Question 1

The mission of the Securities & Exchange Commission (SEC) is to develop generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 2

Farrell Company has rent expense, wages expense, and utilities expense. Where will the company present these expenses on the income statement?

Accepted Answer

A) As a component of net sales. 
B) As a component of gross profit. 
C) After income from operations. 
D) Prior to income from operations. 
A) As a component of net sales. 
B) As a component of gross profit. 
C) After income from operations. 
D) Prior to income from operations.

Question 3

Which of the following statements is correct?

Accepted Answer

A) Income from operations increases when common stock is sold for more than par value. 
B) The accrual of research and development costs does not affect the net profit margin ratio. 
C) The payment of an accrued liability decreases total asset turnover. 
D) The declaration and payment of a cash dividend increases the return on assets ratio. 
A) Income from operations increases when common stock is sold for more than par value. 
B) The accrual of research and development costs does not affect the net profit margin ratio. 
C) The payment of an accrued liability decreases total asset turnover. 
D) The declaration and payment of a cash dividend increases the return on assets ratio.

Question 4

Huron has provided the following year-end balances: Cash, $25,000
Patents, $7,900
Accounts receivable, $9,300
Property, plant, and equipment, $98,700
Prepaid insurance, $3,600
Accumulated depreciation, $10,000
Inventory, $37,000
Retained earnings, 15,500
Trademarks, $12,600
Accounts payable, $8,000
Goodwill, $11,000
How much are Huron's current assets?

Accepted Answer

A) $85,900. 
B) $71,300. 
C) $74,900. 
D) $102,100. 
A) $85,900. 
B) $71,300. 
C) $74,900. 
D) $102,100.

Question 5

Determine the effect of the following transactions on the identified financial statement components and ratios. Code your answers as follows:
A: If the transaction results in an increase in the financial statement component or ratio.
B: If the transaction results in a decrease in the financial statement component or ratio.
C: If the transaction does not affect the financial statement component or ratio.
Transaction 1: A company paid for research and development costs incurred to develop a patent.
Net income _____
Property, plant, and equipment _____
Stockholders' equity _____
Net profit margin ratio _____
Transaction 2: Inventory was purchased on account.
Net income _____
Current assets _____
Current liabilities _____
Return on assets ratio _____

Accepted Answer

Transaction 1: A company paid for resear

Question 6

Which of the following tasks does the Financial Accounting Standards Board (FASB) perform?

Accepted Answer

A) Overseeing the work of the Securities & Exchange Commission (SE
C) . 
B) Overseeing the work of the Public Company Accounting Oversight Board (PCAO
B) . 
C) The responsibility for protecting investors and maintaining the integrity of the securities markets. 
D) The development of generally accepted accounting principles. 
A) Overseeing the work of the Securities & Exchange Commission (SE
C) . 
B) Overseeing the work of the Public Company Accounting Oversight Board (PCAO
B) . 
C) The responsibility for protecting investors and maintaining the integrity of the securities markets. 
D) The development of generally accepted accounting principles.

Question 7

Preparers of the statement of cash flow must choose the direct or indirect method for each activity section of the statement.

Accepted Answer

A) True 
 B)False

Question 8

Determine the effect of the following transactions on the identified financial statement components and ratios. Code your answers as follows:
A: If the transaction results in an increase in the financial statement component or ratio.
B: If the transaction results in a decrease in the financial statement component or ratio.
C: If the transaction does not affect the financial statement component or ratio.
Transaction 1: A company accrued interest expense at year-end.
Net income _____
Assets _____
Stockholders' equity _____
Total asset turnover ratio _____
Transaction 2: A company declared and paid dividends to stockholders.
Net income _____
Assets _____
Stockholders' equity _____
Return on assets ratio _____

Accepted Answer

Transaction 1: A company accrued interes

Question 9

The Willie Company has provided the following information: Operating expenses were $345,000;
Income from operations was $415,000;
Net sales were $1,100,000;
Interest expense was $71,000;
Loss from sale of investments was $87,000;
Income tax expense was $58,000.
What was Willie's net income?

Accepted Answer

A) $373,000. 
B) $328,000. 
C) $199,000. 
D) ($156,000). 
A) $373,000. 
B) $328,000. 
C) $199,000. 
D) ($156,000).

Question 10

Twin Lakes, Inc. reported the following December 31 amounts in its financial statements:   Requirements:
Compute the following for the 2017 ratios: 
A.Gross profit percentage
B.Net profit margin
C.Total asset turnover
D.Return on assets

Accepted Answer

A. ($75.0 ÷ $250.0) = .30 or 3

Question 11

The following income statement was reported for Bauer Inc. for the first year of operations ending December 31, 2016 reported (in thousands of dollars):   Requirement: 
A.Calculate gross profit percentage.
B.Calculate net profit margin.
C.Calculate earnings per share if there are 200,000 shares of common stock outstanding.

Accepted Answer

A. 40% (Sales $24,500,000) minus Cost of

Question 12

Which of the following statements is false?

Accepted Answer

A) The board of directors meets with the external auditors to discuss management's compliance with their financial reporting obligations. 
B) The external auditors are selected by the Securities & Exchange Commission (SE
C) . 
C) The Securities & Exchange Commission (SE
C)  requires publically traded companies to have their financial statements audited by an independent accountant. 
D) The external auditors assume some responsibility with respect to the fairness of the financial statements. 
A) The board of directors meets with the external auditors to discuss management's compliance with their financial reporting obligations. 
B) The external auditors are selected by the Securities & Exchange Commission (SE
C) . 
C) The Securities & Exchange Commission (SE
C)  requires publically traded companies to have their financial statements audited by an independent accountant. 
D) The external auditors assume some responsibility with respect to the fairness of the financial statements.

Question 13

Harley Company has provided the following selected financial information.   What is Harley's 2016 net profit margin (rounded)?

Accepted Answer

A) 5.0% 
B) 6.1% 
C) 6.7% 
D) 13.2% 
A) 5.0% 
B) 6.1% 
C) 6.7% 
D) 13.2%

Question 14

The Financial Accounting Standards Board (FASB) oversees the work of the Public Company Accounting Oversight Board (PCAOB).

Accepted Answer

A) True 
 B)False

Question 15

Which of the following transactions will decrease both the return on assets ratio and the total asset turnover ratio?

Accepted Answer

A) Purchasing land by signing a note payable. 
B) Accruing interest expense at year-end. 
C) Accruing interest revenue at year-end. 
D) Collecting cash from an account receivable. 
A) Purchasing land by signing a note payable. 
B) Accruing interest expense at year-end. 
C) Accruing interest revenue at year-end. 
D) Collecting cash from an account receivable.

Question 16

FocusMore, Inc., had the following list of accounts taken from its adjusted trial balance at December 31, 2016:   Required:
Prepare a multiple step income statement for the year ended December 31, 2016. (Include gross profit, but ignore income taxes.)

Accepted Answer

The answer of FocusMore, Inc., had the following list of...

Question 17

The return on assets ratio may increase when sales increase.

Accepted Answer

A) True 
 B)False

Question 18

The following data were taken from the adjusted trial balance of Kent Corporation.   Requirement:
Prepare a classified balance sheet in good form at December 31, 2016. (Ignore income taxes).

Accepted Answer

@#IMG-DLM& *$23,000 (January 1

Question 19

The Callie Company has provided the following information: Operating expenses were $231,000;
Cost of goods sold was $376,000;
Net sales were $940,000;
Interest expense was $32,000;
Gain on sale of a building was $76,000;
Income tax expense was $151,000.
What was Callie's income from operations (operating income)?

Accepted Answer

A) $333,000. 
B) $188,000. 
C) $156,000. 
D) $232,000. 
A) $333,000. 
B) $188,000. 
C) $156,000. 
D) $232,000.

The mission of the Securities & Exchange Commission (SEC) is to develop generally accepted accounting principles.

Farrell Company has rent expense, wages expense, and utilities expense. Where will the company present these expenses on the income statement?

Which of the following statements is correct?

Which of the following tasks does the Financial Accounting Standards Board (FASB) perform?

Preparers of the statement of cash flow must choose the direct or indirect method for each activity section of the statement.

The Willie Company has provided the following information: Operating expenses were $345,000; Income from operations was $415,000; Net sales were $1,100,000; Interest expense was $71,000; Loss from sale of investments was $87,000; Income tax expense was $58,000. What was Willie's net income?

Twin Lakes, Inc. reported the following December 31 amounts in its financial statements: Requirements: Compute the following for the 2017 ratios: A.Gross profit percentage B.Net profit margin C.Total asset turnover D.Return on assets

Which of the following statements is false?

Harley Company has provided the following selected financial information. What is Harley's 2016 net profit margin (rounded)?

The Financial Accounting Standards Board (FASB) oversees the work of the Public Company Accounting Oversight Board (PCAOB).

Which of the following transactions will decrease both the return on assets ratio and the total asset turnover ratio?

FocusMore, Inc., had the following list of accounts taken from its adjusted trial balance at December 31, 2016: Required: Prepare a multiple step income statement for the year ended December 31, 2016. (Include gross profit, but ignore income taxes.)

The return on assets ratio may increase when sales increase.

The following data were taken from the adjusted trial balance of Kent Corporation. Requirement: Prepare a classified balance sheet in good form at December 31, 2016. (Ignore income taxes).

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments, Financial Statements, and the Quality of Earnings

Reporting and Interpreting Sales Revenue, Receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

PPA: Reporting and Interpreting Investments in Other Corporations

Filters

Exam 5: Communicating and Interpreting Accounting Information

The mission of the Securities & Exchange Commission (SEC) is to develop generally accepted accounting principles.

Farrell Company has rent expense, wages expense, and utilities expense. Where will the company present these expenses on the income statement?

Which of the following statements is correct?

Which of the following tasks does the Financial Accounting Standards Board (FASB) perform?

Preparers of the statement of cash flow must choose the direct or indirect method for each activity section of the statement.

The Willie Company has provided the following information: Operating expenses were $345,000; Income from operations was $415,000; Net sales were $1,100,000; Interest expense was $71,000; Loss from sale of investments was $87,000; Income tax expense was $58,000. What was Willie's net income?

Twin Lakes, Inc. reported the following December 31 amounts in its financial statements: Requirements: Compute the following for the 2017 ratios: A.Gross profit percentage B.Net profit margin C.Total asset turnover D.Return on assets

Which of the following statements is false?

Harley Company has provided the following selected financial information. What is Harley's 2016 net profit margin (rounded)?

The Financial Accounting Standards Board (FASB) oversees the work of the Public Company Accounting Oversight Board (PCAOB).

Which of the following transactions will decrease both the return on assets ratio and the total asset turnover ratio?

FocusMore, Inc., had the following list of accounts taken from its adjusted trial balance at December 31, 2016: Required: Prepare a multiple step income statement for the year ended December 31, 2016. (Include gross profit, but ignore income taxes.)

The return on assets ratio may increase when sales increase.

The following data were taken from the adjusted trial balance of Kent Corporation. Requirement: Prepare a classified balance sheet in good form at December 31, 2016. (Ignore income taxes).

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments, Financial Statements, and the Quality of Earnings

Reporting and Interpreting Sales Revenue, Receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

PPA: Reporting and Interpreting Investments in Other Corporations

Filters