Question 1

Use the following information to answer questions 
  
-The dollar amount of current liabilities is

Accepted Answer

A) $196,000. 
B) $170,000. 
C) $ 40,000. 
D) $ 30,000. 
A) $196,000. 
B) $170,000. 
C) $ 40,000. 
D) $ 30,000. C

Question 2

The debt to total assets ratio is calculated by dividing

Accepted Answer

A) non-current liabilities by total assets. 
B) non-current liabilities by average assets. 
C) total liabilities by total assets. 
D) total liabilities by average assets. 
A) non-current liabilities by total assets. 
B) non-current liabilities by average assets. 
C) total liabilities by total assets. 
D) total liabilities by average assets. C

Question 3

Companies using Accounting Standards for Private Enterprises (ASPE) are not required to present basic earnings per share information in their financial statements.

Accepted Answer

A) True 
 B)False  True

Question 4

The price-earnings ratio is a measure of liquidity.

Accepted Answer

A) True 
 B)False

Question 5

Liabilities are generally classified on a statement of financial position as

Accepted Answer

A) small liabilities and large liabilities. 
B) present liabilities and future liabilities. 
C) tangible liabilities and intangible liabilities. 
D) current liabilities and non-current liabilities. 
A) small liabilities and large liabilities. 
B) present liabilities and future liabilities. 
C) tangible liabilities and intangible liabilities. 
D) current liabilities and non-current liabilities.

Question 6

Financial reporting does not have to present the economic substance of a transaction in order to provide a faithful representation of what really happened.

Accepted Answer

A) True 
 B)False

Question 7

The ability of a business to pay obligations that are expected to become due within the next year is called

Accepted Answer

A) leverage. 
B) liquidity. 
C) profitability. 
D) solvency. 
A) leverage. 
B) liquidity. 
C) profitability. 
D) solvency.

Question 8

An intangible asset

Accepted Answer

A) derives its value from the rights and privileges it provides the company. 
B) is worthless because it has no physical substance. 
C) is converted into a tangible asset during the year. 
D) cannot be classified on the statement of financial position because it lacks physical substance. 
A) derives its value from the rights and privileges it provides the company. 
B) is worthless because it has no physical substance. 
C) is converted into a tangible asset during the year. 
D) cannot be classified on the statement of financial position because it lacks physical substance.

Question 9

The relationship between current assets and current liabilities is important in evaluating a company's

Accepted Answer

A) profitability. 
B) liquidity. 
C) fair value. 
D) solvency. 
A) profitability. 
B) liquidity. 
C) fair value. 
D) solvency.

Question 10

If accounting information has relevance, it

Accepted Answer

A) is not required to be complete. 
B) will not have predictive value. 
C) will only make a difference for internal stakeholders. 
D) will make a difference in users' decisions. 
A) is not required to be complete. 
B) will not have predictive value. 
C) will only make a difference for internal stakeholders. 
D) will make a difference in users' decisions.

Question 11

Use the following information to answer questions 
  
-The dollar amount of share capital is

Accepted Answer

A) $406,000. 
B) $236,000. 
C) $140,000. 
D) $ 96,000. 
A) $406,000. 
B) $236,000. 
C) $140,000. 
D) $ 96,000.

Question 12

Which of the following is not a financial statement element?

Accepted Answer

A) Liabilities 
B) Equity 
C) Expenses 
D) Fair value 
A) Liabilities 
B) Equity 
C) Expenses 
D) Fair value

Question 13

On a classified statement of financial position, prepaid expenses are classified as

Accepted Answer

A) a current liability. 
B) property, plant, and equipment. 
C) a current asset. 
D) a long-term investment. 
A) a current liability. 
B) property, plant, and equipment. 
C) a current asset. 
D) a long-term investment.

Question 14

Use the following information to answer questions 
  
-What is the current ratio?

Accepted Answer

A) 2.3:1 
B) 2.0:1 
C) 0.6:1 
D) 0.4:1 
A) 2.3:1 
B) 2.0:1 
C) 0.6:1 
D) 0.4:1

Question 15

Basic earnings per share

Accepted Answer

A) is calculated by dividing income available to common shareholders for the period by the dollar value in the common shares account. 
B) is the only ratio that must be presented in the financial statements for publicly traded companies. 
C) is frequently compared across companies in the same industry. 
D) is the only ratio that must be presented in the financial statements for both publicly traded companies and privately held companies. 
A) is calculated by dividing income available to common shareholders for the period by the dollar value in the common shares account. 
B) is the only ratio that must be presented in the financial statements for publicly traded companies. 
C) is frequently compared across companies in the same industry. 
D) is the only ratio that must be presented in the financial statements for both publicly traded companies and privately held companies.

Question 16

Working capital is

Accepted Answer

A) calculated by dividing current assets by current liabilities. 
B) used to evaluate a company's liquidity and short-term debt-paying ability. 
C) used to evaluate a company's solvency and long-term debt-paying ability. 
D) calculated by subtracting current liabilities from total assets. 
A) calculated by dividing current assets by current liabilities. 
B) used to evaluate a company's liquidity and short-term debt-paying ability. 
C) used to evaluate a company's solvency and long-term debt-paying ability. 
D) calculated by subtracting current liabilities from total assets.

Question 17

Under the going concern assumption, reporting assets, such as land, at their cost may be more appropriate than reporting land at its fair value.

Accepted Answer

A) True 
 B)False

Question 18

The investment classification on the statement of financial position normally includes investments that are intended to be held for a short period of time (less than one year).

Accepted Answer

A) True 
 B)False

Question 19

The two qualitative characteristics that are defined in terms of what influences or makes a difference to a decision maker are

Accepted Answer

A) faithful representation and materiality. 
B) comparability and timeliness. 
C) materiality and relevance. 
D) relevance and understandability. 
A) faithful representation and materiality. 
B) comparability and timeliness. 
C) materiality and relevance. 
D) relevance and understandability.

Question 20

Use the following information for questions 
Anson Corporation had $325,000 in current assets and $145,000 in current liabilities before borrowing $100,000 from the bank for a 6-month period.
-What effect did the borrowing transaction have on the amount of Anson's working capital?

Accepted Answer

A) No effect 
B) $100,000 increase 
C) $145,000 increase 
D) $100,000 decrease 
A) No effect 
B) $100,000 increase 
C) $145,000 increase 
D) $100,000 decrease

Use the following information to answer questions -The dollar amount of current liabilities is

The debt to total assets ratio is calculated by dividing

Companies using Accounting Standards for Private Enterprises (ASPE) are not required to present basic earnings per share information in their financial statements.

The price-earnings ratio is a measure of liquidity.

Liabilities are generally classified on a statement of financial position as

Financial reporting does not have to present the economic substance of a transaction in order to provide a faithful representation of what really happened.

The ability of a business to pay obligations that are expected to become due within the next year is called

An intangible asset

The relationship between current assets and current liabilities is important in evaluating a company's

If accounting information has relevance, it

Use the following information to answer questions -The dollar amount of share capital is

Which of the following is not a financial statement element?

On a classified statement of financial position, prepaid expenses are classified as

Use the following information to answer questions -What is the current ratio?

Basic earnings per share

Working capital is

Under the going concern assumption, reporting assets, such as land, at their cost may be more appropriate than reporting land at its fair value.

The investment classification on the statement of financial position normally includes investments that are intended to be held for a short period of time (less than one year).

The two qualitative characteristics that are defined in terms of what influences or makes a difference to a decision maker are

Use the following information for questions Anson Corporation had $325,000 in current assets and $145,000 in current liabilities before borrowing $100,000 from the bank for a 6-month period. -What effect did the borrowing transaction have on the amount of Anson's working capital?

The Purpose and Use of Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters

Exam 2: A Further Look at Financial Statements

Use the following information to answer questions -The dollar amount of current liabilities is

The debt to total assets ratio is calculated by dividing

Companies using Accounting Standards for Private Enterprises (ASPE) are not required to present basic earnings per share information in their financial statements.

The price-earnings ratio is a measure of liquidity.

Liabilities are generally classified on a statement of financial position as

Financial reporting does not have to present the economic substance of a transaction in order to provide a faithful representation of what really happened.

The ability of a business to pay obligations that are expected to become due within the next year is called

An intangible asset

The relationship between current assets and current liabilities is important in evaluating a company's

If accounting information has relevance, it

Use the following information to answer questions -The dollar amount of share capital is

Which of the following is not a financial statement element?

On a classified statement of financial position, prepaid expenses are classified as

Use the following information to answer questions -What is the current ratio?

Basic earnings per share

Working capital is

Under the going concern assumption, reporting assets, such as land, at their cost may be more appropriate than reporting land at its fair value.

The investment classification on the statement of financial position normally includes investments that are intended to be held for a short period of time (less than one year).

The two qualitative characteristics that are defined in terms of what influences or makes a difference to a decision maker are

Use the following information for questions Anson Corporation had $325,000 in current assets and $145,000 in current liabilities before borrowing $100,000 from the bank for a 6-month period. -What effect did the borrowing transaction have on the amount of Anson's working capital?

The Purpose and Use of Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters