Info
Warning
Danger

Study Resources (Accounting)

Learning Objective 1.3 Questions 1) An entity A) is a separate economic unit. B) allows a section of an organization to be a separate economic unit. C) helps accountants relate events to a defined area of accounting. D) All of the above E) None of the above 2) If liabilities increase by $10,000 during a given period.
11 Views
View Answer
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.
16 Views
View Answer
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.
10 Views
View Answer
21) Under the accrual basis of accounting, prepaid assets become expenses when they expire. 22) Use the following balance sheet equation format to show the effect of the following transactions. Write the account names that will be used for each transaction. Account name Total assets Total liabilities Paid-in capital Retained Earnings 1. The owners invest $42,000 in the company. 2..
11 Views
View Answer
Learning Objective 1.7 Questions 1) The principal task of the FASB is to A) be a link between the business community and the Securities and Exchange Commission (SEC). B) establish GAAP in the United States. C) audit each public company's financial statements and records. D) act as a counsel and advocate for business in its.
11 Views
View Answer
Learning Objective 1.6 Questions 1) Kristine Parsons owns 2,000 shares of $1.00 par value capital stock of Garments 4 You. Kristine sold 100 of these shares to Beverly Plito for $200. The effect of this transaction on the accounts of Garments 4 You would be to A) increase the capital stock account.
11 Views
View Answer
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,.
9 Views
View Answer
Learning Objective 1.9 Questions 1) Public accountants follow the code of ethics for professional conduct established by the A) Sarbanes-Oxley Act. B) Securities and Exchange Commission. C) Financial Accounting Standards Board. D) Congress of the United States. E) American Institute of Certified Public Accountants. 2) The AICPA Code of Professional Ethics is especially concerned with integrity and.
13 Views
View Answer
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.
14 Views
View Answer
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.
13 Views
View Answer
21) Revenue is recorded when accounts receivable are collected under the cash basis of accounting. 22) Under the cash method, revenue is recorded when cash is collected. 23) The accrual basis of accounting provides a better measure of economic performance than the cash basis. 24) Analyze the following transactions in the accounting equation.
10 Views
View Answer
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.
10 Views
View Answer
  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.
32 Views
View Answer
16) Following is the balance sheet for Value Creation, Inc. as of January 31, 20X9: Value Creation, Inc. Balance Sheet January 31, 20X9 Assets: Liabilities: Cash $ 7,100 Accounts Payable $ 6,200 Accounts Receivable 4,000 Notes Payable 8,300 Merchandise Inventory 13,500 Total Liabilities 14,500 Prepaid Rent 3,300 Stockholders' Equity: Store Equipment 15,600 Paid-in Capital $17,600 Retained Earnings 11,400 Total Stockholders' equity.
9 Views
View Answer
Learning Objective 2.2 Questions 1) According to U.S. GAAP, revenue is recognized when it is A) realized or realizable only. B) earned only. C) received in a timely fashion. D) earned and realized or realizable. E) received in cash. 2) Which of the following is an example of revenue that may be realized but not yet earned? A).
16 Views
View Answer
Learning Objective 2.5 Questions 1) The Goaling Company declared a $3,500 cash dividend on March 1, 2012 payable on April 2, 2012. The effect of the March 1st transaction on the Goaling Company would be to A) decrease the balance in the cash account and decrease the balance in the retained earnings.
13 Views
View Answer
Learning Objective 1.5 Questions 1) Which of the following statements is false? A) If a sole proprietorship fails, the creditors can obtain repayment from the personal assets of the single owner. B) If a partnership fails, the creditors can obtain repayment from the personal assets of the partners. C) If a corporation fails, the.
13 Views
View Answer
11) An operating loss occurs when A) revenues exceed expenses. B) expenses exceed revenues. C) assets exceed liabilities. D) liabilities exceed assets. E) liabilities exceed owners equity. 12) Expenses are A) increases in net assets as a result of consuming resources in the process of providing services to a customer. B) decreases in net assets as a result.
17 Views
View Answer
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.
25 Views
View Answer
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.
9 Views
View Answer
Learning Objective 2.4 Questions 1) Net income is defined as A) revenues minus expenses. B) expenses minus revenues. C) assets minus revenues. D) assets plus revenues. E) owners' equity assets minus expenses. 2) Under accrual basis accounting, the recognition of salaries earned and the immediate payment of salaries to employees would A) increase assets. B) increase owners' equity. C) increase.
12 Views
View Answer
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.
14 Views
View Answer
Learning Objective 1.1 Questions 1) The primary purpose of financial accounting is to A) supply information for external users' decision making. B) provide data for internal users' decision making. C) produce data for income taxes. D) create an audit report. E) organize the data for management. 2) Footnotes are A) included in the audit report. B) an integral part.
17 Views
View Answer
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.
17 Views
View Answer
39) The balance sheet for Sesame Company at December 31, 2009 is given below: Current Assets: Cash$118 Accounts Receivable36 Inventory54 Total Current Assets$208 Long-term Assets: Fixed Assets$322 Less: Accumulated Depreciation(136) Net Fixed Assets$186 Total Assets$394 Current Liabilities: Accounts Payable$44 Taxes Payable14 Total Current Liabilities$58 Long-term Bonds Payable60 Total Liabilities$118 Stockholders' Equity: Paid-in Capital$120 Retained Earnings156 Total Stockholders' Equity$276 Total Liabilities and Stockholders' Equity$394 Required: Prepare a common-size balance sheet. 40) The following information is.
24 Views
View Answer
Learning Objective 1.4 Questions 1) Twinkle Toes Dance Company December 31, 20X9 Cash $10,000 Accounts payable $5,600 Accounts receivable 4,000 Notes payable 17,000 Inventory 8,000 Common stock 5,000 Equipment 14,800 Retained earnings 9,200 Total Assets $36,800 Total liabilities and shareholders equity $36,800 What is the name of the financial statement above? A) Income Statement B) Balance Sheet C) Statement of Cash Flows D) Statement of Changes in Shareholders Equity E) Statement of Retained Earnings 2) Following is an alphabetical.
11 Views
View Answer
21) The Bailey Company reports the following information: Sales for the year ended December 31, 2012$106,950 Gross profit for the year ended December 31, 2012$45,150 Net income for the year ended December 31, 2012$7,300 Total Current Assets, December 31, 2012$18,700 Total Current Liabilities, December 31, 2012$7,600 Total Assets, December 31, 2012$48,400 Total Liabilities, December 31, 2012$20,850 Total common.
12 Views
View Answer
Learning Objective 1.8 Questions 1) An auditor's opinion is not A) a report describing the auditor's examination of transactions and financial statements. B) included in the financial statements in the annual report issued by the corporation. C) another name for independent opinion. D) certified by the Securities Exchange Commission. E) a third party review. 2) The auditor's.
10 Views
View Answer
Learning Objective 2.1 Questions 1) The operating cycle begins with A) the acquisition of goods. B) the receipt of cash from customers. C) the payment for goods. D) the initial investment by owners. E) the sales to customers. 2) Net income is A) the difference between revenues and dividends B) the difference between revenues and retained earnings. C) the difference.
25 Views
View Answer
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.
12 Views
View Answer
11) Payton Corporation, acquired some office equipment, including a desk costing $900. The owner of the business next door said that he had been searching for a desk just like that one, so Payton Corporation, sold the desk to its business neighbor at cost, receiving $400 in cash, with the.
9 Views
View Answer
Learning Objective 2.3 Questions 1) Mac's Computer Skills Training, purchased equipment for $30,000 on January 1, 20X8, and believes the equipment has a useful life of 36 months. What will be the effect of the equipment's depreciation on the balance sheet equation? A) Decreases Equipment account and decreases Stockholders' Equity B) Decreases Equipment.
11 Views
View Answer
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,.
12 Views
View Answer
11) Liabilities are economic obligations of the organization to outsiders, or claims against its assets by outsiders. 12) Accountants use the terms notes payable or notes receivable to describe the existence of promissory notes. 13) Examples of assets include cash, inventory, and capital stock. 14) Inventory is goods held by a company for.
12 Views
View Answer
Learning Objective 1.2 Questions 1) A liability that results from a purchase of goods or services on open account is referred to as a(n) A) accounts receivable. B) notes payable. C) accounts payable. D) notes receivable. E) capital stock. 2) Which of the following statements is true? A) Owners' equities are economic sacrifices after deducting liabilities. B) Assets are.
12 Views
View Answer
11) Floral Deliveries, Inc. paid $6,000 for January, February, March and April's rent in advance on January 1, 20X9. The company recorded this transaction by increasing the balance in the Prepaid Rent account. The balance in the Rent Expense account for the period, January 1, 20X9 through March 31, 20X9,.
13 Views
View Answer
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.
13 Views
View Answer
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).
12 Views
View Answer
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.
15 Views
View Answer
11) Financial accounting serves external decision makers, such as suppliers, banks, government agencies, and stockholders. 12) Management accounting serves internal decision makers, such as top executives and department heads. 13) Managerial accounting serves external users while financial accounting serves internal users. 14) The annual report is a document prepared by the board of.
9 Views
View Answer
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).
15 Views
View Answer
21) An owner's investment into a business will increase assets and decrease liabilities. 22) An account is a summary record of the changes in a particular asset, liability, or owners' equity. 23) A transaction affects the financial position of an entity and can be reliably recorded in terms of money. 24) A transaction.
12 Views
View Answer
14) The Dyer Corporation began business operations on April 1, 20X9. The following transactionsoccurred during April 20X9: 1. The owner invested $32,000 in the company. 2. Inventory costing $13,000 was purchased. $900 in cash was paid; the remainder was put on account. 3. Equipment costing $23,000 was purchased, of which one-half was paid.
18 Views
View Answer
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.
11 Views
View Answer
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.
10 Views
View Answer
17.5   Questions 1) In an efficient capital market, the market prices of securities ________. A) fully reflect all the information available to the public B) fully reflect all the information available to insiders C) reflect some of the information available to the public D) reflect most of the information available to the public 2) In an.
14 Views
View Answer