Question 1

The following income statement was reported for Bauer Inc.for the first year of operations ending December 31,2019 reported (in thousands of dollars):
  A.Calculate gross profit percentage.
B.Calculate net profit margin.
C.Calculate earnings per share if there are 200,000 shares of common stock outstanding.

Accepted Answer

The answer of The following income statement was reported for...

Question 2

Huron has provided the following year-end balances: Cash,$25,000
Patents,$7,900
Accounts receivable,$9,300
Property,plant,and equipment,$98,700
Prepaid insurance,$3,600
Accumulated depreciation,$10,000
Inventory,$37,000
Retained earnings,15,500
Trademarks,$12,600
Accounts payable,$8,000
Goodwill,$11,000
-
How much are Huron's net noncurrent assets?

Accepted Answer

A) $122,300. 
B) $120,200. 
C) $123,800. 
D) $112,300.

Question 3

Which of the following is an objective of the external audit of a company's financial statements?

Accepted Answer

A) To provide a forecast of the company's future earnings. 
B) To assure no fraud has been committed by the company's management. 
C) To provide credibility that the financial statements are fairly presented. 
D) To detect all accounting errors made by the accounting system and employees.

Question 4

Huron has provided the following year-end balances: Cash,$25,000
Patents,$7,900
Accounts receivable,$9,300
Property,plant,and equipment,$98,700
Prepaid insurance,$3,600
Accumulated depreciation,$10,000
Inventory,$37,000
Retained earnings,15,500
Trademarks,$12,600
Accounts payable,$8,000
Goodwill,$11,000
-
How much are Huron's current assets?

Accepted Answer

A) $85,900. 
B) $71,300. 
C) $74,900. 
D) $102,100.

Question 5

Intangible assets are reported on the balance sheet as noncurrent assets and include goodwill.

Accepted Answer

A) True 
 B)False

Question 6

Brimmel Corp.has provided the following information: Sales were $780,000;
Cost of goods sold was $429,000;
Net income was $195,000.
What was Brimmel's gross profit percentage?

Accepted Answer

A) 55% 
B) 45% 
C) 62% 
D) 222%

Question 7

Intangible assets are reported on the balance sheet as a current asset.

Accepted Answer

A) True 
 B)False

Question 8

The form 10-K is the annual report that publicly traded companies must file with the Securities & Exchange Commission (SEC).

Accepted Answer

A) True 
 B)False

Question 9

Which of the following tasks is not performed by the Securities & Exchange Commission (SEC)?

Accepted Answer

A) Overseeing the work of the Financial Accounting Standards Board (FAS
B) . 
B) Overseeing the work of the Public Company Accounting Oversight Board (PCAO
B) . 
C) Taking responsibility for protecting investors and maintaining the integrity of the securities markets. 
D) The development of generally accepted accounting principles.

Question 10

The Financial Accounting Standards Board (FASB)oversees the work of the Public Company Accounting Oversight Board (PCAOB).

Accepted Answer

A) True 
 B)False

Question 11

Which of the following does not increase the net profit margin ratio?

Accepted Answer

A) Increasing sales volume. 
B) Increasing sales price. 
C) Reducing inventory kept on hand. 
D) Decreasing operating expenses.

Question 12

Determine the effect of the following transactions on the identified financial statement components and ratios.Code your answers as follows:
A: If the transaction results in an increase in the financial statement component or ratio.
B: If the transaction results in a decrease in the financial statement component or ratio.
C: If the transaction does not affect the financial statement component or ratio.
Transaction 1: A company issued common stock at a price in excess of par value.
Revenues _____
Assets _____
Stockholders' equity _____
Return on assets ratio _____
Transaction 2: A company recorded depreciation expense at year-end.
Net income _____
Assets _____
Stockholders' equity _____
Total asset turnover ratio _____

Accepted Answer

The answer of Determine the effect of the following transactions...

Question 13

The Securities & Exchange Commission requires publicly traded companies to have their financial statements audited by their internal auditors.

Accepted Answer

A) True 
 B)False

Question 14

Determine the effect of the following transactions on the financial statements components identified.Code your answers as follows:
A: If the transaction results in an increase in the financial statement component or ratio.
B: If the transaction results in a decrease in the financial statement component or ratio.
C: If the transaction does not affect the financial statement component or ratio.
Transaction 1: A company sold inventory for an amount greater than its cost.
Gross profit _____
Current assets _____
Stockholders' equity _____
Transaction 2: Advertising expense was recorded but has yet to be paid for.
Net income _____
Gross Profit _____
Stockholders' equity _____

Accepted Answer

The answer of Determine the effect of the following transactions...

Question 15

Which of the following transactions will decrease both the return on assets ratio and the total asset turnover ratio?

Accepted Answer

A) Purchasing land by signing a note payable. 
B) Accruing interest expense at year-end. 
C) Accruing interest revenue at year-end. 
D) Collecting cash from an account receivable.

Question 16

Which of the following transactions results in a decrease in the return on assets ratio?

Accepted Answer

A) Increasing the sales price of the products sold. 
B) An increase in the net profit margin ratio. 
C) Purchasing land by signing a long-term note payable. 
D) Collecting cash from an account receivable.

Question 17

Harley Company has provided the following selected financial information.  
-What is Harley's 2019 net profit margin (rounded)?

Accepted Answer

A) 5.0% 
B) 6.1% 
C) 6.7% 
D) 13.2%

Question 18

Which one of the following statements is true when a company sells inventory costing $800 for $1,400 cash,and operating expenses are $500?

Accepted Answer

A) There is no change in current assets. 
B) Stockholders' equity increases $100. 
C) Gross profit increases $100. 
D) Net sales increases $2,200.

Question 19

Huron has provided the following year-end balances: Cash,$25,000
Patents,$7,900
Accounts receivable,$9,300
Property,plant,and equipment,$98,700
Prepaid insurance,$3,600
Accumulated depreciation,$10,000
Inventory,$37,000
Retained earnings,$15,500
Trademarks,$12,600
Accounts payable,$8,000
Goodwill,$11,000
-
How much is Huron's stockholders' equity?

Accepted Answer

A) $33,800. 
B) $187,100. 
C) $195,100. 
D) $202,600.

Question 20

Which of the following is true?

Accepted Answer

A) Income from operations would increase other income. 
B) Income before income taxes would be shown as a component of operating income on the income statement. 
C) Gains and losses on the sales of investments are included in nonoperating income (loss). 
D) Income tax expense is shown as part of operating expenses.

Exam 5: Communicating and Interpreting Accounting Information

Which of the following is an objective of the external audit of a company's financial statements?

Intangible assets are reported on the balance sheet as noncurrent assets and include goodwill.

Brimmel Corp.has provided the following information: Sales were $780,000; Cost of goods sold was $429,000; Net income was $195,000. What was Brimmel's gross profit percentage?

Intangible assets are reported on the balance sheet as a current asset.

The form 10-K is the annual report that publicly traded companies must file with the Securities & Exchange Commission (SEC).

Which of the following tasks is not performed by the Securities & Exchange Commission (SEC) ?

The Financial Accounting Standards Board (FASB)oversees the work of the Public Company Accounting Oversight Board (PCAOB).

Which of the following does not increase the net profit margin ratio?

The Securities & Exchange Commission requires publicly traded companies to have their financial statements audited by their internal auditors.

Which of the following transactions will decrease both the return on assets ratio and the total asset turnover ratio?

Which of the following transactions results in a decrease in the return on assets ratio?

Harley Company has provided the following selected financial information. -What is Harley's 2019 net profit margin (rounded) ?

Which one of the following statements is true when a company sells inventory costing $800 for $1,400 cash,and operating expenses are $500?

Which of the following is true?