Question 1

Liquidity

Accepted Answer

A) measures the ability of the firm to pay financial obligations as they become due. 
B) can be measured in terms of working capital. 
C) can be assessed by the current ratio. 
D) All of the above. 
A) measures the ability of the firm to pay financial obligations as they become due. 
B) can be measured in terms of working capital. 
C) can be assessed by the current ratio. 
D) All of the above.

Question 2

If the current ratio is 2 to 1 and current assets equal $200,000, how much is working capital?

Accepted Answer

A) $0 
B) $100,000 
C) $200,000 
D) $300,000 
A) $0 
B) $100,000 
C) $200,000 
D) $300,000

Question 3

-Refer to Baker's Pride Bakery. Which statement indicates the financial position of the company? What information is provided on that statement that indicates the "financial position" of the company? Explain.

Accepted Answer

The classified balance sheet provides in

Question 4

Because the four financial statements are interrelated (i.e., there is a natural progression from one financial statement to another), the balance sheet should be prepared first.

Accepted Answer

A) True 
 B)False

Question 5

Potential stockholders and lenders are interested in a company's financial statements. Several financial statement items appear below. Answer the questions that follow.

Accepted Answer

The answer of Potential stockholders and lenders are interested in...

Question 6

On a multiple-step income statement, operating income results from subtracting total operating expenses from which of the following amounts?

Accepted Answer

A) gross margin 
B) cost of goods sold 
C) income before taxes 
D) net sales 
A) gross margin 
B) cost of goods sold 
C) income before taxes 
D) net sales

Question 7

Which of the following terms best describes a distribution of the net income of a corporation to its owners?

Accepted Answer

A) retained earnings 
B) dividends 
C) liquidation of assets 
D) monetary unit 
A) retained earnings 
B) dividends 
C) liquidation of assets 
D) monetary unit

Question 8

A company reported the following income statement amounts:   Which of the following best describes the company's performance?

Accepted Answer

A) The company's operating profit as a percentage of operating revenues decreased. 
B) The company has become more profitable. 
C) The increase in operating revenues increased the company's net income. 
D) The operating expenses as a percentage of operating revenues remained the same. 
A) The company's operating profit as a percentage of operating revenues decreased. 
B) The company has become more profitable. 
C) The increase in operating revenues increased the company's net income. 
D) The operating expenses as a percentage of operating revenues remained the same.

Question 9

Management's Discussion and Analysis

Accepted Answer

A) is a report of the independent accountants. 
B) can be a substituted for the notes to the financial statements. 
C) provides a discussion and explanation of various items reported in the financial statements. 
D) provides assurances that the auditors are responsible for the financial statements. 
A) is a report of the independent accountants. 
B) can be a substituted for the notes to the financial statements. 
C) provides a discussion and explanation of various items reported in the financial statements. 
D) provides assurances that the auditors are responsible for the financial statements.

Question 10

If a company has current assets of $2,100,000 and current liabilities of $500,000, calculate its working capital.

Accepted Answer

A) $2,100,000 
B) $2,600,000 
C) $1,600,000 
D) $ 500,000 
A) $2,100,000 
B) $2,600,000 
C) $1,600,000 
D) $ 500,000

Question 11

The following amounts were taken from the accounting records at December 31, 2013:

Accepted Answer

The answer of The following amounts were taken from the...

Question 12

The amount of earnings distributed to stockholders can be found in the income statement as an expense.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following would not be considered to be an intangible asset?

Accepted Answer

A) franchises 
B) copyrights 
C) investments 
D) trademarks 
A) franchises 
B) copyrights 
C) investments 
D) trademarks

Question 14

The three forms of business organizations are ____________________, ____________________, and ____________________.

Accepted Answer

sole proprietorships, partners

Question 15

Match each statement to the item listed below.
a.Audit report
b.Fiscal year
c.Financial statements
d.Management's discussion and analysis
e.Notes to the financial statements
-Contains the auditor's opinion as to whether the financial statements fairly present the company's financial position and results of operations

Accepted Answer

The answer of Match each statement to the item listed...

Question 16

On January 1, 2013, a company's balance in retained earnings was $10,000,000. At December 31, 2013, the balance in retained earnings was $9,400,000. If the company earned net income of $440,000 during the year, how much were dividends?

Accepted Answer

A) $1,040,000 
B) $1,000,000 
C) $ 600,000 
D) $ 440,000 
A) $1,040,000 
B) $1,000,000 
C) $ 600,000 
D) $ 440,000

Question 17

-Refer to Beard Marine. What was the economic effect of the dividend payment?

Accepted Answer

A) The dividend reduced net income for 2013. 
B) The dividend should be added to net income if the company's accounting equation is in balance. 
C) The dividend reduced total retained earnings. 
D) The dividends must be paid whenever the company reports net income. 
A) The dividend reduced net income for 2013. 
B) The dividend should be added to net income if the company's accounting equation is in balance. 
C) The dividend reduced total retained earnings. 
D) The dividends must be paid whenever the company reports net income.

Question 18

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.)
a.Investors
b.Management
c.Supplier
d.Banker
e.Government
f.Employees
g.Labor Union
h.Investors and Banker
i.Supplier and Banker
-Will I get a raise this year?

Accepted Answer

The answer of Provided is a list of important users...

Question 19

Working capital is calculated by which of the following?

Accepted Answer

A) Current assets divided by current liabilities. 
B) Total assets minus total liabilities. 
C) Current assets minus current liabilities. 
D) Current assets plus current liabilities. 
A) Current assets divided by current liabilities. 
B) Total assets minus total liabilities. 
C) Current assets minus current liabilities. 
D) Current assets plus current liabilities.

Question 20

The ability of a company to pay its debt as it comes due relates to ____________________.

Accepted Answer

The answer of The ability of a company to pay...

Liquidity

If the current ratio is 2 to 1 and current assets equal $200,000, how much is working capital?

-Refer to Baker's Pride Bakery. Which statement indicates the financial position of the company? What information is provided on that statement that indicates the "financial position" of the company? Explain.

Because the four financial statements are interrelated (i.e., there is a natural progression from one financial statement to another), the balance sheet should be prepared first.

Potential stockholders and lenders are interested in a company's financial statements. Several financial statement items appear below. Answer the questions that follow.

On a multiple-step income statement, operating income results from subtracting total operating expenses from which of the following amounts?

Which of the following terms best describes a distribution of the net income of a corporation to its owners?

A company reported the following income statement amounts: Which of the following best describes the company's performance?

Management's Discussion and Analysis

If a company has current assets of $2,100,000 and current liabilities of $500,000, calculate its working capital.

The following amounts were taken from the accounting records at December 31, 2013:

The amount of earnings distributed to stockholders can be found in the income statement as an expense.

Which of the following would not be considered to be an intangible asset?

The three forms of business organizations are , , and .

On January 1, 2013, a company's balance in retained earnings was $10,000,000. At December 31, 2013, the balance in retained earnings was $9,400,000. If the company earned net income of $440,000 during the year, how much were dividends?

-Refer to Beard Marine. What was the economic effect of the dividend payment?

Working capital is calculated by which of the following?

The ability of a company to pay its debt as it comes due relates to ____________________.

The Accounting Information System

Accrual Accounting

Internal Control and Cash

Sales and Receivables

Cost of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 1: Accounting and the Financial Statements

Liquidity

If the current ratio is 2 to 1 and current assets equal $200,000, how much is working capital?

-Refer to Baker's Pride Bakery. Which statement indicates the financial position of the company? What information is provided on that statement that indicates the "financial position" of the company? Explain.

Because the four financial statements are interrelated (i.e., there is a natural progression from one financial statement to another), the balance sheet should be prepared first.

Potential stockholders and lenders are interested in a company's financial statements. Several financial statement items appear below. Answer the questions that follow.

On a multiple-step income statement, operating income results from subtracting total operating expenses from which of the following amounts?

Which of the following terms best describes a distribution of the net income of a corporation to its owners?

A company reported the following income statement amounts: Which of the following best describes the company's performance?

Management's Discussion and Analysis

If a company has current assets of $2,100,000 and current liabilities of $500,000, calculate its working capital.

The following amounts were taken from the accounting records at December 31, 2013:

The amount of earnings distributed to stockholders can be found in the income statement as an expense.

Which of the following would not be considered to be an intangible asset?

The three forms of business organizations are ____________________, ____________________, and ____________________.

On January 1, 2013, a company's balance in retained earnings was $10,000,000. At December 31, 2013, the balance in retained earnings was $9,400,000. If the company earned net income of $440,000 during the year, how much were dividends?

-Refer to Beard Marine. What was the economic effect of the dividend payment?

Working capital is calculated by which of the following?

The ability of a company to pay its debt as it comes due relates to ____________________.

The Accounting Information System

Accrual Accounting

Internal Control and Cash

Sales and Receivables

Cost of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

The three forms of business organizations are , , and .