Exam 1: Accounting and the Financial Statements

After reporting a profit of $20,000 for the year, a certain company reported the following items on its balance sheet at December 31, 2013:

-Refer to Baker's Pride Bakery. Based on the information provided, is the company considered a business or non-business entity? How do you know by examining the financial statements?

Match each statement to the item listed below. a.Current assets e.Intangible assets b.Current liabilities f.Long-term investments c.Gross margin g.Long-term liabilities d.Income from operations h.Net profit margin -Obligations that must be satisfied within a year

The income statement summarizes the assets, liabilities and stockholders' equity for a period of time.

A certain company began the year with total assets of $10,000,000 and total liabilities of $6,200,000. No additional stock was issued during the year. Use the accounting equation to answer the following questions.

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

Which one of the following is an internal user of financial information?

Both net income and dividends can be found on this financial statement: ____________________.

Using good form, prepare a Balance Sheet for Ben & Terry's Ice Cream.

The owners of a sole proprietorship, partnership and corporations have limited liability.

Match each statement to the item listed below. a.Current assets e.Intangible assets b.Current liabilities f.Long-term investments c.Gross margin g.Long-term liabilities d.Income from operations h.Net profit margin -Gross margin less operating expenses

Match each statement to the item listed below. a.Current assets e.Intangible assets b.Current liabilities f.Long-term investments c.Gross margin g.Long-term liabilities d.Income from operations h.Net profit margin -Net sales less cost of goods sold expense

For which of the following is the working capital and current ratio is most useful?

The current ratio is useful in determining a company's ability to pay obligations when they become due.

Which one of the following items is least likely to be found in a corporate annual report?

"Revenues" are best described as

Each of the four statements that comprise a full set of financial statements has an underlying equation or formula. List the statements in the order they are prepared and the underlying equation of each.

Presented below are selected data from the balance sheet:

The following information is taken from the Balance Sheet at December 31, 2013:

Which one of the following correctly represents one of the basic financial statement models?