Question 1

____________________ and ____________________ have claims to an entity's economic resources.

Accepted Answer

The answer of ____________________ and ____________________ have claims to an...

Question 2

There is a standard threshold for materiality set by the Financial Accounting Standards Board for all companies.

Accepted Answer

A) True 
 B)False

Question 3

Coglin, Inc. incurred a net loss of $20,000 for 2014. The balance sheet at December 31, 2014, for Coglin, Inc., includes the following items:
  A Determine Coglin's current ratio and working capital.
B Beyond the information provided in your answers to "A," what does the composition of Coglin's
current assets tell you about its liquidity.
C What other information would one need to fully access Coglin's liquidity?

Accepted Answer

The answer of Coglin, Inc. incurred a net loss of...

Question 4

Independent auditors CPAs render an opinion that the financial statements do or do not fairly present a company's financial position, operating results, and cash flows.

Accepted Answer

A) True 
 B)False

Question 5

Read the information about Cargo Corporation.
Required:
Calculate Cargo's current ratio at December 31, 2015. What does this ratio tell you about the "composition" of the
current assets?

Accepted Answer

The answer of Read the information about Cargo Corporation.
Required:
Calculate Cargo's...

Question 6

How is income from operations determined?

Accepted Answer

A)  By subtracting the cost of goods sold from sales. 
B)  By subtracting the total operating expenses from sales 
C)  By subtracting the total operating expenses from gross profit. 
D)  By subtracting selling expenses from operating revenues.

Question 7

Identify whether the following investor questions are associated with a primary or b secondary financial reporting objectives.
-If I buy 50 shares of Apple, how much cash will I receive in dividends each year?

Accepted Answer

A) primary financial reporting objective 
B) secondary financial reporting objective

Question 8

In the independent auditors' report included with the annual report, management discusses the financial statements and provides the shareholders with explanations for certain amounts reported in the statements.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following events will cause a company's current ratio to decrease?

Accepted Answer

A)  The sale of inventory for cash. 
B)  The sale of inventory for credit accounts receivable. 
C)  Issuing stock for cash. 
D)  Paying off long-term debt with cash.

Question 10

The balance sheet of Evanston Inc. includes the following items:
  Required:
1 Determine the current ratio and working capital.
2 What does the composition of the current assets tell you about Evanston's liquidity?
3 What other information do you need to fully assess Evanston's liquidity?

Accepted Answer

The answer of The balance sheet of Evanston Inc. includes...

Question 11

For each item listed, select the section of the balance sheet in which the item would be reported.
-Interest payable

Accepted Answer

A) Current Assets 
B) Property. Plant, and Equipment 
C) Current Liabilities 
D) Long-term Liabilities 
E) Stockholders' Equity

Question 12

Match the following characteristics with the statements about each qualitative characteristic's importance.
-This quality allows users to analyze two or more companies and look for similarities and differences.

Accepted Answer

A) Consistency 
B) Materiality 
C) Conservatism 
D) Comparability 
E) Reliability
F)Relevance
G)Understandability

Question 13

The qualitative characteristics of accounting data include:

Accepted Answer

A)  assets reported on the balance sheet. 
B)  all accounting information. 
C)  cash flows. 
D)  reliability.

Question 14

Funds raised from financing activities should be invested in assets that can be used to carry on business operations.

Accepted Answer

A) True 
 B)False

Question 15

The Financial Accounting Standards Board defined the objectives of financial reporting.

Accepted Answer

A) True 
 B)False

Question 16

From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Purchased inventory on account

Accepted Answer

A) Working capital will increase 
B) Working capital will decrease 
C) Working capital will not change

Question 17

For each item listed, select the section of the balance sheet in which the item would be reported.
-Notes payable--due within one year

Accepted Answer

A) Current Assets 
B) Property. Plant, and Equipment 
C) Current Liabilities 
D) Long-term Liabilities 
E) Stockholders' Equity

Question 18

Which of the following accounts are normally reported as current liabilities on a classified balance sheet?

Accepted Answer

A)  Accounts payable and bonds payable 
B)  Interest payable and mortgage payable 
C)  Income taxes payable and salaries payable 
D)  Capital stock and accounts payable

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

Question 20

Most businesses have an operating cycle of less than one year.

Accepted Answer

A) True 
 B)False

Exam 2: Financial Statements and the Annual Report

and have claims to an entity's economic resources.

There is a standard threshold for materiality set by the Financial Accounting Standards Board for all companies.

Independent auditors CPAs render an opinion that the financial statements do or do not fairly present a company's financial position, operating results, and cash flows.

Read the information about Cargo Corporation. Required: Calculate Cargo's current ratio at December 31, 2015. What does this ratio tell you about the "composition" of the current assets?

How is income from operations determined?

Identify whether the following investor questions are associated with a primary or b secondary financial reporting objectives. -If I buy 50 shares of Apple, how much cash will I receive in dividends each year?

In the independent auditors' report included with the annual report, management discusses the financial statements and provides the shareholders with explanations for certain amounts reported in the statements.

Which of the following events will cause a company's current ratio to decrease?

The balance sheet of Evanston Inc. includes the following items: Required: 1 Determine the current ratio and working capital. 2 What does the composition of the current assets tell you about Evanston's liquidity? 3 What other information do you need to fully assess Evanston's liquidity?

For each item listed, select the section of the balance sheet in which the item would be reported. -Interest payable

Match the following characteristics with the statements about each qualitative characteristic's importance. -This quality allows users to analyze two or more companies and look for similarities and differences.

The qualitative characteristics of accounting data include:

Funds raised from financing activities should be invested in assets that can be used to carry on business operations.

The Financial Accounting Standards Board defined the objectives of financial reporting.

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Purchased inventory on account

For each item listed, select the section of the balance sheet in which the item would be reported. -Notes payable--due within one year

Which of the following accounts are normally reported as current liabilities on a classified balance sheet?

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

Most businesses have an operating cycle of less than one year.