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Study Resources (Accounting)

15.8   Questions 1) Most companies that follow accrual basis accounting recognize revenue after they ________. A) receive cash from the customer B) deliver goods or perform services C) pay cash for operating expenses D) provide warranty service on a product 2) One of the limitations of the balance sheet is that the dollar amounts for different.
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17.2   Questions 1) An investor that has effective control over an investee usually owns ________ of the investee's stock. A) less than 20 percent B) more than 20 percent C) more than 40 percent D) more than 50 percent 2) The company that owns 100 percent of another company's stock is called the ________.  The company.
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11) The cash received from the sale of investment securities is included in the ________ section of the statement of cash flows. A) operating B) financing C) investing D) noncash 12) The cash received from the sale of equipment is included in the ________ section of the statement of cash flows. A) operating B) financing C) investing D) noncash 13).
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27) Josephine Company had net income of $21,850 for the year ended December 31, 2015.  Additional information from the income statement follows: Depreciation expense$8,400 Interest expense3,900 Income tax expense5,700 The company also reported the following balances: DecemberDecember 31, 2014                  31, 2015 Accounts receivable$10,000$11,800 Accounts payable$20,000$23,200 Income taxes payable$22,000$21,300 Inventory$30,000$25,000 Required: Prepare the operating activities section of the statement of cash flows for the.
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  15.1   Questions 1) The income statement summarizes a company's financial performance ________ and the balance sheet shows a company's financial position ________. A) at a point in time; over a period of time B) at a point in time; at a point in time C) over a period of time; over a period of.
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14.8   Questions 1) In process costing, goods are moved from the Assembly Department to the Packaging Department.  Costs incurred in the Assembly Department for the goods received by the Packaging Department are called ________ by the Packaging Department. A) equivalent units B) finished goods C) transferred-in costs D) factory overhead applied 2) The weighted-average method of.
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21) The balance sheet is not linked to the income statement. 22) The income statement measures performance over a given amount of time. 23) Revenue and expense accounts are permanent stockholders' equity accounts. 24) Given below are the daily balances in the accounts of Superior Company.  Assume one transaction occurs each day.  Explain.
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16.8   Questions 1) The major operating activity on the statement of cash flows that increases cash is ________. A) sales on account B) proceeds from sale of common stock C) proceeds from issue of bonds payable D) collections from sales to customers 2) The major operating activity on the statement of cash flows that decreases cash.
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21) In process costing, the journal entry to transfer completed units from Department A to Department B would include a ________. A) credit to Direct Materials Inventory B) debit to Work-in-Process Inventory, Department A C) credit to Work-in-Process Inventory, Department B D) debit to Work-in-Process Inventory, Department B 22) The first step in process costing.
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16.3   Questions 1) Preferred stock has priority over common stock in ________. A) voting rights B) electing the board of directors C) payment of dividends D) none of the above 2) Treasury stock is shown on the balance sheets as a deduction from ________. A) total assets B) total liabilities C) total current assets D) total stockholders' equity 3) Peace Company's.
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15.3   Questions 1) A deficiency of cash-basis accounting is ________. A) it omits key revenues and expenses from the balance sheet B) it fails to match revenues and expenses to measure economic performance C) it omits key assets and key liabilities from the income statement D) it fails to provide an income statement 2) The cash.
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11) The activity of Reno Company for the month of April is given below: Cash purchases of inventory$25,000 Credit purchases of inventory$50,000 Cash payment for credit purchases of inventory$22,000 Cash dividend paid$7,000 Wages earned and paid$14,000 Wages earned and unpaid$2,000 Rent paid for April, May and June$6,000 Using the cash basis of accounting, the total expenses for Reno.
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  17.1   Questions 1) Consolidated financial statements combine the books of two or more ________ into one set of financial statements. A) subsidiaries B) divisions C) separate legal entities D) segments 2) Dividends received from trading securities are reported by the investor as ________. A) an increase in the investment account B) a decrease in the investment account C) dividend.
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  16.1   Questions 1) Cash as listed on the balance sheet includes ________. A) prepaid insurance B) long-term investments in corporate bonds C) temporary investments in marketable securities D) bank deposits in checking accounts 2) Current assets are expected to be converted to cash or sold or consumed within ________. A) one year or operating cycle if longer.
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11) Intangible assets are ________. A) assets with a physical presence B) assets that can be seen and touched C) rights to expected future benefits D) assets with definite lives only 12) In accounting terms, what is goodwill? A) the actions a company takes to foster the development of social responsibility B) the charitable contributions made by.
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16.7   Questions 1) Indiana Company has the following data available: DecemberDecember 31, 2011                  31, 2012 Fixed Assets$125$125 Accumulated Depreciation$110$117 Long-term debt$125$5 Common stock$300$400 Retained earnings$100$120 No dividends were declared or paid for the year ending December 31, 2012. What is the net cash flow from financing activities for the year ended December 31, 2012? A) $20 cash inflow B) $20 cash outflow C) $100.
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17.4   Questions 1) To compare companies that differ in size, analysts use ________. A) MD&A B) 10-K filings with the Securities and Exchange Commission C) common size financial statements D) the market-value method for investments 2) To prepare common size income statements, percentages for line items are usually based on ________.  To prepare common size balance.
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15.10   Questions 1) Yesterday Company's accountant recorded a debit to Accounts Payable and a credit to Cash.  This transaction will ________. A) increase Cash and decrease Accounts Payable B) decrease Cash and increase Accounts Payable C) increase Cash and increase Accounts Payable D) decrease Cash and decrease Accounts Payable 2) Mr. Bryan invested $50,000 cash in.
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15.2   Questions 1) Cash collections of Accounts Receivable will increase ________ and decrease ________. A) Accounts Receivable; Accounts Payable B) Accounts Payable; Accounts Receivable C) Cash; Accounts Payable D) Cash; Accounts Receivable 2) On January 1, 2010, a company paid $3,000 for rent.  The payment covers the period January 1, 2010 through June 30, 2010.  On.
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11) Tide Company manufactures greeting cards.  Material is introduced at the beginning of the process in the Printing Department.  Conversion costs are applied uniformly throughout the process.  The weighted-average method of product costing is used.  Data for the Printing Department for the month of September follow: Work-in-process inventory, September 1: Units22,500 Direct materials(100%.
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11) Backflush costing has no work-in-process inventory account. 12) Some backflush costing systems eliminate the finished goods inventory account. 13) Backflush costing is most useful for companies with low inventory levels and short production cycles. 14) Sparky Company manufactures aircraft parts.  A backflush costing system is used and standard costs for the part.
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21) Freight and installation costs are added to the cost of equipment. 22) Accelerated depreciation methods are the most popular depreciation methods for financial statement purposes. 23) Leasehold improvements are amortized annually. 24) Some intangible assets are depreciated. 25) Goodwill is a tangible asset. 26) Research and development costs are expensed when incurred for financial.
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16.2   Questions 1) Current liabilities are debts due within the ________ year or within the normal operating cycle if ________. A) past; longer than a year B) next; longer than a year C) past; shorter than a year D) next; shorter than a year 2) Unsecured debt consists of ________. A) debentures B) mortgage bonds C) preferred stock D) common.
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11) The ownership claim arising from the reinvestment of previous profits is called ________. A) net assets B) stockholders' equity C) investment income D) retained earnings 12) In a corporation, stockholders' equity has two parts called ________ and ________. A) dividends; net profit B) paid in capital; dividends C) net profit; retained earnings D) paid-in capital; retained earnings 13) Amounts.
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15.7   Questions 1) A sole proprietorship has ________ owner's equity account(s).  A partnership with three partners has ________ owners' equity account(s). A) one; one B) two; one C) one; three D) one; four 2) The distinction between paid-in capital and retained earnings is not made for ________. A) corporations B) corporations and partnerships C) corporations and sole proprietorships D) partnerships.
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11) Preferred stockholders receive cash dividends before common stockholders. 12) A company's treasury stock is outstanding but not issued. 13) A company does not pay cash dividends on treasury stock. 14) The following balances are available for Nancy Company on December 31, 2015: Accumulated depreciation$21,800 Accounts payable11,200 Accounts receivable9,800 Additional paid-in capital24,000 Common stock6,000 Cash7,400 Fixed assets89,400 Interest payable2,400 Inventory13,600 Long-term notes payable28,000 Prepaid.
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11) Austin Company reported cost of goods sold of $700,000, a decrease in inventory of $60,000, and an increase in accounts payable of $35,000.  How much cash was paid to suppliers? A) $605,000 B) $675,000 C) $725,000 D) $795,000 12) Colorado Company reported cost of goods sold of $650,000.  Beginning inventory was $150,000 and ending.
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11) Highlighter Company manufactures phones in a two-department process that involve Assembly and Finishing.  The Assembly Department reported the follow data for the past month: Direct materials added$336,000 Direct labor460,800 Factory overhead230,400 Total costs to account for$1,027,200 Units started80,000 Units completed and transferred67,200 Units not complete12,800 Units in beginning inventory0 The partially complete units at the end of the.
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16.6   Questions 1) Which of the following statements about the cash flow statement is FALSE? A) The cash flow statement shows the relationship between net income and changes in the cash balance. B) The cash flow statement determines a company's ability to pay its debts when they are due. C) The cash flow statement.
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14.7   Questions 1) SSS Company produces calendars in a one-department process.  The following data is available for the past month: Work-in-process inventory, beginning0 Units started15,000 Units completed and transferred12,000 Units in ending inventory3,000 Direct materials added$30,000 Direct labor$20,700 Factory overhead costs$10,350 The units in process at the end of the month are 100 percent complete with respect to materials.
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15.9   Questions 1) The ________ assumption implies that a company will continue to use existing resources and pay existing liabilities at maturity in an orderly manner. A) conservatism B) relevance C) going concern D) materiality 2) The accounting convention of ________ means selecting the method of measurement that provides the most pessimistic immediate results. A) cost benefit B).
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16.9   Questions 1) Why do accountants add Depreciation Expense to net income when determining net cash provided by operating activities? A) because depreciation expense is a source of cash B) because depreciation expense requires the outflow of cash C) because depreciation expense is an investing activity that should be reported in the investing section.
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16.4   Questions 1) Which of the following statements about multiple-step income statements is FALSE? A) A multiple-step income statement has a subtotal for gross profit and operating profit. B) A multiple-step income statement groups all the expenses together. C) A multiple-step income statement has different measures of profits. D) A multiple-step income statement has a.
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15.5   Questions 1) In order for the board of directors of a corporation to declare a cash dividend, there must be sufficient ________ and ________. A) revenues; expenses B) net income; cash C) retained earnings; cash D) revenues; cash 2) Cash dividends are a distribution of ________ to ________. A) profits; creditors B) revenues; owners C) retained earnings; claimants D).
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21) Rent paid in advance would be considered to be a prepaid asset by the renter. 22) Companies must write-off research and development costs as expenses immediately. 23) When depreciating a fixed asset, the residual value is not considered. 24) Depreciation applies to assets such as accounts receivable and equipment. 25) Land is depreciated.
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11) Soley Company has the following data available: Retained Earnings, January 1, 2011$12,000 Net income for the year ending December 31, 2011$3,000 Dividends declared in 2011$2,000 Paid-in Capital, January 1, 2011$50,000 Total liabilities, January 1, 2011$40,000 What is the retained earnings balance on December 31, 2011? A) $12,000 B) $13,000 C) $14,000 D) $63,000 12) A multiple-step income statement includes a.
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16.5   Questions 1) The statement of changes in stockholders' equity shows the changes in ________. A) retained earnings only B) dividends only C) each of the stockholders' equity accounts D) fixed assets only 2) Fred Company had the following data available: Paid-in capital, December 31, 2014$43,000 Retained earnings, December 31, 2014$27,000 Net income for the year ended December 31,.
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11) How do accountants recognize revenue? A) by recording it in the accounting records B) by reporting it on the financial statements C) by waiting for the collection of cash from the revenue D) by applying the materiality principle 12) Increases in revenues ________ stockholders' equity.  Increases in expenses ________ stockholders' equity. A) decrease; increase B) increase;.
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17.3   Questions 1) On January 1, 2012, a parent company acquired all of the stock of a subsidiary.  The following data is available: Parent Company                Subsidiary Total assets$650$400 Total liabilities$200$190 Total stockholders' equity$450$210 The acquisition by the parent company represents a 100 percent interest in the subsidiary.  On January 1, 2012, the fair value of the subsidiary's.
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15.6   Questions 1) The link between the balance sheet and the income statement is the ________. A) statement of cash flows B) schedule of cost of goods sold C) statement of changes in retained earnings D) schedule of outstanding accounts receivable 2) A multiple step income statement ________. A) lists all the expenses together and calculates a.
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20) The sections of the statement of cash flows are listed below: Sections of Statement of Cash Flows O = Operating activities I = Investing activities F = Financing activities Required: For each of the following items, identify the section of the statement of cash flows you would find the item.  Assume the direct method is.
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11) Presented below is the balance sheet of Hal Company at January 1, 2015: Cash$100 Net Fixed Assets400 Total Assets$500 Accounts Payable$20 Long-term Bonds Payable220 Stockholders' Equity260 Total Liabilities and Stockholders' Equity$500 The balance sheet of Monty Company at January 1, 2015 is below: Cash$400 Net Fixed Assets380 Total Assets$780 Accounts Payable$120 Long-term Bonds Payable280 Stockholders' Equity380 Total Liabilities and Stockholders' Equity$780 On January 1, 2015,.
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11) Marketable securities that the investor company does not intend to sell in the near future are called ________. A) trading securities B) options C) available-for-sale securities D) marketable securities 12) Jeff Company purchased common stock in Garcia Company.  Jeff Company treats the investment as available-for-sale securities.  During the current year, Garcia Company earned $4,000,000.
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14.9   Questions 1) Which of the following statements about backflush costing is FALSE? A) Backflush costing only has one category of costs that is conversion costs. B) Backflush costing does not have a Work-in-Process Inventory account. C) Some backflush costing systems eliminate the Finished Goods Inventory account and transfer costs directly to Cost of.
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11) The financial ratios for a company can be evaluated using ________. A) time-series comparisons B) benchmark comparisons C) cross-sectional comparisons D) all of the above 12) Comparing a company's debt-to-equity ratio for 2010 to the debt-to-equity ratios for 2010 from other companies in the same industry is called a(n) ________. A) time-series comparison B) benchmark comparison C).
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