Question 1

Identify the appropriate financial statement for each of the items listed below.Some items may be found on more than one financial statement.
a.Balance sheet
b.Income statement
c.Statement of changes in shareholders' equity
d.Statement of cash flows
_____ 1.Cash paid for supplies
_____ 2.Net income
_____ 3.Sales revenue
_____ 4.Rent expense
_____ 5.Inventory
_____ 6.Retained earnings
_____ 7.Cash received from customers
_____ 8.Cash

Accepted Answer

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Question 2

On December 31,2012,Twisted Pretzel was told by an appraiser that its land,which cost $100,000,was worth $120,000.Under IFRS,Twisted Pretzel would be allowed to: show the land on its financial statements as ________.

Accepted Answer

A) an expense of $100,000 on the income statement 
B) an expense of $120,000 on the balance sheet 
C) an asset of $120,000 on the income statement 
D) an asset of $120,000 on the balance sheet

Question 3

The set of rules that a U.S.company must follow when preparing its financial statements is called ________.

Accepted Answer

A) generally accepted accounting principles 
B) internal revenue code 
C) internal control procedures 
D) internally accepted accounting principles

Question 4

Revenue minus expenses equals gross profit.

Accepted Answer

A) True 
 B)False

Question 5

The three basic elements of the balance sheet are ________.

Accepted Answer

A) operating activities,investing activities,and financing activities. 
B) assets,liabilities,and shareholders' equity 
C) revenues,expenses,and net income or loss 
D) retained earnings,net income,and dividends

Question 6

South Seas reported the following items on its financial statements.Determine the amount of cost of goods sold.

Accepted Answer

The answer of South Seas reported the following items on...

Question 7

Maids-R-Us had current assets of $1,160 and total assets of $2,640.It had $650 in accounts payable and a note payable for $1,500 due in two years.The current ratio (rounded)was ________.

Accepted Answer

A) 1.23 
B) 1.78 
C) 0.54 
D) 0.81

Question 8

Team Shirts purchased T-shirts in July.The T-shirts were sold to customers in August.Team Shirts received the final cash payments in September.According to the revenue-recognition principle,when should revenue be recorded?

Accepted Answer

A) July 
B) August 
C) September 
D) both August and September

Question 9

Vestige,Inc.needs another loan from a bank in order to pay its bills.In order to improve its chances of getting another loan,it reports its ten-month note payable as a long-term liability.Discuss the treatment of this note payable including the financial statement presentation and the effect on the current ratio.Discuss the ethical issue with Vestige's treatment of this note payable.

Accepted Answer

The answer of Vestige,Inc.needs another loan from a bank in...

Question 10

Generally accepted accounting principles (GAAP)________.

Accepted Answer

A) are a set of rules that a U.S.company must follow when preparing its financial statements 
B) are accounting rules determined by the IRS 
C) are accounting rules required by the U.S.government for all businesses to follow 
D) are issued by the International Accounting Standards Board

Question 11

Is ________.

Accepted Answer

A) 0.68 
B) 1.61 
C) 0.35 
D) 0.71

Question 12

The economic resources of a company resulting from past transactions are called ________.

Accepted Answer

A) assets 
B) revenues 
C) retained earnings 
D) contributed capital

Question 13

Prepaid insurance is ________.

Accepted Answer

A) an accrual 
B) a deferral 
C) insurance expense 
D) a liability

Question 14

Team Shirts has $200 in its Prepaid insurance account on June 30.This amount is for insurance for July and August.It represents a ________.

Accepted Answer

A) current asset 
B) long-term asset 
C) current liability 
D) long-term liability

Question 15

South Seas reported the following items on its financial statements.Determine the amount of the missing operating expenses.

Accepted Answer

The answer of South Seas reported the following items on...

Question 16

Evaluate the following information for Team Shirts.
Part A: Calculate the current ratio for Team Shirts.(Round to two decimal places.)
Part B: Is the ratio acceptable or unacceptable?
Part C: Advise Team Shirts how to improve the ratio.

Accepted Answer

The answer of Evaluate the following information for Team Shirts.
Part...

Question 17

Busy Beaver,Inc.purchased land ten years ago for $30,000.At December 31,2012,similar land has been appraised at $50,000.Answer the following questions:
1.At what amount should land be reported on the balance sheet under U.S.GAAP?
2.Which basis is more reliable,historical cost,$30,000,or fair market value,$50,000?
3.Which basis is more relevant,historical cost,$30,000,or fair market value,$50,000?
4.How might the land be reported using IFRS?

Accepted Answer

The answer of Busy Beaver,Inc.purchased land ten years ago for...

Question 18

Contributed capital is also called ________.

Accepted Answer

A) paid-in capital 
B) retained earnings 
C) investments 
D) non-current liabilities

Question 19

Which of the following statements is TRUE?

Accepted Answer

A) The IASB is the current standards setting body for the U.S.accounting profession. 
B) The FASB determines U.S.generally accepted accounting principles. 
C) Applying IFRS will require much less judgment and interpretation than following U.S.GAAP. 
D) The IRS determines generally accepted accounting principles.

Question 20

Identify each of the following items as either an accrual or deferral.
a.Accrual
b.Deferral
_____ 1.Account receivable
_____ 2.Account payable
_____ 3.Prepaid insurance
_____ 4.Interest receivable
_____ 5.Prepaid advertising

Accepted Answer

The answer of Identify each of the following items as...

Exam 2: Qualities of Accounting Information

On December 31,2012,Twisted Pretzel was told by an appraiser that its land,which cost $100,000,was worth $120,000.Under IFRS,Twisted Pretzel would be allowed to: show the land on its financial statements as ________.

The set of rules that a U.S.company must follow when preparing its financial statements is called ________.

Revenue minus expenses equals gross profit.

The three basic elements of the balance sheet are ________.

South Seas reported the following items on its financial statements.Determine the amount of cost of goods sold.

Maids-R-Us had current assets of $1,160 and total assets of $2,640.It had $650 in accounts payable and a note payable for $1,500 due in two years.The current ratio (rounded) was ________.

Team Shirts purchased T-shirts in July.The T-shirts were sold to customers in August.Team Shirts received the final cash payments in September.According to the revenue-recognition principle,when should revenue be recorded?

Generally accepted accounting principles (GAAP) ________.

Is ________.

The economic resources of a company resulting from past transactions are called ________.

Prepaid insurance is ________.

Team Shirts has $200 in its Prepaid insurance account on June 30.This amount is for insurance for July and August.It represents a ________.

South Seas reported the following items on its financial statements.Determine the amount of the missing operating expenses.

Evaluate the following information for Team Shirts. Part A: Calculate the current ratio for Team Shirts.(Round to two decimal places.) Part B: Is the ratio acceptable or unacceptable? Part C: Advise Team Shirts how to improve the ratio.

Contributed capital is also called ________.

Which of the following statements is TRUE?

Identify each of the following items as either an accrual or deferral. a.Accrual b.Deferral ___ 1.Account receivable _ 2.Account payable _ 3.Prepaid insurance _ 4.Interest receivable ___ 5.Prepaid advertising

Exam 2: Qualities of Accounting Information

On December 31,2012,Twisted Pretzel was told by an appraiser that its land,which cost $100,000,was worth $120,000.Under IFRS,Twisted Pretzel would be allowed to: show the land on its financial statements as ________.

The set of rules that a U.S.company must follow when preparing its financial statements is called ________.

Revenue minus expenses equals gross profit.

The three basic elements of the balance sheet are ________.

South Seas reported the following items on its financial statements.Determine the amount of cost of goods sold.

Maids-R-Us had current assets of $1,160 and total assets of $2,640.It had $650 in accounts payable and a note payable for $1,500 due in two years.The current ratio (rounded) was ________.

Team Shirts purchased T-shirts in July.The T-shirts were sold to customers in August.Team Shirts received the final cash payments in September.According to the revenue-recognition principle,when should revenue be recorded?

Generally accepted accounting principles (GAAP) ________.

Is ________.

The economic resources of a company resulting from past transactions are called ________.

Prepaid insurance is ________.

Team Shirts has $200 in its Prepaid insurance account on June 30.This amount is for insurance for July and August.It represents a ________.

South Seas reported the following items on its financial statements.Determine the amount of the missing operating expenses.

Evaluate the following information for Team Shirts. Part A: Calculate the current ratio for Team Shirts.(Round to two decimal places.) Part B: Is the ratio acceptable or unacceptable? Part C: Advise Team Shirts how to improve the ratio.

Contributed capital is also called ________.

Which of the following statements is TRUE?

Identify each of the following items as either an accrual or deferral. a.Accrual b.Deferral _____ 1.Account receivable _____ 2.Account payable _____ 3.Prepaid insurance _____ 4.Interest receivable _____ 5.Prepaid advertising

Identify each of the following items as either an accrual or deferral. a.Accrual b.Deferral ___ 1.Account receivable _ 2.Account payable _ 3.Prepaid insurance _ 4.Interest receivable ___ 5.Prepaid advertising