Exam 2: Financial Statements and the Annual Report

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

The ability of a company to pay its debt as it comes due relates to ____________________.

Investing activities are needed to provide the funds to start a business.

An advantage of the current ratio is that it considers the makeup of the current assets.

Which of the following items will be found in a corporate annual report?

In a ____________________-step income statement,all expenses and losses are added together,then deducted from the sum of all revenues and gains.

Materiality deals with the size of an error in accounting information.

Carnival Bakery borrowed $500,000 from Front Street Bank.Carnival then hired a contractor to build a new cookie distribution outlet.In which section of Carnival's statement of cash flows would you find information that indicated that Carnival acquired the new cookie distribution outlet?

Grand Stores,Inc.is concerned about its profitability for the current year,since its profit margin has dropped 10% since last year.Which of the following is the least useful comparison in evaluating the drop in Grand Stores' profit margin?

Eagle Corporation Presented below are all of the items from Eagle Corporation's income statement for the years ending December 31,2014 and 2013. Read the information about Eagle Corporation. Required:: How much is net income for the year ended December 31,2014? If Eagle Corporation had used a single-step statement,by how much would net income be different? Explain.

An accountant is uncertain about the best estimate of an amount for a business transaction.If two amounts are about equally likely,the amount least likely to overstate assets and income is selected.Which of the following qualities is characterized by this action?

Eagle Corporation Presented below are all of the items from Eagle Corporation's income statement for the years ending December 31,2014 and 2013. Read the information about Eagle Corporation. Required: Compare the profit margins for 2014 and 2013.Is the company becoming more or less profitable or staying the same? What could be contributing to this?

For several years,Shaun Corporation has had a current ratio that was consistent with other companies in its industry.For the most recent year,Shaun's current ratio was significantly higher than that for the industry.What is the best possible explanation for this situation?

On the statement of cash flows,the ______________________________ section involves the issuance and repayment of long term liabilities and stock transactions.

_________________________ are cash and other assets that are reasonably expected to be realized in cash during the normal operating cycle of the business.

Which of the following would not be considered to be an intangible asset?

Which of the following categories on a statement of cash flows is used to report the cash flow effects of transactions involving a company's stock?

Current assets,other than cash,are expected to be sold or consumed are during a company's normal operating cycle.

The 2014 income statement of Nasir Inc.shows operating revenues of $135,800,selling expenses of $40,310,general and administrative expenses of $33,990,interest expense of $880,and income tax expense of $13,090.Nasir's stockholders' equity was $250,000 at the beginning of the year and $345,000 at the end of the year.The company has 10,000 shares of stock outstanding at December 31,2014. REQUIRED: Compute Nasir's profit margin.What other information would you need in order to comment on whether this ratio is favorable?

Which financial statement reports information helpful in assessing working capital?