Exam 2: A Further Look at Financial Statements

Earnings per share are calculated by dividing

The use of fair value to report assets

The principle that indicates that assets should be reported at the price received to sell an asset is the

A measure of profitability is the

Which of the following organizations issues accounting standards for countries outside the United States?

Generally accepted accounting principles are rules and practices that are recognized as a general guide for financial reporting purposes.

Profitability means having enough funds on hand to pay debts when they fall due.

Use the following data to determine the total amount of working capital. 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

If accounting information has relevance, it is useful in making predictions about

Current assets divided by current liabilities is known as the

Free cash flow provides an indication of a company's ability to

Which measure would a long-term creditor be least interested in reviewing?

Cost constraint weighs the cost that companies incur to provide a type of information against its benefit to financial statement users.

Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting period.

The convention of consistency pertains to the use of the same accounting principles by firms in the same industry.

Which of the following is not considered an asset?

IFRS

The quality of consistency enhances

Which of the following is not a current liability?

Using the following balance sheet and income statement data, what is the total amount of working capital? 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.