 
D) To provide useful information for decision making 
A) To help investors make credit decisions. 
B) To help management assess cash flows. 
C) To protect users from fraudulent financial information. 
D) To provide useful information for decision making

Question 7

Guinther & Sons,Inc. Guinther & Sons,Inc.a retailer of men's clothing,earned a net profit of $77,000 for 2014.The balance sheet for Guinther & Sons includes the following items:
  Read the information for Guinther & Sons,Inc.The average current ratio for stores such as Guinther & Sons is 2.4 to 1.What does this comparison tell you about its liquidity?

Accepted Answer

A) It is more liquid than its competitors 
B) It has more long-term assets than its competitors 
C) Since a rule of thumb for current ratios is 2 to 1,neither Nadia & Sisters nor its competitors is liquid. 
D) Nadia & Sisters is more profitable than its competitors. 
A) It is more liquid than its competitors 
B) It has more long-term assets than its competitors 
C) Since a rule of thumb for current ratios is 2 to 1,neither Nadia & Sisters nor its competitors is liquid. 
D) Nadia & Sisters is more profitable than its competitors.

Question 8

Loren Corporation
Listed below is information from the financial records of Loren Corporation at December 31,2014:
   Read the information about Loren Corporation.
Required:
Prepare the long-term asset section of Loren Corp.'s balance sheet at December 31,2014.You may omit the heading.Why are these amounts classified as "long-term"?

Accepted Answer

@#IMG-DLM& Long-term assets are those that are exp

Question 9

Which of the following would not appear on an income statement?

Accepted Answer

A) Sales revenue 
B) Cost of goods sold 
C) Accounts receivable 
D) Insurance expense 
A) Sales revenue 
B) Cost of goods sold 
C) Accounts receivable 
D) Insurance expense

Question 10

Which of the following events will cause a company's current ratio to decrease?

Accepted Answer

A) The sale of inventory for cash. 
B) The sale of inventory for credit (accounts receivable). 
C) Issuing stock for cash. 
D) Paying off long-term debt with cash. 
A) The sale of inventory for cash. 
B) The sale of inventory for credit (accounts receivable). 
C) Issuing stock for cash. 
D) Paying off long-term debt with cash.

Question 11

Loren Corporation
Listed below is information from the financial records of Loren Corporation at December 31,2014:
   Read the information about Loren Corporation.
Required:
Prepare the current assets section of the balance sheet for Loren Corp.at December 31,2014.You may omit the heading.How does the concept of liquidity apply?

Accepted Answer

@#IMG-DLM& Liquidity is an indicator of how close

Question 12

To determine the source of a company's assets,on which financial statement will you look?

Accepted Answer

A) Balance sheet only 
B) Income statement only 
C) Both the balance sheet and the income statement 
D) Both the income statement and the statement of retained earnings 
A) Balance sheet only 
B) Income statement only 
C) Both the balance sheet and the income statement 
D) Both the income statement and the statement of retained earnings

Question 13

Which one of the following items is reported as a current asset on a classified balance sheet?

Accepted Answer

A) Inventory 
B) Accounts payable 
C) Land 
D) Common stock 
A) Inventory 
B) Accounts payable 
C) Land 
D) Common stock

Question 14

Which one of the following is not a major category for long-term assets?

Accepted Answer

A) Intangibles 
B) Property,plant,and equipment 
C) Receivables 
D) Goodwill 
A) Intangibles 
B) Property,plant,and equipment 
C) Receivables 
D) Goodwill

Question 15

Skyline,Inc. The balance sheet of Skyline Inc.includes the following items:
  Read the information about Skyline,Inc.What is Skyline's working capital?

Accepted Answer

A) $58,440 
B) $89,740 
C) $84,040 
D) $9,740 
A) $58,440 
B) $89,740 
C) $84,040 
D) $9,740

Question 16

____________________ is the process of writing off the cost of tangible assets and ____________________ is the process of writing off the cost of intangible assets.

Accepted Answer

Depreciati

Question 17

Crystal,Inc.
Crystal,Inc.reported $52,000 of net income for 2014.Crystal's balance sheet at December 31,2014 includes the following amounts:
   Read the information about Crystal,Inc.Has Crystal been profitable since it began operations? How do you know?

Accepted Answer

Retained earnings represents the company

Question 18

Assume that you want to determine the profit margin for a company.Which one of the following financial statements is the best source of this information?

Accepted Answer

A) Statement of retained earnings 
B) Statement of cash flows 
C) Statement of stockholders' equity 
D) Income statement 
A) Statement of retained earnings 
B) Statement of cash flows 
C) Statement of stockholders' equity 
D) Income statement

Question 19

Which of the following include only current assets?

Accepted Answer

A) Accounts receivable,cash,inventory,office supplies 
B) Cash,accounts payable,inventory,office supplies 
C) Cash,land,accounts receivable,inventory 
D) Accounts receivable,cash,furniture,office supplies 
A) Accounts receivable,cash,inventory,office supplies 
B) Cash,accounts payable,inventory,office supplies 
C) Cash,land,accounts receivable,inventory 
D) Accounts receivable,cash,furniture,office supplies

Question 20

____________________ is the quality of accounting information that allows a user to analyze two or more companies and look for similarities and differences

Accepted Answer

The answer of ____________________ is the quality of accounting information...

What is the difference between comparability and consistency?

Crouse Company applies the consistency convention.What does this mean?

Ginger Company claims its financial information is useful.What two qualities must be present in order to have "useful" accounting information? Explain these two qualities.

The purchase of inventory for cash will cause the current ratio to decrease.

What is the primary objective of financial reporting?

Which of the following would not appear on an income statement?

Which of the following events will cause a company's current ratio to decrease?

To determine the source of a company's assets,on which financial statement will you look?

Which one of the following items is reported as a current asset on a classified balance sheet?

Which one of the following is not a major category for long-term assets?

Skyline,Inc. The balance sheet of Skyline Inc.includes the following items: Read the information about Skyline,Inc.What is Skyline's working capital?

is the process of writing off the cost of tangible assets and is the process of writing off the cost of intangible assets.

Crystal,Inc. Crystal,Inc.reported $52,000 of net income for 2014.Crystal's balance sheet at December 31,2014 includes the following amounts: Read the information about Crystal,Inc.Has Crystal been profitable since it began operations? How do you know?

Assume that you want to determine the profit margin for a company.Which one of the following financial statements is the best source of this information?

Which of the following include only current assets?

____________________ is the quality of accounting information that allows a user to analyze two or more companies and look for similarities and differences

Accounting As a Form of Communication

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Exam 2: Financial Statements and the Annual Report

What is the difference between comparability and consistency?

Crouse Company applies the consistency convention.What does this mean?

Ginger Company claims its financial information is useful.What two qualities must be present in order to have "useful" accounting information? Explain these two qualities.

The purchase of inventory for cash will cause the current ratio to decrease.

What is the primary objective of financial reporting?

Which of the following would not appear on an income statement?

Which of the following events will cause a company's current ratio to decrease?

To determine the source of a company's assets,on which financial statement will you look?

Which one of the following items is reported as a current asset on a classified balance sheet?

Which one of the following is not a major category for long-term assets?

Skyline,Inc. The balance sheet of Skyline Inc.includes the following items: Read the information about Skyline,Inc.What is Skyline's working capital?

____________________ is the process of writing off the cost of tangible assets and ____________________ is the process of writing off the cost of intangible assets.

Crystal,Inc. Crystal,Inc.reported $52,000 of net income for 2014.Crystal's balance sheet at December 31,2014 includes the following amounts: Read the information about Crystal,Inc.Has Crystal been profitable since it began operations? How do you know?

Assume that you want to determine the profit margin for a company.Which one of the following financial statements is the best source of this information?

Which of the following include only current assets?

____________________ is the quality of accounting information that allows a user to analyze two or more companies and look for similarities and differences

Accounting As a Form of Communication

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

is the process of writing off the cost of tangible assets and is the process of writing off the cost of intangible assets.