Info
Warning
Danger

Study Resources (Accounting)

1.2   Learning Objective 1-2 1) Which of the following will be recorded in the owner's equity column as an increase? A) An exchange of assets B) The purchase of an asset on credit C) An investment by the owner D) A withdrawal by the owner 2) The purchase of supplies for cash would affect which account.
4 Views
View Answer
16) Which of the following groups of accounts have a normal debit balance? A) Revenue, liabilities, and capital B) Assets, capital, and withdrawals C) Liabilities, expenses, and assets D) Assets, expenses, and withdrawals 17) The ledger is: A) a group of accounts that records data from business transactions. B) a tool used to make sure that all.
3 Views
View Answer
31) Which of the following transactions would cause an asset to increase and the owner's equity to increase? A) The owner invested cash in the business. B) The business incurred an expense on credit. C) The business bought supplies on account. D) The owner withdrew cash from the business. 32) Which of the following would.
4 Views
View Answer
13.6   Learning Objective 13-6 1) Economic value added (EVA) can be computed as net income minus interest expense minus capital charge. 2) The cost of capital is a weighted average of the returns demanded by the company's stockholders and lenders. 3) Economic value added is a measure of change in corporation's total assets. 4).
2 Views
View Answer
11) The ratio that uses weighted-average number of shares of common stock outstanding in the denominator is the: A) earnings per share. B) gross profit percentage. C) price-earnings ratio. D) current ratio. 12) Earnings per share (EPS) is calculated as: A) the number of shares of common stock outstanding at the end of the year divided.
3 Views
View Answer
13.5   Learning Objective 13-5 1) A firm's ability to pay current liabilities can be evaluated using working capital and the current ratio. 2) A company's debt ratio is computed as total assets minus total liabilities. 3) A ratio analysis, horizontal analysis, and vertical analysis are all financial analysis tools. 4) The acid-test ratio reflects.
2 Views
View Answer
31) Withdrawals are considered an expense of doing business. 32) When expenses are greater than revenue, net loss is the result. 33) The four parts of owner's equity include capital, liabilities, revenue, and expenses. 34) Cash withdrawals by the owner increase both equity and assets. 35) Cash investments by the owner increases both equity.
4 Views
View Answer
1.4   Learning Objective 1-4 1) The increase or decrease in the owner's equity is reported on the: A) income statement. B) statement of owner's equity. C) balance sheet. D) All of these are correct. 2) Which financial statement is prepared first? A) Statement of Owner's Equity B) Balance Sheet C) Income Statement D) None of the above 3) The financial statement.
2 Views
View Answer
21) Eileen's Corner Shoppe purchases a new computer for cash. This causes: A) Cash and Capital to increase. B) Computer Equipment and Cash to increase. C) Computer Equipment to increase and Cash to decrease. D) Accounts Payable to increase and Capital to increase. 22) Bob purchased a new computer for the company on account. The.
3 Views
View Answer
11) Ratios that test liquidity include all of the following EXCEPT: A) acid-test ratio. B) current ratio. C) debt to total assets. D) inventory turnover. 12) To compute operating income (profit) percentage, divide: A) sales by cost of goods sold. B) gross profit by net sales. C) net income by stockholders' equity. D) operating income by net sales. 13) A.
3 Views
View Answer
13.2   Learning Objective 13-2 1) When comparing companies of different sizes, vertical analysis would be a useful tool. 2) When performing vertical analysis of an income statement, net income is usually used as the base. 3) The relationship of each individual asset as a percentage of total assets is an example of vertical.
3 Views
View Answer
12.4   Learning Objective 12-4 1) Under the direct method of preparing the statement of cash flows, the major source of cash receipts is cash received from the sale of property, plant and equipment. 2) When preparing the statement of cash flows for operating activities by the direct method, each item on the.
3 Views
View Answer
21) Rocket, Corporation reports a $17,000 increase in Inventory and a $30,000 increase in Accounts Payable for the year. If the cost of purchases totaled $400,000 for the year, the cash paid to Rocket's suppliers is: A) $447,000. B) $430,000. C) $370,000. D) $353,000. 22) Under the direct method of preparing the statement of cash.
4 Views
View Answer
1.1   Learning Objective 1-1 1) The type of business organization that can continue indefinitely is known as a: A) sole proprietorship. B) partnership. C) corporation. D) None of the above 2) The purpose of the accounting process is to provide financial information about: A) sole proprietorships. B) small businesses. C) large corporations. D) All of these answers are correct. 3) Accounting.
9 Views
View Answer
2.2   Learning Objective 2-2 1) An accounting device used to record increases and decreases in individual assets, liabilities, capital, revenue, expenses, and withdrawals is a(n): A) chart of accounts. B) account. C) trial balance. D) footing. 2) A compound entry is: A) a transaction involving more than one debit and/or credit. B) used to prepare the trial balance. C).
3 Views
View Answer
11) Period to period percentage change in comparative financial statements is often called: A) benchmarking. B) horizontal analysis. C) vertical analysis. D) common-size statements. 12) The primary focus of horizontal analysis is: A) percentage changes in comparative financial statements. B) the balance sheet only. C) the changes in individual financial statement amounts as a percentage of some related.
5 Views
View Answer
23) On January 1, 2012, Vanderbilt Corporation had 500,000 shares of $1 par value common stock outstanding and 25,000 shares of 5%, $100 par value preferred stock outstanding. There were no stock transactions during the year. Net income for the year was 429,000. Compute the earnings per share (to the.
3 Views
View Answer
13.1   Learning Objective 13-1 1) Vertical analysis highlights changes in financial statement balances from period to period. 2) The best way to analyze a company is by examining the financial data for several years. 3) Trend percentages are computed only for balance sheet items. 4) It is generally considered more useful to know the.
9 Views
View Answer
13.4   Learning Objective 13-4 1) As another analytical tool, analysts rely on the statement of cash flows as a predictor of eventual success for a given company. 2) The statement of cash flows is helpful for spotting weaknesses as well as gauging success. 3) On the statement of cash flows of a healthy.
2 Views
View Answer
29) Prepare a vertical analysis for Winkler Corporation using the information shown below (round percentages to the nearest one-tenth percent): 2012 Sales $450,000 Cost of goods sold 200,000 Gross profit 250,000 Operating expenses 118,000 Net income 132,000 30) Prepare a vertical analysis for Crestwood Corporation's balance sheet to determine the component percentages of its assets, liabilities, and stockholders' equity. Round percentages to.
4 Views
View Answer
12.1   Learning Objective 12-1 1) The statement of cash flows is presented for a period of time. 2) The statement of cash flows is an optional statement that can be prepared along with the income statement, balance sheet, and statement of retained earnings. 3) The statement of cash flows shows the relationship of.
9 Views
View Answer
21) Cash received from customers would be reported on the statement of cash flows under: A) financing activities. B) investing activities. C) operating activities. D) noncash activities. 22) Cash received from the issuance of bonds would be reported on a statement of cash flows under: A) investing activities. B) financing activities C) operating activities. D) noncash activities. 23) Where would.
2 Views
View Answer
11) An increase in Interest Payable during the reporting period indicates that cash paid for interest exceeded Interest Expense on the income statement. 12) The direct method of preparing the statement of cash flows: A) reports where cash came from and how it was spent on operating activities. B) is used by a.
3 Views
View Answer
12.2   Learning Objective 12-2 1) Most of the time, net income will be the same as cash flows from operating activities. 2) The statement of cash flows classifies cash receipts and payments as operating, nonoperating, and financial activities. 3) Of the three types of business activities reported on a statement of cash flows,.
3 Views
View Answer
11) The statement of owner's equity is the link between the income statement and balance sheet. 12) The income statement is the first financial statement completed. 13) Calculate the total Liabilities if the company has: Assets totaling $700 and Capital of $450. 14) Calculate the total Assets if the company has: Cash $200,.
3 Views
View Answer
11) All critical investing and financing activities will affect cash. 12) The three types of activities reported on the statement of cash flows are: A) operating, investments, and financing. B) operating, investing, and free flow. C) operating, investing, and financing. D) operating, indirect, and direct. 13) The three sections contained in the statement of cash flows.
2 Views
View Answer
2.1   Learning Objective 2-1 1) A chart of accounts: A) is set up in alphabetical order. B) includes account balances. C) is a listing of all the accounts used by a company. D) All of the above are correct. 2) Accounts Payable had a normal starting balance of $800. There were debit postings of $600 and.
9 Views
View Answer
31) Accounts Receivable has a normal balance of $1,100. After collecting $800, the balance in the account is: A) debit $300. B) debit $1,900. C) credit $300. D) credit $1,900. 32) The beginning balance in Cash was $3,500. Additional cash of $2,000 was received. Checks were written totaling $2,500. The cash balance is: A) $2,000. B) $6,000. C).
4 Views
View Answer
11) If total liabilities are $18,000 and owner's equity is $21,000, the total assets must be: A) $39,000. B) $5,000. C) $20,000. D) $17,000. 12) If total liabilities are $1,000 and total assets are $8,000, owner's equity must be: A) $7,000. B) $3,000. C) $10,000. D) $13,000. 13) How does the purchase of office equipment on account affect the accounting.
3 Views
View Answer
21) Given the following data: Current liabilities $450,000 Noncurrent liabilities 650,000 Stockholders' equity 500,000 In vertical analysis, current liabilities would be expressed as: A) 356%. B) 90%. C) 111%. D) 28%. 22) In performing a vertical analysis, the base for sales returns and allowances is: A) sales discounts. B) sales. C) gross profit. D) net sales. 23) In performing a vertical analysis, the base for cost of.
3 Views
View Answer
11) If 'Ol Fashioned Toys' revenues are greater than its expenses during the accounting period: A) assets will increase more than liabilities. B) liabilities will increase more than assets. C) the business will incur a loss. D) the business will earn a net income. 12) Carrie billed her legal clients $6,000 for legal work completed.
3 Views
View Answer
1.3   Learning Objective 1-3 1) The net income or net loss is calculated on the: A) balance sheet. B) statement of owner's equity. C) income statement. D) none of these. 2) Owner's withdrawals: A) decrease assets. B) increase expenses. C) increase liabilities. D) decrease withdrawals. 3) Go Blue Retail Store collected $12,000 of its accounts receivable. The expanded accounting equation changes.
3 Views
View Answer
38) Various transactions of Plymouth Corporation are shown below: 1.Bonds payable are issued for cash at a premium. 2.Equipment is sold for cash at book value. 3.Land is purchased by signing a 5-year, 8% note payable. 4.1,000 shares of ABC Corporation's common stock are purchased for cash. 5.The conversion option is utilized and bonds payable.
2 Views
View Answer
12.3   Learning Objective 12-3 1) The change in total assets is the "check figure" for the statement of cash flows. 2) A gain on sale of equipment is subtracted from net income when determining cash provided by operations under the indirect method. 3) Only the balance sheet is used to prepare the statement.
2 Views
View Answer
31) On the statement of cash flows, in which section would the purchase of land appear? A) Operating activities B) Investing activities C) Financing activities D) Noncash activities 32) Which of the following would be reported on a statement of cash flows as a financing activity? A) Sale of equipment B) Amortization expense C) Collection of notes receivable D).
3 Views
View Answer
11.6   Learning Objective 11-6 1) It is management's responsibility to issue a report on internal control. 2) Publicly traded companies have the option to produce audited financial statements. 3) Publicly traded companies have to file their financial statements with the IRS. 4) An audit report is addressed to the board of directors and stockholders.
4 Views
View Answer
13.3   Learning Objective 13-3 1) Common-size financial statements report only dollar amounts. 2) Benchmarking is the process of comparing a company to standards set by the leading company in the industry. 3) A common-size statement is less effective than a horizontal analysis when comparing companies. 4) Common-size financial statements are particularly valuable for identifying.
3 Views
View Answer
11.5   Learning Objective 11-5 1) Items of comprehensive income, other than net income, do not enter into the determination of earnings per share. 2) Comprehensive income is the company's change in total stockholders' equity from all sources other than from the owners of the business. 3) Comprehensive income does not include foreign-currency translation.
3 Views
View Answer
11) Generally Accepted Accounting Principles are the procedures and guidelines that must be followed during the accounting process. 12) The function of accounting includes analyzing, recording, classifying, summarizing, reporting, and interpreting financial information. 13) A sole proprietorship ends with the death of the owner. 14) Put the 7 main steps of the accounting.
5 Views
View Answer
21) Which accounts are affected when the company buys supplies on account? A) Assets and Capital B) Liabilities and Capital C) Assets and Liabilities D) None of the above are correct. 22) Which accounts are affected when the company provides services to a cash customer? A) Assets and Capital B) Liabilities and Capital C) Assets and Revenue D) None.
4 Views
View Answer
11) In an efficient market, an investor's search for "underpriced" stock will be unsuccessful unless the investor has knowledge of confidential information. 12) The cost of capital is defined as the: A) sum of liabilities and stockholders' equity accounts. B) weighted average of the returns demanded by the company's stockholders and lenders. C) rate.
6 Views
View Answer