Question 1

Match each definition with the correct term below.
-Cost of goods sold

Accepted Answer

A) Information should have direct bearing on a decision. 
B) The quality or accounting information that enables users to comprehend the meaning of the information they receive. 
C) The quality of accounting information that assures users that information as presented can be substantiated. 
D) The accounting convention that requires that once a company has adopted an accounting procedure,it must use it from one period to the next. 
E) The accounting convention that refers to the relative importance of an item or event.
F)The accounting convention that states that when faced with choosing between two equally acceptable procedures or estimates,accountants should choose the one that is least likely to overstate assets and income.
G)Cash and other assets that a company can reasonably expect to convert to cash,sell,or consume within one year or the company's normal operating cycle.
H)Debts that fall due more than one year in the future or beyond the normal operating cycle.
I)The amount that stockholders invest in the business.
J)Gross sales less sales returns and allowances
K)The amount a merchandiser paid for the merchandise it sold during an accounting period.
L)The income from a company's main business. 
A) Information should have direct bearing on a decision. 
B) The quality or accounting information that enables users to comprehend the meaning of the information they receive. 
C) The quality of accounting information that assures users that information as presented can be substantiated. 
D) The accounting convention that requires that once a company has adopted an accounting procedure,it must use it from one period to the next. 
E) The accounting convention that refers to the relative importance of an item or event.
F)The accounting convention that states that when faced with choosing between two equally acceptable procedures or estimates,accountants should choose the one that is least likely to overstate assets and income.
G)Cash and other assets that a company can reasonably expect to convert to cash,sell,or consume within one year or the company's normal operating cycle.
H)Debts that fall due more than one year in the future or beyond the normal operating cycle.
I)The amount that stockholders invest in the business.
J)Gross sales less sales returns and allowances
K)The amount a merchandiser paid for the merchandise it sold during an accounting period.
L)The income from a company's main business.

Question 2

Use this information to answer the following question.   The total dollar amount of assets to be classified as current assets is

Accepted Answer

A)  $280,000. 
B)  $440,000. 
C)  $240,000. 
D)  $340,000. 
A)  $280,000. 
B)  $440,000. 
C)  $240,000. 
D)  $340,000.

Question 3

Which of the following is not expressed in terms of a percentage?

Accepted Answer

A)  Return on assets 
B)  Debt to equity ratio 
C)  Asset turnover 
D)  Profit margin 
A)  Return on assets 
B)  Debt to equity ratio 
C)  Asset turnover 
D)  Profit margin

Question 4

The two parts of a corporation's stockholders' equity section are contributed capital and retained earnings.

Accepted Answer

A) True 
 B)False

Question 5

Use the following information for the first year of operations for Layton Novelties,Inc.to answer the following question.Use ending balances whenever average balances are required for computing ratios.     Cash flow from operating expenses for Layton Novelties is $32,400.
The cash flow yield for Layton Novelties is

Accepted Answer

A)  1.5 times. 
B)  .67 times 
C)  .405 times. 
D)  2.5 times. 
A)  1.5 times. 
B)  .67 times 
C)  .405 times. 
D)  2.5 times.

Question 6

Which of the following is not considered a selling expense?

Accepted Answer

A)  Cost of goods sold 
B)  Cost of storing goods 
C)  Freight-out expense 
D)  Advertising expense 
A)  Cost of goods sold 
B)  Cost of storing goods 
C)  Freight-out expense 
D)  Advertising expense

Question 7

Advertising expense should be included in the general and administrative expenses section of a multistep income statement.

Accepted Answer

A) True 
 B)False

Question 8

Which accounting convention could cause an overload of information for the financial statement user?

Accepted Answer

A)  Consistency 
B)  Conservatism 
C)  Full disclosure 
D)  Materiality 
A)  Consistency 
B)  Conservatism 
C)  Full disclosure 
D)  Materiality

Question 9

Use this information to answer the following question.   If the income statement were prepared in a multistep form,gross margin from sales would be

Accepted Answer

A)  $159,500. 
B)  $152,000. 
C)  $142,000. 
D)  $172,000. 
A)  $159,500. 
B)  $152,000. 
C)  $142,000. 
D)  $172,000.

Question 10

Match each definition with the correct term below.
-Relevance

Accepted Answer

A) Information should have direct bearing on a decision. 
B) The quality or accounting information that enables users to comprehend the meaning of the information they receive. 
C) The quality of accounting information that assures users that information as presented can be substantiated. 
D) The accounting convention that requires that once a company has adopted an accounting procedure,it must use it from one period to the next. 
E) The accounting convention that refers to the relative importance of an item or event.
F)The accounting convention that states that when faced with choosing between two equally acceptable procedures or estimates,accountants should choose the one that is least likely to overstate assets and income.
G)Cash and other assets that a company can reasonably expect to convert to cash,sell,or consume within one year or the company's normal operating cycle.
H)Debts that fall due more than one year in the future or beyond the normal operating cycle.
I)The amount that stockholders invest in the business.
J)Gross sales less sales returns and allowances
K)The amount a merchandiser paid for the merchandise it sold during an accounting period.
L)The income from a company's main business. 
A) Information should have direct bearing on a decision. 
B) The quality or accounting information that enables users to comprehend the meaning of the information they receive. 
C) The quality of accounting information that assures users that information as presented can be substantiated. 
D) The accounting convention that requires that once a company has adopted an accounting procedure,it must use it from one period to the next. 
E) The accounting convention that refers to the relative importance of an item or event.
F)The accounting convention that states that when faced with choosing between two equally acceptable procedures or estimates,accountants should choose the one that is least likely to overstate assets and income.
G)Cash and other assets that a company can reasonably expect to convert to cash,sell,or consume within one year or the company's normal operating cycle.
H)Debts that fall due more than one year in the future or beyond the normal operating cycle.
I)The amount that stockholders invest in the business.
J)Gross sales less sales returns and allowances
K)The amount a merchandiser paid for the merchandise it sold during an accounting period.
L)The income from a company's main business.

Question 11

Use this information to answer the following question.   If the income statement were prepared in a multistep form,income before income taxes would be

Accepted Answer

A)  $67,500. 
B)  $105,000. 
C)  $80,000. 
D)  $97,500. 
A)  $67,500. 
B)  $105,000. 
C)  $80,000. 
D)  $97,500.

Question 12

Use the information from the following single-step income statement to prepare a condensed multistep income statement in proper form.

Accepted Answer

The answer of Use the information from the following single-step...

Question 13

Use the following information for the first year of operations for Layton Novelties,Inc.to answer the following question.Use ending balances whenever average balances are required for computing ratios.     Cash flow from operating expenses for Layton Novelties is $32,400.
The cash return on assets for Layton Novelties is

Accepted Answer

A)  45 percent. 
B)  40 percent. 
C)  27 percent. 
D)  9 percent. 
A)  45 percent. 
B)  40 percent. 
C)  27 percent. 
D)  9 percent.

Question 14

Interest paid on debt would be entered on the multistep income statement in the category called

Accepted Answer

A)  selling expenses. 
B)  other revenues and expenses. 
C)  general and administrative expenses. 
D)  operating expenses. 
A)  selling expenses. 
B)  other revenues and expenses. 
C)  general and administrative expenses. 
D)  operating expenses.

Question 15

Following is a list of descriptions of concepts or conventions of accounting.Write the name of the concept or convention that is described.
a.The relative importance of an item or event.
b.Once a company has adopted an accounting procedure,it must use it from one period to the next unless a note to the financial statements informs users of a change in procedure.
c.The benefits to be gained from providing accounting information should be greater than the costs of providing it.
d.When faced with choosing between two equally acceptable procedures or estimates,accountants should choose the one that is least likely to overstate assets and income.
e.Financial statements should present all the information relevant to users' understanding of the statements.

Accepted Answer

a. Materiality 
b. C

Question 16

Earnings per share,often called net income per share,is the final figure or "bottom line" of an income statement.

Accepted Answer

A) True 
 B)False

Question 17

Income from operations is arrived after considering all except

Accepted Answer

A)  administrative salaries. 
B)  interest income. 
C)  the cost of sales. 
D)  sales returns and allowances. 
A)  administrative salaries. 
B)  interest income. 
C)  the cost of sales. 
D)  sales returns and allowances.

Question 18

Asset turnover equals

Accepted Answer

A)  net sales divided by average total assets. 
B)  average total assets divided by net income. 
C)  average total assets divided by total liabilities. 
D)  net income divided by average total assets. 
A)  net sales divided by average total assets. 
B)  average total assets divided by net income. 
C)  average total assets divided by total liabilities. 
D)  net income divided by average total assets.

Question 19

General-purpose external financial statements that are divided into subcategories are called current financial statements.

Accepted Answer

A) True 
 B)False

Question 20

Use this information to answer the following question.   If the income statement were prepared in a multistep form,income from operations would be

Accepted Answer

A)  $99,000. 
B)  $84,000. 
C)  $104,000. 
D)  $86,500. 
A)  $99,000. 
B)  $84,000. 
C)  $104,000. 
D)  $86,500.

Match each definition with the correct term below. -Cost of goods sold

Use this information to answer the following question. The total dollar amount of assets to be classified as current assets is

Which of the following is not expressed in terms of a percentage?

The two parts of a corporation's stockholders' equity section are contributed capital and retained earnings.

Which of the following is not considered a selling expense?

Advertising expense should be included in the general and administrative expenses section of a multistep income statement.

Which accounting convention could cause an overload of information for the financial statement user?

Use this information to answer the following question. If the income statement were prepared in a multistep form,gross margin from sales would be

Match each definition with the correct term below. -Relevance

Use this information to answer the following question. If the income statement were prepared in a multistep form,income before income taxes would be

Use the information from the following single-step income statement to prepare a condensed multistep income statement in proper form.

Interest paid on debt would be entered on the multistep income statement in the category called

Earnings per share,often called net income per share,is the final figure or "bottom line" of an income statement.

Income from operations is arrived after considering all except

Asset turnover equals

General-purpose external financial statements that are divided into subcategories are called current financial statements.

Use this information to answer the following question. If the income statement were prepared in a multistep form,income from operations would be

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 5: Financial Reporting and Analysis

Match each definition with the correct term below. -Cost of goods sold

Use this information to answer the following question. The total dollar amount of assets to be classified as current assets is

Which of the following is not expressed in terms of a percentage?

The two parts of a corporation's stockholders' equity section are contributed capital and retained earnings.

Which of the following is not considered a selling expense?

Advertising expense should be included in the general and administrative expenses section of a multistep income statement.

Which accounting convention could cause an overload of information for the financial statement user?

Use this information to answer the following question. If the income statement were prepared in a multistep form,gross margin from sales would be

Match each definition with the correct term below. -Relevance

Use this information to answer the following question. If the income statement were prepared in a multistep form,income before income taxes would be

Use the information from the following single-step income statement to prepare a condensed multistep income statement in proper form.

Interest paid on debt would be entered on the multistep income statement in the category called

Earnings per share,often called net income per share,is the final figure or "bottom line" of an income statement.

Income from operations is arrived after considering all except

Asset turnover equals

General-purpose external financial statements that are divided into subcategories are called current financial statements.

Use this information to answer the following question. If the income statement were prepared in a multistep form,income from operations would be

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters