Exam 2: Financial Statements and the Annual Report

Hindsville Company reported revenues of $165,000 and net income of $20,000 for 2014.Cash generated by operations was $40,000.In addition,Hindsville Company borrowed $24,000 from a bank.During 2014,Hindsville purchased new equipment for $30,000 cash and paid cash dividends of $15,000 to stockholders.Hindsville's cash balance at the beginning of 2014 was $22,000.

What is conservatism and why is it important in accounting?

Information that is material means that an error or alternative method of handling a transaction

Which set of items below are current assets?

Which of the following best describes a company's operating activities?

If a firm has a current ratio of 2,the subsequent receipt of a 60-day note receivable to settle an open account will cause the ratio to decrease.

Garrison Industries Garrison Industries began operations on January 2,2014,with an investment of $50,000 by each of its two stockholders.Net income for its first year of business was $240,000.Garrison Industries paid a total of $100,000 in dividends to its stockholders during the year. Read the information about Garrison Industries.What is the company's retained earnings balance at December 31,2014?

Which of the following statements is trueconcerning intangible assets?

Which one of the following categories on a statement of cash flows is used to report the cash flow effects of buying and selling property,plant,and equipment?

Read the information about Garrison Industries.The company's dividends for the year

The operating cycle for all businesses is one year.

Accountants are the main reason financial statements are prepared.

How does the definition of a current liability relate to that of a current asset?

Heidi Corporation's partial income statement is as follows: Required Determine the profit margin.Would you invest in Heidi Corporation? Explain your answer.

What is the purpose of a statement of stockholders' equity? How does it differ from the statement of retained earnings? Which statement is required?

Three common categories of long-term assets are: 1)property,plant,and equipment,2)investments,and 3)intangibles.

Oreo Company has current assets of $20,000,current liabilities of $8,000,and long-term liabilities of $3,000.Oreo wants to buy new equipment.How much of its existing cash can Oreo use to acquire equipment without allowing its current ratio to decline below 2.0 to 1?

Which financial statement reports the sources and uses of an entity's cash resources?

Relevant information can be quantitative or qualitative.In deciding whether to go to college part-time or full-time,which of the following is a qualitative factor for a student?

____________________ is the quality of accounting information that makes it dependable in representing the events that it purports to represent