Exam 2: A Further Look at Financial Statements

The convention of consistency refers to consistent use of accounting principles

A company using the same accounting principles from year to year is an application of

IFRS requires the use of

Ratios that measure the income or operating success of a company for a given period of time are

The following information is available for Cooke Corporation: (in million) Cash receipts from operating activities \ 780 Cash payments from operating activities \ 240 Net cash used by investing \ 210 Net cash provided by financing \ 750 Net increase in cash and equivalents ? Cash and equivalents at start of year \ 550 Cash and equivalents at year-end ? What is the net increase in cash and equivalents?

Both IFRS and GAAP require disclosure about

Materiality is a company-specific aspect of faithful representation.

Which accounting assumption requires that only those things that can be expressed in dollar values are included in the accounting records?

Which of the following is not classified properly as a current asset?

The economic entity assumption states that assets should be recorded at their cost.

Working capital is a measure of

The economic entity assumption states that economic events can be identified with a particular unit of accountability.

What is the order in which assets are generally listed on a classified balance sheet?

Relevant accounting information

The following information is available for Bradshaw Corporation and Newell Corporation: (in millions) Bradshaw Corporation Newell Corporation 2017 2016 2017 2016 Preferred dividends 25 10 0 30 Net income 500 480 490 520 Shares outstanding at the end of the year 200 180 150 200 Shares outstanding at the beginning of the year 180 150 200 220 Based on this information, which of the following is suggested by the earnings per share calculations (rounded to two decimals) and the information given?

Which of the following is a measure of liquidity?

Use the following data to determine the total dollar amount of assets to be classified as current assets. Carne Auto Supplies Balance Sheet December 31, 2017 Cash \ 70,000 Accounts payable \ 130,000 Accounts receivable 100,000 Salaries and wages payable 20,000 Inventory 140,000 Mortgage payable 180,000 Prepaid insurance 80,000 Total liabilities \ 330,000 Stock investments 180,000 Land 190,000 Buildings \ 230,000 Common stock \2 40,000 Less: Accumulated Retained earnings 500,000 depreciation (60,000) 170,000 Total stockholders' equity \7 40,000 Trademarks 140,000 Total liabilities and Total assets \1 ,070,000 stockholders' equity \1 ,070,000

Use the following data to determine the total dollar amount of assets to be classified as investments. Carne Auto Supplies Balance Sheet December 31, 2017 Cash \ 70,000 Accounts payable \ 130,000 Accounts receivable 100,000 Salaries and wages payable 20,000 Inventory 140,000 Mortgage payable 180,000 Prepaid insurance 80,000 Total liabilities \ 330,000 Stock investments 180,000 Land 190,000 Buildings \ 230,000 Common stock \2 40,000 Less: Accumulated Retained earnings 500,000 depreciation (60,000) 170,000 Total stockholders' equity \7 40,000 Trademarks 140,000 Total liabilities and Total assets \1 ,070,000 stockholders' equity \1 ,070,000

Which of the following is not an accounting assumption?

Using the following balance sheet and income statement data, what is the current ratio? Current assets \ 32,000 Net income \ 42,000 Current liabilities 16,000 Stockholders' equity 78,000 Average assets 160,000 Total liabilities 42,000 Total assets 120,000 Average common shares outstanding was 15,000.