Exam 12: Financial Statements, Closing Entries, and Reversing Entries

What would the current ratio be if a company had the following financial information: Current Assets, $150,000; Current Liabilities, $75,000; Total Assets $350,000. Round to one decimal places.

Current Assets consist of all of the following EXCEPT

On a classified balance sheet, Prepaid Insurance is classified as

An account numbered 201 indicates that the account is the first of the

Debts that are due and payable in less than a year

The calculation of the cost of goods available for sale is not affected by the amount of the beginning merchandise inventory.

An increase in Rent Expense results in a decrease in gross profit.

If Current Assets are $90,000, Property and Equipment is $120,000, Current Liabilities are $24,000, and Long-Term Liabilities are $106,000, the current ratio is

A net income will result if gross profit is greater than

If the Cash Short and Over account has a debit balance, the amount is reported under

A partial work sheet for Carman and Company is presented below. The merchandise inventory at the beginning of the year was $46,700. D. E. Carman, the owner, withdrew $33,500 during the year. The fiscal year ends on July 31 of this year. Instructions:

A current ratio of 3.50 means

On the income statement, adding delivered cost of purchases to beginning merchandise inventory results in

A decrease in Rent Expense results in a decrease in gross profit.

Liquidity is the ability to pay all current liabilities in one year.

Which of the following are NOT examples of selling expenses

The following accounts are from the Athletics Store worksheet dated March 31 of the current year: The data needed for adjustments on March 31 are as follows: a-b.Merchandise Inventory, March 31, $46,250. c.Insurance expired for the year, $1,580. d.Depreciation for the year, $4,230. e.Accrued wages on January 31, $2,513. f.Supplies used during the year $950.Instructions: (Note: use t-accounts to assist in calculation the below items.)

After the temporary accounts are closed, only the nominal accounts have balances.

The current ratio would probably be of most interest to

Define current ratio and how it is calculated, and explain the relationship between the two parts of the ratio resulting from the calculation.