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Study Resources (Accounting)

140) Following is the income statement for Masters Corporation for the year ended December 31, 2010: Masters Corporation Income Statement            For the Year Ended December 31, 2010 Net sales$570,000 Expenses: Cost of goods sold278,500  Selling expenses35,000 General expenses39,300 Interest expense42,000 Income tax expense  35,000 Total expenses 429,800 Net Income$140,200 a) Prepare a vertical analysis of the income statement showing appropriate.
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21) How does the purchase of equipment on account affect the accounting equation? A) Assets increase; liabilities decrease. B) Assets increase; owner's equity increases. C) Assets increase; liabilities increase. D) Liabilities increase; owner's equity decreases. 22) Mary invested cash in her new business. What effect will this have? A) Increase an asset and increase a liability B).
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1.3   Seeing how revenue, expenses, and withdrawals expand the basic accounting equation. 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.
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131) Following is a comparative income statement for Chui Corporation: Chui Corporation Comparative Income Statement For the Years Ended December 31, 2010 and 2009 2010        2009 Net sales$122,000 $120,000 Expenses: Cost of goods sold62,00057,000 Selling and general expenses 20,00012,000 Interest expense12,00014,000 Income tax expense      6,000     7,000 Total expenses 100,000   90,000 Net income $ 22,000$ 30,000 a) Prepare a horizontal.
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1.4   Preparing an income statement, a statement of owner’s equity, and a balance sheet. 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).
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136) State whether the following ratios are classified as:  a) ratios that measure the company's ability to pay current liabilities; b) ratios that measure the company's ability to pay short-term and long-term debt;  c) ratios used to analyze the company's shares as an investment;  d) ratios that measure the company's.
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21) Which accounts are affected when the company buys supplies on account? A) Assets and Capital increase. B) Liabilities and Capital increase. C) Assets and Liabilities increase. 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 increase. B) Liabilities and Capital.
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138) The following information has been taken from the financial statements of Kane Corporation. Kane Corporation has only issued common shares. Net income$ 60,000 Total assets, January 1, 2010500,000 Total liabilities, December 31, 2010 175,000 Net sales900,000 Interest expense20,000 Current assets, December 31, 2010175,000 Current liabilities, December 31, 201075,000 Income tax expense25,000 Total assets, December 31, 2010575,000 Shareholders' equity, January.
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132) Presented below is a comparative balance sheet for VTeck Corporation for 2010 and 2009. Prepare a horizontal analysis of VTeck Corporation's balance sheet.          VTeck Corporation Comparative Balance Sheet December 31, 2010 and 2009          Assets    Current assets20102009 Cash$ 35,000$ 20,000 Accounts receivable (net)35,00025,000 Merchandise inventory45,00040,000 Prepaid expenses   10,000   5,000       Total current assets 125,00090,000 Property, plant and.
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17) Use the following information to prepare 1) an income statement, 2) a statement of owner's equity, and 3) a balance sheet for the month ended March 31, 2013 for Bolthouse Company. J. Bolthouse, Capital (beg.) $2,000 Revenue 900 Expenses 600 Withdrawals 150 Cash 3,000 Equipment 1,000 Accounts Receivable 150 Accounts Payable 2,000 18) Prepare the financial statements for.
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62) Record the following transactions in the basic accounting equation: a. Brian invests $15,000 cash to begin an accounting service. b. The company buys office furniture for cash, $600. c. The company buys additional office furniture on account, $300. d. The company makes a payment on the office furniture, $200. Brian's Accounting Service      ASSETS =.
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129) Selected items from the balance sheet and income statement are shown below for the Carswell Corporation for 2010 and 2009. Calculate the amount of the change and the percentage change for each item. 20102009 Cash$130,000$100,000 Accounts receivable100,000125,000 Merchandise inventory65,00085,000 Accounts payable 62,50050,000 Sales150,000135,000 Cost of goods sold73,50067,500 130) Data for the most recent four fiscal years of.
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2.2   Recording transactions in T accounts according to the rules of debit and credit. 1) An accounting device used to record increases and decreases in individual assets, liabilities, capital, revenue, expenses, and withdrawals is a(n) A) chart of accounts. B) account. C) trial balance. D) footing. 2) A compound entry is A) a transaction involving more than.
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135) Prepare vertical analysis calculations by filling in the far right column of Horizon Corporation's balance sheet with the appropriate percentages: Horizon Corporation       Balance Sheet December 31, 2010 2010Percent           Assets Current assets Cash$ 23,000 Accounts receivable, net40,000 Merchandise inventory57,000 Prepaid expenses    3,000      Total current assets123,000 Property, plant and equipment, net 123,500 Total assets$246,500        Liabilities    Current liabilities Accounts payable$ 69,400 Short-term note.
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55) The three elements that make up a balance sheet are assets, liabilities and expenses. 56) The accounting equation states that total assets must always equal total liabilities plus owner's equity. 57) The parties that have claims against the assets of the business are called creditors and owners. 58) The ending capital figure.
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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 $5,000 for legal work completed.
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143) Following are selected data from the comparative income statement and balance sheet for Owens Corporation for the years ended December 31, 2010, and 2009: Selected Data20102009 Net sales (all on credit)$96,000$93,000 Cost of goods sold51,30052,500 Gross margin44,70040,500 Income from operations16,30015,000 Interest expense3,0003,500 Net income9,8009,000 Cash2,7003,500 Accounts receivable, net10,70012,500 Inventory25,00030,000 Prepaid expenses1,000900 Total current assets39,40046,900 Total long-term assets50,00067,000 Total current liabilities39,00049,500 Total long-term liabilities15,00025,000 Common shares10,000*10,000 Retained.
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  Table 18-1 A company reported $20,000 of net income for 2008, $24,000 for 2009, and $26,000 for 2010. 48) Refer to Table 18-1. The percentage change in net income from 2009 to 2010 was: A) 20.00% B) 30.00% C) 10.00% D) 8.33% 49) Refer to Table 18-1. The percentage change in net income from 2008 to 2009.
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19) Prepare a balance sheet in proper form for Brampton Cleaners for the period ended December 31, 2014. Use the following information: Accounts Payable $2,500 Accounts Receivable 800 Cash 2,200 Equipment 4,000 K. Carson, Capital? 20) Determine the ending capital balance of a business which had a beginning capital balance of $1,970, additional investments of $530,.
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47) Katie's Wedding Planning Service completed the following transactions: a. Billed clients for service, $1,250. b. Completed work for clients who paid $500 cash. c. Received a bill for utilities to be paid later, $120. d. Collected cash on account from clients, $700. e. Paid the amount due for utilities. f. Withdrew $500 cash for personal.
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  Match the following. A) price/earnings ratio B) rate of return on net sales C) debt ratio D) inventory turnover E) day's sales in receivables F) dividend yield G) accounts receivable turnover H) acid-test ratio I) times-interest-earned ratio J) vertical analysis K) common-size statement L) current ratio M) book value per common share N) horizontal analysis O) benchmarking P) rate of return on common shareholders' equity Q) working.
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1.2   Recording transactions in the basic accounting equation. 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) A sample of a liability account.
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133) Horizontal analysis and vertical analysis, including the preparation of common-size financial statements, are important analytical techniques used to evaluate the strength of published financial statements. a) Define: 1) Horizontal analysis 2) Vertical analysis 3)Common-size financial statements b) How is each of these techniques helpful in the analysis of financial statements? 134) The following table shows.
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38) Revenues generate an inflow of assets. 39) Supplies are assets that have a longer life than equipment. 40) The income statement is for a particular date. 41) The income statement is prepared first so the information can be used to prepare the statement of owner's equity. 42) A fiscal year end is not.
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41) Creditors are most concerned with assessing: A) dividends and future share prices B) earnings-per-share C) short-term liquidity D) gross margin percentages 42) Creditors and investors use financial statement analysis to: A) predict the amount of expected returns and assess the risks associated with those returns B) evaluate the company's shares C) evaluate the company's dividend payment record D).
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45) Frances Chang Company completes the following transactions a) Ms. Chang invests $3,500 cash in her company. b) The company purchases equipment on account, $800. c) The company purchases additional equipment for cash, $300. d) The company makes a payment on account for the equipment, $500. Required: Record the above transactions in the basic accounting.
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145) Answer each of the following independent questions. a)How may a company have a high current ratio and still have problems meeting its obligations? b) What does dividend yield measure? c) Identify two external groups of users of accounting information. Are these groups interested in the same characteristics of a company? d) Compare horizontal.
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121) Ratio of average net accounts receivable to one day's sales. Tells how many days sales remain in accounts receivable awaiting collection. 122) A financial statement that reports only percentages 123) Ratio of net credit sales to average net accounts receivable 124) Ratio of total liabilities to total assets 125) Current assets divided by.
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8) Cash is an asset that would appear on the balance sheet 9) The income statement is a financial statement showing business results in terms of revenues and expenses. 10) Statement of owner's equity shows the change in capital. 11) The statement of owner's equity shows assets, liabilities and capital. 12) Total assets are.
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59) Given the following data for total sales: 2007$100,000 2008$110,000 2009$115,000 2010$108,000 A table showing trend percentages for 2007-2010, respectively, using 2007 as the base year would show a(n): A) 8% increase in 2008 B) 15% increase in 2008 C) 6% decrease in 2010 D) 8% increase in 2010 60) When calculating trend percentages, all percentages shown are relative to: A).
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1.1   Defining and listing the functions of accounting. 1) The type of business organization that can continue indefinitely is known as a A) sole proprietorship. B) partnership. C) corporation. D) None of the above 2) The claims of creditors against the assets of a business are A) expenses. B) revenues. C) liabilities. D) assets. 3) Bookkeeping is primarily A) preparing financial reports. B).
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1) Managers use ratios to monitor operations and help make business decisions. 2) The primary reason for conducting financial analysis is to uncover fraud. 3) It is generally considered more useful to know the percentage change in financial statement amounts from year to year than to know the absolute dollar amount of.
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21) A common-size financial statement reports only percentages and no dollar amounts. 22) Benchmarking is the practice of comparing a company for the current year to the same company for the previous year. 23) Financial ratios must use either two balance sheet accounts or two income statement accounts in the same ratio. 24).
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142) Following is a comparative balance sheet for Wong Corporation: Wong Corporation Comparative Balance Sheet December 31, 2010 and 2009      Assets20102009  Current assets Cash$ 12,000$  8,000 Short-term investments7,0009,000 Accounts receivable, net33,00020,000 Merchandise inventory47,00042,500 Prepaid expenses   2,000   3,000 Total current assets101,00082,500 Property, plant, and equipment, net73,40050,000 Intangible assets  29,000  27,500 Total assets $203,400              $160,000     Liabilities  Current liabilities Short-term note payable$ 60,000$ 65,900 Accounts payable  20,000 .
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11) Which is an advantage of a sole proprietorship form of business? A) There is limited personal risk. B) The business can continue indefinitely. C) The owner makes all the decisions. D) All of these answers are correct. 12) Which of the following is not a type of business organization? A) Corporation B) Partnership C) Sole proprietorship D) Operation 13).
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31) Katelyn purchased $10,000 of new electronic equipment for her DJ Company on account. The effect on the basic accounting equation was to A) decrease Cash $10,000 and increase Equipment $10,000. B) increase Equipment $10,000 and increase Accounts Payable $10,000. C) decrease Cash $10,000 and increase Accounts Payable $10,000. D) increase Cash $10,000 and.
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11) The Owner's Equity of Logan's Company is equal to one-quarter of the total assets. Liabilities equal $30,000. What is the amount of Owner's Equity? A) $40,000 B) $10,000 C) $30,000 D) None of these answers are correct. 12) This form shows the financial position of a business on a particular date. A) Income Statement B) Accounting.
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69) If vertical analysis, using total assets as the base, shows that total liabilities have increased from 50% to 63%, this would always mean that: A) the dollar amount of liabilities has increased B) liabilities have increased as a percentage of total assets C) the current ratio has decreased D) the dollar amount of.
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