Question 1

Information that is presented in a clear fashion, so that users of that information can interpret it is an example of

Accepted Answer

A)  relevance. 
B)  faithful representation. 
C)  understandability. 
D)  comparability. 
A)  relevance. 
B)  faithful representation. 
C)  understandability. 
D)  comparability.

Question 2

A current asset is

Accepted Answer

A)  the last asset purchased by a business. 
B)  an asset which is currently being used to produce a product or service. 
C)  usually found as a separate classification in the income statement. 
D)  expected to be converted to cash or used in the business within a relatively short period of time. 
A)  the last asset purchased by a business. 
B)  an asset which is currently being used to produce a product or service. 
C)  usually found as a separate classification in the income statement. 
D)  expected to be converted to cash or used in the business within a relatively short period of time.

Question 3

The following information is available for Bradshaw Corporation and Newell Corporation:   Based on this information, which of the following is suggested by the earnings per share calculations (rounded to two decimals) and the information given?

Accepted Answer

A)  There is lower performance in 2013 than in 2014 for Newell Corporation. 
B)  There is higher performance in 2013 than in 2014 for Newell Corporation. 
C)  There are fewer earnings available to Newell's common stockholders in 2014 than in 2013. 
D)  There is a decrease in preferred shares of stock in 2014 as compared with 2013. 
A)  There is lower performance in 2013 than in 2014 for Newell Corporation. 
B)  There is higher performance in 2013 than in 2014 for Newell Corporation. 
C)  There are fewer earnings available to Newell's common stockholders in 2014 than in 2013. 
D)  There is a decrease in preferred shares of stock in 2014 as compared with 2013.

Question 4

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

Accepted Answer

A)  $404,000 
B)  $234,000 
C)  $254,000 
D)  $174,000 
A)  $404,000 
B)  $234,000 
C)  $254,000 
D)  $174,000

Question 5

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

Accepted Answer

A)  $240,000 
B)  $390,000 
C)  $130,000 
D)  $180,000 
A)  $240,000 
B)  $390,000 
C)  $130,000 
D)  $180,000

Question 6

Garrison Company prepares quarterly reports, which it distributes to all stockholders and other entities that rely on its accounting information. Which of the following is the best term for the key assumption in financial reporting that Garrison is following?

Accepted Answer

A)  Monetary unit assumption 
B)  Going concern assumption 
C)  Economic entity assumption 
D)  Periodicity assumption. 
A)  Monetary unit assumption 
B)  Going concern assumption 
C)  Economic entity assumption 
D)  Periodicity assumption.

Question 7

The following information is available for Cooke Corporation: $$\begin{array} { | l | c | } 
\hline & \text { (in million) } \
\hline \text { Cash receipts from operating activities } & \$ 980 \
\hline \text { Cash payments from operating activities } & \$ 240 \
\hline \text { Net cash used by investing } & \$ 210 \
\hline \text { Net cash provided by financing } & \$ 750 \
\hline \text { Net increase in cash and equivalents } & ? \
\hline \text { Cash and equivalents at start of year } & \$ 550 \
\hline \text { Cash and equivalents at year-end } & ? \
\hline
\end{array}$$ What is the cash and equivalents amount at year-end?

Accepted Answer

A)  $1,290 
B)  $730 
C)  $1,830 
D)  $2,730 
A)  $1,290 
B)  $730 
C)  $1,830 
D)  $2,730

Question 8

Mitchell Corporation has current assets of $1,600,000 and current liabilities of $750,000. If they issue $100,000 of new stock what will their new current ratio be? (rounded)

Accepted Answer

A)  2.27:1 
B)  2.04:1 
C)  1.88:1 
D)  2.13:1 
A)  2.27:1 
B)  2.04:1 
C)  1.88:1 
D)  2.13:1

Question 9

It is possible for an asset to be a current asset even though the expected conversion of that asset into cash is to be longer than one year or the normal operating cycle.

Accepted Answer

A) True 
 B)False

Question 10

For 2014 Fielder Corporation reported net income of $30,000; net sales $400,000; and average share outstanding 16,000. There were no preferred dividends. What was the 2014 earnings per share?

Accepted Answer

A)  $0.08 
B)  $0.53 
C)  $25.00 
D)  $1.88 
A)  $0.08 
B)  $0.53 
C)  $25.00 
D)  $1.88

Question 11

A company can change to a new method of accounting if management can justify that the new method results in

Accepted Answer

A)  more meaningful financial information. 
B)  a higher net income. 
C)  a lower net income for tax purposes. 
D)  less likelihood of clerical errors. 
A)  more meaningful financial information. 
B)  a higher net income. 
C)  a lower net income for tax purposes. 
D)  less likelihood of clerical errors.

Question 12

Earnings per share is a

Accepted Answer

A)  profitability ratio. 
B)  liquidity ratio. 
C)  solvency ratio. 
D)  trending ratio. 
A)  profitability ratio. 
B)  liquidity ratio. 
C)  solvency ratio. 
D)  trending ratio.

Question 13

The following data are taken from the financial statements of Rosen, Inc. as of the end of the year 2014. The data are in alphabetical order. $$\begin{array} { l r l r } 
\text { Accounts payable } & \$ 28,000 & \text { Net income } & \$ 48,000 \
\text { Accounts receivable } & 66,000 & \text { Other current liabilities } & 17,000 \
\text { Cash } & 24,000 & \text { Salaries and wages payable } & 5,000 \
\text { Gross profit } & 160,000 & \text { Total assets } & 250,000 \
\text { Income before income taxes } & 54,000 & \text { Total liabilities } & 175,000
\end{array}$$ Additional information: The average common shares outstanding during the year was 40,000.
Instructions
Compute the following:
(a) Current ratio. (c) Earnings per share.
(b) Working capital. (d) Debts to assets ratio.

Accepted Answer

(a) Current ratio = Current assets ÷ Cur

Question 14

What are three of the five enhancing qualities of useful information.

Accepted Answer

The FASB and IASB describe the

Question 15

Using the following balance sheet and income statement data, what is the total amount of working capital? $$\begin{array} { l r l r } 
\text { Current assets } & \$ 16,000 & \text { Net income } & \$ 21,000 \
\text { Current liabilities } & 8,000 & \text { Stockholders' equity } & 39,000 \
\text { Average assets } & 80,000 & \text { Total liabilities } & 21,000 \
\text { Total assets } & 60,000 & &
\end{array}$$ Average common shares outstanding was 10,000.

Accepted Answer

A)  $ 4,000 
B)  $16,000 
C)  $ 5,000 
D)  $ 8,000 
A)  $ 4,000 
B)  $16,000 
C)  $ 5,000 
D)  $ 8,000

Question 16

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

Accepted Answer

A)  generate cash to invest in new capital expenditures. 
B)  generate net income. 
C)  generate cash to pay dividends. 
D)  generate cash to invest in new capital expenditures and to pay dividends. 
A)  generate cash to invest in new capital expenditures. 
B)  generate net income. 
C)  generate cash to pay dividends. 
D)  generate cash to invest in new capital expenditures and to pay dividends.

Question 17

The following information is available for Bradshaw Corporation and Newell Corporation:   Based on the information for both Bradshaw and Newell over the two-year period, the earnings per share calculations (rounded to two decimals) indicate that

Accepted Answer

A)  Bradshaw is seeing a greater performance improvement than Newell. 
B)  the earnings available to common stockholders is decreasing for Newell and increasing for Bradshaw. 
C)  the earnings per share calculations for both companies assume that changes in shares between 2013 and 2014 occur in the middle of the year. 
D)  Newell is more financially stable than Bradshaw. 
A)  Bradshaw is seeing a greater performance improvement than Newell. 
B)  the earnings available to common stockholders is decreasing for Newell and increasing for Bradshaw. 
C)  the earnings per share calculations for both companies assume that changes in shares between 2013 and 2014 occur in the middle of the year. 
D)  Newell is more financially stable than Bradshaw.

Question 18

Identify and briefly explain the two fundamental qualities of useful information.

Accepted Answer

Relevance and faithful representation ar

Question 19

Liabilities are generally classified on a balance sheet 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 long-term liabilities. 
A)  small liabilities and large liabilities. 
B)  present liabilities and future liabilities. 
C)  tangible liabilities and intangible liabilities. 
D)  current liabilities and long-term liabilities.

Question 20

Comparability and consistency are enhancing qualities that make accounting information useful for decision-making purposes. Briefly explain the difference between these two qualities and explain how they are related to each other.

Accepted Answer

Comparability results when different com

Information that is presented in a clear fashion, so that users of that information can interpret it is an example of

A current asset is

The following information is available for Bradshaw Corporation and Newell Corporation: Based on this information, which of the following is suggested by the earnings per share calculations (rounded to two decimals) and the information given?

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

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

Garrison Company prepares quarterly reports, which it distributes to all stockholders and other entities that rely on its accounting information. Which of the following is the best term for the key assumption in financial reporting that Garrison is following?

Mitchell Corporation has current assets of $1,600,000 and current liabilities of $750,000. If they issue $100,000 of new stock what will their new current ratio be? (rounded)

It is possible for an asset to be a current asset even though the expected conversion of that asset into cash is to be longer than one year or the normal operating cycle.

For 2014 Fielder Corporation reported net income of $30,000; net sales $400,000; and average share outstanding 16,000. There were no preferred dividends. What was the 2014 earnings per share?

A company can change to a new method of accounting if management can justify that the new method results in

Earnings per share is a

What are three of the five enhancing qualities of useful information.

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

The following information is available for Bradshaw Corporation and Newell Corporation: Based on the information for both Bradshaw and Newell over the two-year period, the earnings per share calculations (rounded to two decimals) indicate that

Identify and briefly explain the two fundamental qualities of useful information.

Liabilities are generally classified on a balance sheet as

Comparability and consistency are enhancing qualities that make accounting information useful for decision-making purposes. Briefly explain the difference between these two qualities and explain how they are related to each other.

Introduction to Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

Filters

Exam 2: A Further Look at Financial Statements

Information that is presented in a clear fashion, so that users of that information can interpret it is an example of

A current asset is

The following information is available for Bradshaw Corporation and Newell Corporation: Based on this information, which of the following is suggested by the earnings per share calculations (rounded to two decimals) and the information given?

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

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

Garrison Company prepares quarterly reports, which it distributes to all stockholders and other entities that rely on its accounting information. Which of the following is the best term for the key assumption in financial reporting that Garrison is following?

Mitchell Corporation has current assets of $1,600,000 and current liabilities of $750,000. If they issue $100,000 of new stock what will their new current ratio be? (rounded)

It is possible for an asset to be a current asset even though the expected conversion of that asset into cash is to be longer than one year or the normal operating cycle.

For 2014 Fielder Corporation reported net income of $30,000; net sales $400,000; and average share outstanding 16,000. There were no preferred dividends. What was the 2014 earnings per share?

A company can change to a new method of accounting if management can justify that the new method results in

Earnings per share is a

What are three of the five enhancing qualities of useful information.

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

The following information is available for Bradshaw Corporation and Newell Corporation: Based on the information for both Bradshaw and Newell over the two-year period, the earnings per share calculations (rounded to two decimals) indicate that

Identify and briefly explain the two fundamental qualities of useful information.

Liabilities are generally classified on a balance sheet as

Comparability and consistency are enhancing qualities that make accounting information useful for decision-making purposes. Briefly explain the difference between these two qualities and explain how they are related to each other.

Introduction to Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

Filters