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92. Refer to Exhibit 4-1. Blue Bell’s current ratio at December 31 was a. 3.67 times b. 2.33 times c. 1.33 times d. 0.43 times 93. Refer to Exhibit 4-1. Blue Bell's accounts receivable turnover for the year was a. 2.2 times b. 26.0 times c. 27.4 times d. 28.9 times 94. Refer to Exhibit 4-1. Blue Bell's return on assets for the year was a. 17.5% b. 20.0% c. 26.9% d. 31.4% 95. Refer to Exhibit 4-1. Blue Bell’s quick.
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64.A list of statements follows: a.____________________ on ____________________ provides a measure of overall company performance for equity shareholders.. b.____________________ is the uncertainty or unpredictability of the future results of a company. c.____________________ ____________________ is the ability of a company to take effective actions to change the amounts and timing of cash flows. d.____________________ is.
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1.The primary purpose of an accounting system is to record, organize. summarize, and report useful information to external financial statement users and stakeholders, as well as to company management, who make operating, investing and financing decisions. a.True b.False 2.The another interpretation of the accounting equation is Assets = Liabilities + Contributed Capital +.
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69.Presented below are five inappropriate accounting procedures that are being used by the Playground Equipment Corporation. a.On the year-end balance sheet, Playground Equipment Corporation reported its inventory at market value, which was greater than cost. As a result of this procedure, a gain was recognized on the company's income statement. b.Mrs. Devlin,.
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126.Events concerning the Ellen Company for 2015 are described below: a. On September 1, 2015, a two-year comprehensive insurance policy was purchased for $2,400. The payment was debited to Prepaid Insurance. b. On December 1, 2015, a customer paid $1,250 in advance for services to be performed in January of 2016. The payment was.
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31.The primary attribute of all assets is a.service potential. b.productive capacity. c.historical cost. d.service contribution. 32.All of the following items would appear on the balance sheet except a.an investment in another company's bonds b.an investment in marketable securities c.a realized gain on the sale of a equipment d.the premium related to a bond liability that is still two years.
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102.When reconciling its accounts, Boris Company found the accounts receivable general ledger account had a balance of $35,000, and the accounts receivable subsidiary ledger account balances totaled $33,000. The most likely reason for this difference was a. a sale to a customer was recorded twice in the subsidiary ledger. b. cash received from a.
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51.Which of the following sets includes only accounting assumptions and conventions? a.timeliness, prudence, historical cost, and neutrality b.matching, comparability, period of time, and faithful representation c.monetary unit, going concern, relevance, and materiality d.monetary unit, entity, going concern, and recognition 52.The use of the historical cost principle is justified because the resulting information has the qualitative.
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149.List the major steps in the accounting cycle. 150.What are the advantages of using the general journal when recording journal entries? 151.What are adjusting entries and why are they necessary? 152.What is the order in which financial statements should be prepared? 153.What are closing entries and why are they necessary? .
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11.When preparing the financial statements the adjusted trial balance is prepared listing all the accounts and associated balances after the closing entries. a.True b.False 12.The purpose of closing entries is to reduce the balance in the temporary (periodic) accounts to zero and to update the Retained Earnings account. a.True b.False 13.Net sales are computed as sales.
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81.Time-series analysis is most closely associated with a.Common-size analysis b.Cross-sectional analysis c.Intracompany comparisons d.Intercompany comparisons 82.Cross-sectional analysis is most closely associated with a.Common-size analysis b.Time-series analysis c.Intracompany comparisons d.Intercompany comparisons 83.A comparison of a company's performance with that of its own past results is known as a.common-size analysis. b.intercompany analysis. c.ratio analysis. d.intracompany analysis. 84.A comparison of a company's performance with that of its competitors.
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71.Explain the difference between comparability and consistency. 72.?Discuss the purpose of the Conceptual Framework. 73.Information about a company helps external users assess the return a company has earned on its economic resources and form expectations about its future performance. In what ways is the information concerning the company’s net income, comprehensive income.
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67.List of principles and assumptions followed by a series of descriptions of inappropriate accounting procedures. a.full disclosure b.historical cost c.revenue recognition d.conservatism e.monetary-unit assumption ____1.The company signs a contract to produce four machines according to the customer's specifications. On the date of the contract, the customer pays one half of the total contract price, and the.
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72.The financial statements are the responsibility of the a. auditors. b. management. c. independent certified accountants. d. Public Accounting Oversight Board. 73.The accountant failed to make the adjusting entry to record the unpaid wages of its employees as of December 31. This error will cause a. an overstatement of assets, liabilities, and shareholders’ equity. b. an understatement of expenses, liabilities, and shareholders’ equity. c. an.
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108. Five methods of measuring values of individual assets are listed below, followed by a series of balance sheet sheet accounts. a. historical cost b. current replacement cost c. fair value d. net realizable value e. present value ? ____ 1. Receivables net of allowance for doubtful accounts ____ 2. Prepaid expenses ____ 3. Investment securities available for sale ____ 4. Patents ____ 5. Raw materials inventory adjusted downward to lower of cost or market ____ 6. Capital lease obligations ____ 7. Financial instruments ____ 8. Property, plant,.
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41.Understandability is a characteristic that is a.a secondary and interactive quality b.a threshold for recognition c.an overall quality d.an enhancing quality 42.The materiality of an item of financial information refers to the likelihood that its omission or misstatement would affect the decisions of those relying on that information and thus make differing choices if the.
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85.Discuss the financial reporting model in the FASB Conceptual Framework. 86.Your CEO has told you that she has little use for accounting figures based on historical costs. She believes that fair values are of far more significance to the board of directors than " out-of-date costs." Required:? Present some arguments to convince her.
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136.McNally Play Company engaged in the following transactions during the month of August: August 4 Purchased $3,000 of merchandise on account, terms 1/10, n/30. McNally records purchases using the gross method.      5 Returned $400 of the merchandise purchased on Aug. 4 because it was defective.     6 Purchased a machine for $5,000. Paid 20% down.
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41.An asset is valued by the price that would be received by selling it in an orderly transaction between market participants on the date of measurement. Which measurement method is being used in this case? a.Fair value b.Historical cost c.Present value d.Reliable value 42.Which of the following statements about fair value is true? a.Level 1 inputs.
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138.December 31 balances for selected accounts of the Chaney Company are presented below. Accounts Receivable $ 500 Sales 2,500 Interest Revenue 750 Dividends 300 Allowance for Doubtful Accounts 100 Salaries Expense 500 Depreciation Expense 400 Unearned Rent 200   Required:Based on the accounts presented above, prepare the appropriate closing entries. .
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76.The FASB and IASB describe four characteristics that enhance the decision usefulness of information that is relevant and faithfully represented. What are these characteristics and provide a brief explanation of each. 77.List five of the important accounting assumptions that have had an impact on the development of generally accepted accounting principles. 78.Describe.
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147.The McNally Company uses cash-basis accounting for its records. During 2015, McNally collected $500,000 from its customers, made payments of $200,000 to its suppliers for inventory, and paid $140,000 for operating costs. McNally wants to prepare accrual-basis financial statements. In gathering information for the accrual-basis financial statements, McNally discovered the.
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128.The following information is from the trial balance of the Basil Herb Company. Accounts Payable $ 234,000 Accounts Receivable 164,000 Accumulated Depreciation—Equipment 225,000 Allowance for Doubtful Accounts 16,500 Bonds Payable 1,000,000 Cash 325,000 Common Stock 60,000 Discount on Bonds Payable 17,100 Equipment 950,000 Insurance Expense 30,000 Interest Expense 16,900 Inventory 300,000 Notes Payable (due 6/1/16) 200,000 Prepaid Rent 90,000 Retained Earnings 824,000 Salaries and Wages Expense 178,000 Salaries and Wages Payable 17,600 Unearned Revenue 15,000 (All of the above accounts have their normal debit or credit balances.)Required: Prepare.
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61.The balances in deferred (unearned) revenue accounts represent amounts that are Earned Collected I. Yes No II. Yes Yes III. No No IV. No Yes a. I b. II c. III d. IV 62.Rental receipts for the period July 1, 2015, through June 30, 2016, were collected on June 30, 2015. The effects of these economic events on the 2015 financial statements for unearned revenue and rent revenue are Unearned Revenue Rent Revenue I. Increase Increase II. Increase Decrease III. Decrease No effect IV. Decrease Increase a. I b. II c. III d. IV 63.An adjusting.
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31.Which of the following is the third major step in the accounting cycle? a.prepare the financial statements b.record the daily transactions in a journal c.prepare and post adjusting entries d.post the journal entries to the accounts in the ledger 32.Which of the following is not a major step necessary to complete the accounting cycle? a.Prepare and.
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132.The following information was taken from the accounting records of Acme Builders at the end of the year. Land $450 Capital stock 900 Inventory 206 Accumulated depreciation-Building 180 Liabilities 250 Cash 32 Allowance for doubtful accounts 14 Retained earnings 264 Accounts receivable ? Building 840   Required:Calculate the amount of gross accounts receivable. .
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31.In order to be relevant, accounting information should have a.timeliness b.verifiability c.confirmatory value d.All of these choices 32.Which of the following fundamental qualitative characteristics may have to be sacrificed in order to achieve timeliness? a.relevance b.verifiability c.comparability d.predictive value 33.What is the ultimate objective of accounting information? a.faithful representation b.decision usefulness c.relevance d.predictive value 34.Which of the following are considered enhancing characteristics of accounting information? a.verifiability.
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144.Manny Corporation has an accounting system that includes five journals: the sales, purchases, cash receipts, cash payments, and general journals. The following transactions occurred during the month of May. ? May 2 Sold merchandise to Tom Smith on account, $80,000, terms 2/10, n/30.    7 Purchased merchandise from the Karen Ruth Company for $11,000, paying.
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81.At lunch recently, two accountants were discussing the merits of the FASB's conceptual framework project, which resulted in the publication of seven Statements of Financial Accounting Concepts and required more than ten years of effort. One accountant thought the effort was a waste of resources, since accounting was unlike physics,.
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51.Long-term investments include all of the following except a.sinking funds. b.cash surrender value of life insurance policies. c.a building held for rental activity. d.bonds payable. 52.Property, plant, and equipment section of the balance sheet includes all of the following except a.construction in progress. b.natural resources. c.intangible assets d.leasehold improvements. 53.Intangible assets include all of the following except a.natural resources. b.licenses. c.goodwill. d.Trademarks 54.What is the.
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82.Which of the following is a sales return? a. A supplier agrees to take back merchandise and provides a full refund. b. A customer returns merchandise for a refund. c. A customer keeps damaged merchandise and the company returns a portion of the selling price. d. A customer pays within the discount period. 83.If the credit subtotal is greater.
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21.A company must make adjustments to the financial statements for certain events that occur after the end of the accounting period. a.True b.False 22.In common-size analysis, all balance sheet items and income statement items are presented as a percentage of total assets. a.True b.False 23.Cross-sectional analysis involves intercompany comparisons. a.True b.False 24.Time-series analysis is the same as rate of.
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161.The accrual basis of accounting is a system that attempts to measure changes intheresources and obligations of the entity,as those changesaffect the accounting equation, regardless of the timing of actual cash flows. ? Required: ? First, describe the timing of revenue and expense recognition under the accrual basis versus the cash basis of accounting..
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71.A component of equity that arises when a parent company owns a majority of the common shares of a subsidiary company is known as a.majority interest. b.noncontrolling interest. c.earned capital. d.unearned capital. 72.Distributions to owners include all of the following except a.paying dividends. b.repurchasing treasury stock. c.giving away fixed assets. d.noncontrolling interests. 73.In preparing a statement of changes in shareholders'.
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159.Special journals, including the sales, purchases, cash receipts, cash payments, and general journals, were discussed in the textbook. Indicate (a) the reasons why special journals may be used, and (b) which transactions would appear in each of the five journals. .
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1.The balance sheet reports the financial position of a company at a specific date in time whereas all other financial statements report changes in the financial position of the company over a period of time. a.True b.False 2.The elements recognized on the balance sheet are assets, liabilities, revenues, and expenses. a.True b.False 3.Equity is defined as.
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62.The primary objective if financial reporting is to provide information that is useful to external decision makers. The following is a list of types of information that are helpful in assessing expected future cash flows and statements describing those types of information.. a.Liquidity b.Operating capability c.Risk d.Return on investment e.Financial Flexibility ______1.The uncertainty of the future.
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11.Long-term investments are listed on the balance sheet at historical cost. a.True b.False 12.Trademarks or acquired brand names are not amortized but are reviewed annually for impairment. a.True b.False 13.All long-term investments are listed on the balance sheet at fair value. a.True b.False 14.Equity of a wholly-owned company is comprised only of contributed capital and earned capital. a.True b.False 15.The SEC requires.
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134.The following are selected account balances for Streamline Services: Selling Expenses $500 Interest Expense 42 Purchases 2,300 Sales 7,900 Accounts Payable 90 Ending Inventory ? Prepaid Insurance 84 Net Sales 7,430 Purchase Discounts 158 Beginning Inventory 300 Sales Returns and Allowances ? Purchase Returns and Allowances 180 Cost of Goods Sold 1,500 Sales Discounts 260   Required:Prepare a partial income statement through gross profit on sales. Do not prepare the heading. .
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61.A list of statements follows: a.Standards are applications of__________and __________ to differing types of transactions. b.__________are specific implementation procedures. c.The intent of the__________ is to establish objectives and fundamental concepts that are the basis for development of financial accounting and reporting guidance. d.__________are the methods and practices that U.S. companies are required to use.
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130.Selected account balances from the December 31, 2015, trial balance of the Gracy Company are listed below: Debit Credit Inventory, January 1, 2015 $12,500 Purchases 25,000 Salaries Expense 5,000 Rent Expense 3,250 General and Administrative Expenses 2,500 Sales $61,000 Dividends Declared 3,500 In addition, the following information is available: · Thecost of the ending inventory at December 31, 2015, is $7,500. · $890 of salaries have accrued as of December 31. · On.
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51.On March 31, 2015, the Turi Company purchased a two-year fire insurance policy. Turi recorded the purchase by debiting Prepaid Insurance and crediting Cash for $10,000. Which of the following adjusting entries should Turi prepare at the end of 2015? a. Prepaid Insurance 3,750 Insurance Expense 3,750 b. Insurance Expense 3,750 Prepaid Insurance 3,750 c. Prepaid Insurance 5,500 Insurance.
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21.Information about comprehensive income is useful to external users for all of the following purposes except a.evaluating management's performance b.examining cash flows for the current period c.predicting future income d.assessing the risk of lending to the company 22.In its "Objectives of Financial Reporting by Business Enterprises" the FASB identified a variety of primary users including.
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66.Below is a list of the qualitative characteristics identified by GAAP. Following the list is a series of descriptive phrases. a.feedback valueg.verifiability b.relevanceh.consistency c.decision usefulnessi.representational faithfulness d.reliabilityj.timeliness e.comparabilityk.neutrality ____1.When information can make a difference in a decision. ____2.Making information available when it is needed. ____3.When accounting policies and procedures are unchanged from period to period. ____4.When information is verifiable.
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61.Current liabilities includes all of the following except a.income tax payable. b.mortgage due to be paid this year. c.notes receivable. d.advance payments from customers. 62.Most long-term liabilities are reported on the balance sheet at their a.net realizable value. b.replacement value. c.historical cost. d.present value. 63.Which of the following is not a component of shareholders’ equity? a.Noncontrolling interest b.Residual capital c.Earned capital d.Contributed capital 64.Which of.
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21.The adjustment necessary to convert cash-basis payments for other operating costs to accrual-basis operating expenses requires the addition of ending prepaid expenses to the beginning prepaid expenses, subtracting the beginning accrued expenses from this amount, and finally adding the ending accrued expenses. a.True b.False 22.The accountingequation can be expressed as a.Assets = Liabilities -.
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41.An example of a transposition is a.presenting the cash account at $1,500 instead of $15,000. b.presenting prepaid insurance at $920 instead of $290. c.incorrectly posting a credit amount as a debit amount in the general ledger. d.not journalizing a sales transaction at all. 42.If the trial balance does not balance and the difference between debits.
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