Question 1

____________________ is the practice of using the least optimistic estimate when two estimates of amounts are about equally likely

Accepted Answer

The answer of ____________________ is the practice of using the...

Question 2

Identify each of the following items as operating (O),investing (I),or financing (F)activities on the statement of cash flows(assuming the indirect method).If an item is not on the statement,please mark it as none of these (N).If the item is an inflow,please indicate by a (+).If the item is an outflow,please indicate by a (-)
____ (a)Paid an account payable for inventory purchased in the previous accounting period.
____ (b)Amortization of debt issuance costs
____ (c)Paid a dividend to stockholders.
____ (d)Paid the interest on a note payable to National Street Bank.
____ (e)Paid the principal amount due on the note payable to National Street Bank.
____ (f)Transferred cash from a checking account into a money market fund.
____ (g)Purchased equipment for cash.

Accepted Answer

a.-O b.+O

Question 3

Which statement is trueconcerning an income statement?

Accepted Answer

A) The income statement shows how much profit the company has earned since it began operations. 
B) Net income on the income statement should be equal to the amount of cash on the balance sheet. 
C) The income statement summarizes the results of operations for a period of time. 
D) The income statement indicates the liquidity of the company on an annual basis. 
A) The income statement shows how much profit the company has earned since it began operations. 
B) Net income on the income statement should be equal to the amount of cash on the balance sheet. 
C) The income statement summarizes the results of operations for a period of time. 
D) The income statement indicates the liquidity of the company on an annual basis.

Question 4

How are assets which are expected to be realized in cash,sold,or consumed within the normal operating cycle of a business or within one year (if the operating cycle is shorter than one year)reported on a classified balance sheet?

Accepted Answer

A) Property,plant,and equipment 
B) Current assets 
C) Intangible assets 
D) Current liabilities 
A) Property,plant,and equipment 
B) Current assets 
C) Intangible assets 
D) Current liabilities

Question 5

The following information is taken from Harvey Company's balance sheet at December 31,2014:
   REQUIRED: Using the information provided for Harvey Company,answer the following questions:

Accepted Answer

The answer of The following information is taken from Harvey...

Question 6

Rosu Company has total current assets of $120,000 and total current liabilities of $50,000.What is the amount of working capital for Rosu Company?

Accepted Answer

A) $ 27,000 
B) $ 67,000 
C) $ 70,000 
D) $ 91,000 
A) $ 27,000 
B) $ 67,000 
C) $ 70,000 
D) $ 91,000

Question 7

For which of the following is the current ratio most useful?

Accepted Answer

A) In evaluating a company's liquidity. 
B) In evaluating a company's solvency. 
C) In evaluating a company's profitability. 
D) In evaluating a company's probability. 
A) In evaluating a company's liquidity. 
B) In evaluating a company's solvency. 
C) In evaluating a company's profitability. 
D) In evaluating a company's probability.

Question 8

Comparative income statements for Gregson Inc.are as follows:
   Required
The president and management believe that the company performed better in 2014 than
it did in 2013.Write the president's letter to be included in the 2014 annual report.
Explain why the company is financially sound and why shareholders should not be
alarmed by the $120,000 loss in a year when gross profit increased significantly.

Accepted Answer

Letter from the President to Stockholder

Question 9

Mill Valley Corporation was organized on January 1,2014,with the investment of $225,000 in cash by its stockholders.The company immediately purchased an office building for $300,000,paying $201,000 in cash and signing a three-year promissory note for the balance.Mill Valley signed a five-year,$50,000 promissory note at a local bank during 2014 and received cash in the same amount.During its first year,Mill Valley collected $93,000 from its customers.It paid $60,600 for inventory,$22,400 in salaries and wages,and another $5,100 in taxes.Mill Valley paid $5,300 in cash dividends.
Required
1.Prepare a statement of cash flows for the year ended December 31,2014.
2.What does this statement tell you that an income statement does not?

Accepted Answer

Mill Valley Corporation
Statement of Cas

Question 10

Which statement is trueconcerning gains and losses?

Accepted Answer

A) Gains and losses are reported on the balance sheet in the Assets and Liabilities sections,respectively. 
B) Gains and losses are special types of revenues and expenses that are reported on the income statement. 
C) The amounts of gains and losses are included in the calculation of the current ratio,in the numerator and denominator,respectively. 
D) Gains and losses are reported only on a multi-step income statement. 
A) Gains and losses are reported on the balance sheet in the Assets and Liabilities sections,respectively. 
B) Gains and losses are special types of revenues and expenses that are reported on the income statement. 
C) The amounts of gains and losses are included in the calculation of the current ratio,in the numerator and denominator,respectively. 
D) Gains and losses are reported only on a multi-step income statement.

Question 11

Which one of the following subtotals or totals would appear in a multiple-step,but not a single-step income statement?

Accepted Answer

A) Income tax expense 
B) Income from operations 
C) Cost of goods sold 
D) Net income 
A) Income tax expense 
B) Income from operations 
C) Cost of goods sold 
D) Net income

Question 12

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.Calculate the current ratio for Guinther & Sons.

Accepted Answer

A) 2.58 to 1 
B) 2.75 to 1 
C) 3.00 to 1 
D) 2.00 to 1 
A) 2.58 to 1 
B) 2.75 to 1 
C) 3.00 to 1 
D) 2.00 to 1

Question 13

If the current ratio is 3 to 1,net income is $12,000,and current liabilities are $24,000,how much is working capital?

Accepted Answer

A) $ 12,000 
B) $ 36,000 
C) $ 48,000 
D) $ 72,000 
A) $ 12,000 
B) $ 36,000 
C) $ 48,000 
D) $ 72,000

Question 14

Which of the following would appear on a multiple-step income statement but not on a single-step income statement?

Accepted Answer

A) Net income 
B) Total expenses 
C) Total revenues 
D) Income before income taxes 
A) Net income 
B) Total expenses 
C) Total revenues 
D) Income before income taxes

Question 15

A bank loaned $62 million to Apex Corporation to finance the construction of a new distribution warehouse.In which section of Apex's statement of cash flows would you be able to determine whether the company repaid any portion of the debt during the year?

Accepted Answer

A) Operating Activities 
B) Investing Activities 
C) Financing Activities 
D) Profit Activities 
A) Operating Activities 
B) Investing Activities 
C) Financing Activities 
D) Profit Activities

Question 16

Property,plant and equipment is classified as ____________________ assets on the balance sheet.

Accepted Answer

The answer of Property,plant and equipment is classified as ____________________...

Question 17

A balance sheet shows cash,$75,000;marketable securities,$115,000;accounts receivable,$150,000 and $222,500 of inventories.Current liabilities are $225,000.The current ratio is 2.5 to 1.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

Profit margin:
Net Income/Sales = $640,0

Question 19

What are the two subtotals that distinguish the multi-step income statement from the single-step income statement?

Accepted Answer

A) Income before taxes and income taxes 
B) Total operating revenues and total operating expenses 
C) Income from operations and income before taxes 
D) Total revenues and total expenses 
A) Income before taxes and income taxes 
B) Total operating revenues and total operating expenses 
C) Income from operations and income before taxes 
D) Total revenues and total expenses

Question 20

The concept of conservatism is the capacity of information to make a difference in a decision.

Accepted Answer

A) True 
 B)False

____________________ is the practice of using the least optimistic estimate when two estimates of amounts are about equally likely

Which statement is trueconcerning an income statement?

How are assets which are expected to be realized in cash,sold,or consumed within the normal operating cycle of a business or within one year (if the operating cycle is shorter than one year)reported on a classified balance sheet?

The following information is taken from Harvey Company's balance sheet at December 31,2014: REQUIRED: Using the information provided for Harvey Company,answer the following questions:

Rosu Company has total current assets of $120,000 and total current liabilities of $50,000.What is the amount of working capital for Rosu Company?

For which of the following is the current ratio most useful?

Which statement is trueconcerning gains and losses?

Which one of the following subtotals or totals would appear in a multiple-step,but not a single-step income statement?

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.Calculate the current ratio for Guinther & Sons.

If the current ratio is 3 to 1,net income is $12,000,and current liabilities are $24,000,how much is working capital?

Which of the following would appear on a multiple-step income statement but not on a single-step income statement?

A bank loaned $62 million to Apex Corporation to finance the construction of a new distribution warehouse.In which section of Apex's statement of cash flows would you be able to determine whether the company repaid any portion of the debt during the year?

Property,plant and equipment is classified as ____________________ assets on the balance sheet.

A balance sheet shows cash,$75,000;marketable securities,$115,000;accounts receivable,$150,000 and $222,500 of inventories.Current liabilities are $225,000.The current ratio is 2.5 to 1.

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

What are the two subtotals that distinguish the multi-step income statement from the single-step income statement?

The concept of conservatism is the capacity of information to make a difference in a decision.

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

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Exam 2: Financial Statements and the Annual Report

____________________ is the practice of using the least optimistic estimate when two estimates of amounts are about equally likely

Which statement is trueconcerning an income statement?

How are assets which are expected to be realized in cash,sold,or consumed within the normal operating cycle of a business or within one year (if the operating cycle is shorter than one year)reported on a classified balance sheet?

The following information is taken from Harvey Company's balance sheet at December 31,2014: REQUIRED: Using the information provided for Harvey Company,answer the following questions:

Rosu Company has total current assets of $120,000 and total current liabilities of $50,000.What is the amount of working capital for Rosu Company?

For which of the following is the current ratio most useful?

Which statement is trueconcerning gains and losses?

Which one of the following subtotals or totals would appear in a multiple-step,but not a single-step income statement?

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.Calculate the current ratio for Guinther & Sons.

If the current ratio is 3 to 1,net income is $12,000,and current liabilities are $24,000,how much is working capital?

Which of the following would appear on a multiple-step income statement but not on a single-step income statement?

A bank loaned $62 million to Apex Corporation to finance the construction of a new distribution warehouse.In which section of Apex's statement of cash flows would you be able to determine whether the company repaid any portion of the debt during the year?

Property,plant and equipment is classified as ____________________ assets on the balance sheet.

A balance sheet shows cash,$75,000;marketable securities,$115,000;accounts receivable,$150,000 and $222,500 of inventories.Current liabilities are $225,000.The current ratio is 2.5 to 1.

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

What are the two subtotals that distinguish the multi-step income statement from the single-step income statement?

The concept of conservatism is the capacity of information to make a difference in a decision.

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

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