Question 1

A subsequent event is an event that occurs

Accepted Answer

A)   after the annual report is issued.
B)   anytime after the end of the accounting period.
C)   between the end of the accounting period and the date the annual report is issued.
D)   anytime before the annual report is issued. C

Question 2

A company's operating cycle might be measured as

Accepted Answer

A)   Total asset turnover in days minus fixed asset turnover in days.
B)   Total asset turnover in days minus fixed asset turnover in days minus inventory turnover in days minus accounts receivable turnover in days.
C)   Inventory turnover in days plus accounts receivable turnover in days plus accounts payable turnover in days.
D)   Inventory turnover in days plus accounts receivable turnover in days minus accounts payable turnover in days. D

Question 3

Which balance sheet account is usually reported at net realizable value?

Accepted Answer

A)   Investments
B)   Land.
C)   Accounts Receivable.
D)   Inventory. C

Question 4

Which of the following is included in shareholders' equity?

Accepted Answer

A)   Sinking funds
B)   Deferred revenues
C)   Accumulated other comprehensive income
D)   Goodwill

Question 5

Which of the following financial statements reports changes in financial position of the company during the accounting period?

Accepted Answer

A)   Statement of cash flows
B)   Balance sheet
C)   Statement of financial position
D)   All of the above report changes in financial position during the accounting period.

Question 6

Exhibit 4-1
Given the following information for Blue Bell Company for last year: 
-Refer to Exhibit 4-1. Blue Bell's debt to assets ratio December 31was

Accepted Answer

A)   16.7%   \quad  2.2 times
B)   33.3%  \quad   26.0 times
C)   26.2%  \quad  27.4 times
D)   42.8%  \quad   28.9 times

Question 7

The adjusted historical cost of fixed assets, calculated as historical cost minus depreciation, is called

Accepted Answer

A)   amortization.
B)   net book value.
C)   impairment.
D)   depreciable cost.

Question 8

All long-term investments are listed on the balance sheet at fair value.

Accepted Answer

A) True 
 B)False

Question 9

Discuss how intracompany and intercompany comparisons help fulfill the qualitative characteristics of consistency and comparability.

Accepted Answer

The answer of Discuss how intracompany and intercompany comparisons help...

Question 10

A deficit occurs when a company's

Accepted Answer

A)   retained earnings are less than its common stock.
B)   dividends distributed are greater than comprehensive income.
C)   dividends and cumulative losses are greater than cumulative net income.
D)   retained earnings are less than assets minus liabilities.

Question 11

All of the following are non-monetary assets except

Accepted Answer

A)   goodwill.
B)   patents
C)   inventory.
D)   accounts receivable.

Question 12

Which of the following statements about executory contracts is false?

Accepted Answer

A)   Executory contracts are contracts in the process of begin filled.
B)   A purchase order is an example of an executory contract.
C)   Executory contracts are recognized as liabilities when the company receives the benefits
D)   Executory contracts are contingent obligations.

Question 13

A balance sheet shows the

Accepted Answer

A)   fair value of a company at a particular date.
B)   results of the company's income-producing activities.
C)   financial position of a company at a particular date.
D)   cash inflows and outflows of a company for the accounting period.

Question 14

Which of the following would typically be recorded as an intangible asset with a finite useful life?

Accepted Answer

A)   Franchises
B)   Trademarks
C)   Brand name
D)   Goodwill

Question 15

A client of your accounting firm is impressed with the precision and detail in the financial statements that you have just prepared for his company. However, he wants to know if there are any limitations to the information contained in them.
Required:
Briefly describe four limitations of the balance sheet.

Accepted Answer

The answer of A client of your accounting firm is...

Question 16

Asset measurement methods that reflect historical values include fair value, present value, replacement cost, and net realizable value.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements about fair value is true?

Accepted Answer

A)   Level 1 inputs should be used to determine fair value only when Level 2 and Level 3 inputs are not available.
B)   Level 3 inputs are observable market prices for similar assets in active markets.
C)   Fair value accounting is also known as "mark-to-market" accounting.
D)   Fair value is a measure of market-based entry value.

Question 18

In preparing a statement of changes in shareholders' equity, the company includes land given to a shareholder as a dividend. This transaction is included in the statement because it represents

Accepted Answer

A)   an investment by a shareholder that increases equity.
B)   an investment by a shareholder that decreases equity.
C)   a distribution to a shareholder that increases equity.
D)   a distribution to a shareholder that decreases equity.

Question 19

The following data were taken from the Oxon Hill, Inc. balance sheet:

Accepted Answer

The answer of The following data were taken from the...

Question 20

Exhibit 4-1
Given the following information for Blue Bell Company for last year: 
-Refer to Exhibit 4-1. Blue Bell's accounts receivable turnover for the year was

Accepted Answer

A)   2.2 times
B)   26.0 times
C)   27.4 times
D)   28.9 times

Exam 4: The Balance Sheet and the Statement of Shareholders Equity