Exam 2: A Further Look at Financial Statements

An intangible asset

It is not true that current assets are resources that are expected to be

Generally accepted accounting principles

Use the following data to determine the total dollar amount of assets to be classified as investments. Eddy Auto Supplies Balance Sheet December 31, 2017 Cash \ 126,000 Accounts payable \ 165,000 Accounts receivable 120,000 Salaries and wages payable 30,000 Inventory 210,000 Mortgage payable 270,000 Prepaid insurance 90,000 Total liabilities \4 65,000 Stock investments 255,000 Land 285,000 Buildings \3 39,000 Common stock \ 360,000 Less: Accumulated Retained earnings 750,000 depreciation (60,000) 279,000 Total stockholders' equity \1 ,110,000 Trademarks 210,000 Total liabilities and Total assets \1 ,050,000 stockholders' equity \1 ,575,000

Ace Company is a retail store. Due to competition, it is having trouble selling its products. Thus, inventory has been building up. Ace's current ratio has not changed for the past three years, in spite of the inventory build up. Which of the following statements is true?

The current ratio is

On a classified balance sheet, short-term investments are classified as

Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment. Koonce Office Supplies Balance Sheet December 31, 2017 Cash \ 195,000 Accounts payable \ 210,000 Accounts receivable 150,000 Salaries and wages payable 30,000 Inventory 165,000 Mortgage payable 240,000 Prepaid insurance 90,000 Total liabilities \ 480,000 Stock investments 255,000 Land 270,000 Buildings \ 315,000 Common stock \3 60,000 Less: Accumulated Retained earnings 750,000 depreciation (60,000) 255,000 Total stockholders' equity \1 ,110,000 Trademarks 210,000 Total liabilities and Total assets \ 1,590,000 stockholders' equity \1 ,590,000

Which of the following is a constraint in accounting?

Most companies that follow IFRS present balance sheet (statement of financial position) information in this order.

A short-term creditor is primarily interested in the __________ of the borrower.

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, what is the amount of Bradshaw's earnings per share (rounded to two decimals) for 2017?

Accounting information is relevant to business decisions because it

For 2017 Fielder Corporation reported net income of $32,000; net sales $400,000; and average share outstanding 16,000. There were no preferred dividends. What was the 2017 earnings per share?

Which of the following is not a quality associated with faithful representation?

In 2017 Grider Corporation had cash receipts of $35,000 and cash disbursements of $20,000. Grider's ending cash balance at December 31, 2017 was $65,000. What was Grider's beginning cash balance?

Using the following balance sheet and income statement data, what is the earnings per share? Current assets \ 21,000 Net income \ 45,000 Current liabilities 12,000 Stockholders' equity 63,000 Average assets 132,000 Total liabilities 27,000 Total assets 90,000 Average common shares outstanding was 15,000.

Working capital is calculated by taking

Information presented in a clear and concise fashion so that users can comprehend its meaning is an application of

The investment category on the balance sheet normally includes investments that are intended to be held for a short period of time (less than one year).