Exam 1: Accounting and The Financial Statements

A company has current assets of $100,000, total assets of $250,000, current liabilities of $20,000, and long-term liabilities of $50,000. How much of its existing cash can the company use to acquire equipment without allowing its current ratio to decline below 2 to 1?

The accountant prepared the following list from the company's accounting records for the year ended December 31, 2019: -Using good form, prepare a Balance Sheet for Ben & Terry's Ice Cream.

Which of the following best describes the term "retained earnings" of a company?

This company's end-of-year balance sheet consisted of the following amounts: -Refer to Bargain Spot Fabrics. What is the retained earnings balance at the end of the current year?

Which of the following represents one of the purposes of the Auditor's Report?

Complete the following table to compare and contrast sole proprietorships and corporations.

The independent auditor's report conveys whether or not the business is a good investment.

The company reported the following items on its financial statements for the year ended December 31, 2019: -Refer to Bay Camera. What is the company's Net Income for the current year?

An independent auditor's (CPA's) report is a guarantee that the financial statements are free from fraud or material error.

The following balances were taken from the company's records: -Refer to Bass Tours. Calculate the total current assets.

"Revenues" are best described as

Which one of the following items appears on a balance sheet?

Businesses engage in which of the following three main activity categories?

Which one of the following equations represents the Statement of Retained Earnings activity?

Provided is a list of important users of accounting information. Also provided are descriptions of a major need for accounting information that may be experienced by the various users. Identify the one user group that is most likely to have the need described. (Choices may be used more than once.) -The exact amount of profit on each product of the company.

Net Income from the Income Statement increases ____________________.

The step of listing the liabilities of the company in order of their time to maturity is performed for a financial statement called ____________________.

Baker’s Pride Bakery Condensed data from the company’s 2019 and 2018 financial statements are presented below. The figures are expressed in thousands. -Refer to Baker's Pride Bakery. Based on the information provided, is the company legally organized as a sole proprietorship, partnership, or corporation? How can you tell?

The Statement of Cash Flows classifies cash flow into these three categories: ____________________, ____________________ and ____________________.

The company's annual report includes an audit report, notes to the financial statements, but not management's discussion and analysis.