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Study Resources (Accounting)

Learning Objective 2.8 Questions 1) Reliability is defined as A) the quality of information that allows it to help users form their expectations about the future. B) the capability of information to make a difference to the decision maker. C) the quality of information that allows decision makers to depend on it to represent.
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49) The balance sheet of Atlantis Inc. is below: Atlantis Inc. Comparative Balance Sheet December 31, 2016 and 2015 20162015 Assets Total Current Assets$200,000$100,000 Property, Plant, and Equipment, Net550,000500,000 Other Assets50,00050,000 Total Assets$800,000$650,000 Liabilities Total Current Liabilities$150,000$100,000 Long-term Debt350,000250,000 Total Liabilities500,000350,000 Stockholders' Equity Total Stockholders' Equity300,000300,000 Total Liabilities and Stockholders' Equity$800,000$650,000 Calculate working capital for both years. 50) The balance sheet of Atlantis Inc. is below: Atlantis Inc. Comparative Balance.
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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.
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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.
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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.
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11) Common stockholders A) upon dissolution are paid the same amount as all creditors. B) must purchase all shares directly from the issuing organization. C) purchase stock certificates at par value. D) have a claim on whatever is left over after all other claimants have been paid upon liquidation. E) are also members of the.
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Learning Objective 3.1 Questions 1) Which of the following transactions would not affect owners' equity? A) Recording cost of goods sold B) Recording a cash sale C) Recording a sale on account D) Recording utilities expense E) Purchasing inventory for cash 2) Which of the following statements is true regarding attributes of the general ledger and the.
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Learning Objective 17-5 1) A corporation's income statement includes some unique items that do not often apply to smaller businesses. 2) Income from continuing operations helps investors to make predictions about past performance of the company. 3) The disposal of a financial segment would be reported as discontinued operations. 4) Gains and losses on.
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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.
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31) Which of the following accurately describes working capital? A) Current assets minus merchandise inventory B) Current assets minus current liabilities C) Total debt minus stockholders' equity D) Cost of goods sold divided by average merchandise inventory 32) Nobell Inc. provides the following data: 2015 2014 Cash $21,000 $18,000 Accounts Receivable, Net 31,000 35,000 Merchandise Inventory 53,000 25,000 Property, Plant, and Equipment, Net 120,000 90,000 Total assets $225,000 $168,000 Net credit sales $240,000 Cost of.
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Learning Objective 17-4 1) Working capital measures the ability to meet long-term obligations with current assets. 2) The current ratio is calculated as the total current assets divided by the total current liabilities. 3) A high current ratio indicates that current liabilities are more than current assets. 4) The cash ratio helps to determine.
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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).
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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.
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11) Neutrality is defined as A) information which is free from bias and not slanted to influence the behavior of decision makers. B) the capability of information to make a difference to the decision maker. C) the quality of information that allows users to depend on it to represent the conditions or events.
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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.
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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.
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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.
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4) Shelly Wagner began a sole proprietorship named Wagner Company on June 1, 20X9. Following are the transactions, which occurred during the first 10 days of June, 20X9. June 1 Shelly invested $6,600 cash in Wagner Company June 2  Wagner Company acquired equipment costing $3,900. One-third of the balance was paid in.
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21) As per FASB guidelines, earnings per share should appear on the face of the income statement. 22) The price/earnings ratio shows the market price of $1 of earnings. 23) The dividend payout ratio indicates the amount of the dividend as a proportion of a share's market price. 24) The price/earnings ratio indicates.
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17) Following is the balance sheet for the Pratley Corporation as of March 31, 20X9: Assets Liabilities Cash $ 7,100 Accounts Payable $ 6,200 Accounts Receivable 4,000 Notes Payable8,300 Merchandise Inventory 13,500 Total Liab. 14,500 Prepaid Rent 3,300 Paid-in Capital $17,600 Store Equipment 15,600 Retained Earnings 11,400 Total Stockholders' equity 29,000 Total Assets $43,500 Total Liab. and Stockholders'.
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11) The following is summary of information presented on the financial statements of a company on December 31, 2015. Account 2015 2014 Current Assets $82,000 $70,000 Accounts Receivable 60,000 68,000 Merchandise Inventory 62,000 53,000 Current Liabilities 52,000 46,000 Long-term Liabilities 39,000 45,000 Common Stock 70,000 50,000 Retained Earnings 65,000 40,000 What would a horizontal analysis report show with respect to long-term liabilities? A) long-term liabilities decreased by $30,000 B) long-term liabilities decreased by 40% C) long-term liabilities decreased.
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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,.
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6) The accountant for Tibbo Industries is required to prepare monthly financial statements. Upon opening the file with the previous month's balance sheets, the accountant notices that they have been prepared incorrectly. Prepare a corrected November balance sheet based on the information below. Balance Sheet for Tibbo Industries Prepared on November 29, 2009 Assets  Liabilities.
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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.
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Learning Objective 17-3 1) An analysis of a financial statement that reveals the relationship of each statement item to its base amount, which is the 100% figure, is known as vertical analysis. 2) In a vertical analysis of the income statement, each line item is shown as a percentage of net sales. 3).
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17) Prepare the vertical analysis report of the balance sheet data given below: Round off the percentages to two decimal places   Balance Sheet December 31, 2015 2015 Assets Current Assets: Cash and Cash Equivalents$10,000 Accounts Receivable, Net15,600 Merchandise Inventory38,000 Total Current Assets$63,600 Long-term Investments$15,000 Property, Plant, and Equipment, Net195,000 Total Assets$273,600 Liabilities Current Liabilities: Accounts Payable$8,500 Notes Payable1,400 Total Current Liabilities$9,900 Long-term Liabilities$54,000 Total Liabilities$63,900 Stockholders' Equity Common Stock$161,000 Retained Earnings48,700 Total Stockholders'.
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19) Prepare a comparative common-size income statement for Nobell Inc. using the 2015 and 2014 data. Round off the percentages to one decimal place. Nobell Inc. Comparative Income Statement Years Ended December 31, 2015 and 2014 20152014 Net Sales$ 6,355$ 4,920 Cost of Goods Sold3,3702,200 Gross Profit2,9852,720 Operating Expenses: Selling Expenses675580 Administrative expenses410425 Total Expenses1,0851,005 Operating Income1,9001,715 Other Revenues and (Expenses): Interest Revenue00 Interest Expense(400)(695) Total.
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11) Net income appears on the income statement and balance sheet. 12) The balance sheet provides a snapshot of an entity's financial position at an instant of time, while the income statement provides a moving picture of events over a span of time. 13) The ending balance in retained earnings appears on.
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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.
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9) Baskins Corporation's accounting records include the following items, listed in no particular order, for the year ending December 31, 2015: Other Revenues and (Expenses)Gain on Discontinued Operations$75,000 Gain on sale of Equipment$12,000Extraordinary Loss15,000 Loss on disposal of Equipment5,000Cost of Goods Sold285,000 Net Sales650,000Operating Expenses120,000 The income tax rate for the company is 45%. The.
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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.
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41) Partridge Inc. provides the following information for the year 2014: Net income $31,200 Market price per share of common stock $12.00/share Dividends paid $0.80/share Common stock outstanding at Jan 1, 2015 110,000 shares Common stock outstanding at Dec 31, 2016 150,000 shares The company has no preferred stock outstanding. Calculate the dividend yield for common stock. A) 6.67% B) 1.67% C) 3.67% D) 4.67% 42).
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18) Data for Atlantis Inc. is given below: Atlantis Inc. Comparative Balance Sheet December 31, 2015 and 2014 20152014 Assets Current Assets: Cash$12,000$10,200 Accounts Receivable, Net16,10016,800 Merchandise Inventory45,00031,000 Prepaid Expenses6,5003,900 Total Current Assets$79,600$61,900 Property, Plant, and Equipment, Net265,000233,000 Total Assets$344,600$294,900 Liabilities Total Current Liabilities$9,900$11,200 Long-term Liabilities60,00050,000 Total Liabilities69,90061,200 Stockholders' Equity Preferred Stock, 3%75,00075,000 Common Stockholders' Equity, no par$199,700$158,700 Total Liabilities and Stockholders' Equity$344,600$294,900 Prepare a horizontal analysis of the comparative balance sheet.
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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.
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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..
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Learning Objective 2.7 Questions 1) The cost-effectiveness constraint requires that standard setting bodies choose rules that A) have decision-making benefits that exceed the costs of providing the information. B) have revenue generating ability. C) have revenue generating ability that exceeds the cost of providing the information. D) have costs known to the SEC. E) are not.
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11) Frequently, the statement of retained earnings is added to the bottom of the balance sheet. 12) Determine the missing values. Revenues $250 Expenses 200 Dividends Declared 20 Additional investments by owners A Net income B Retained Earnings, Beginning C Retained Earnings, Ending 110 Paid-in Capital, Beginning 60 Paid-in Capital, Ending 60 Total Assets, Beginning D Total Assets, Ending 250 Total Liabilities, Beginning.
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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.
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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.
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20) Data for Nobell Inc. follow: 20152014 Net Sales$850,000$798,000 Cost of Goods Sold635,000580,000 Selling and Administrative Expenses50,00035,000 Other Expenses20,00015,000 Income Tax40,00055,000 Prepare a horizontal analysis of the comparative income statement of Nobell Inc. Round percentage changes to one decimal place. Please use a multiple step income statement. 21) Atlantis Inc. provides the following historical data: 201620152014201320122011 Net sales$4,970$4,500$3,980$3,270$4,750$4,400 Prepare the trend.
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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.
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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.
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Learning Objective 2.6 Questions 1) Which financial ratio is required to be reported on the face of the income statement of publicly-held corporations? A) Earnings per share B) Price-earnings ratio C) Dividend-yield ratio D) Dividend payout ratio E) Inventory turnover ratio 2) Which financial ratio measures how much the investing public is willing to pay for a.
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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.
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11) Which of the following types of financial statement analysis would be used to see how a company's operating expenses as a percentage of net sales have changed from one year to the next? A) vertical analysis B) horizontal analysis C) ratio analysis D) analysis of internal control system 12) The vertical analysis statement of.
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31) Analyze the following transactions in the balance sheet equation using the following worksheet. 1. Initial investment of $300,000 by the owner 2. Acquire equipment for $25,000 cash 3. Acquire inventory for $6,000 on credit 4. Obtain loan of $15,000 from the bank 5. Returned $600 of inventory to supplier 6. Payment to creditor for amount.
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11) Indicate whether each of the following accounts normally possesses a debit (DR) or a credit (CR) balance. 1. Wage expense 9. Merchandise Inventory 2. Prepaid rent  10. Salary expense 3. Cost of goods sold 11. Equipment 4. Cash 12. Accounts receivable 5. Sales 13. Accumulated depreciation 6. Paid-in-capital 14. Notes payable 7. Depreciation expense  15. Utilities.
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