Question 1

Given the below accounts,create the current assets total (show your work).

Accepted Answer

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Question 2

Why would a banker reject a company's application for a one-year loan based on information taken from the company's balance sheet?

Accepted Answer

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Question 3

Paid-in-Capital in Excess of Par would be reported on the balance sheet as:

Accepted Answer

A) a long-term investment 
B) other owners' equity 
C) contributed capital 
D) retained earnings

Question 4

The balance sheet cannot provide valuable information about

Accepted Answer

A) the length of the operating cycle 
B) priority of creditors' claims if the firm were liquidated 
C) the ability to realize cash from the sale of non-current assets 
D) all of the above

Question 5

The term "Deficit" would most likely appear on the balance sheet in the:

Accepted Answer

A) retained earnings section 
B) contributed capital section 
C) other owners' equity section 
D) long-term investment section

Question 6

Borrowing money in a manner designed to avoid having to record the resulting obligation as a liability in the financial statements is referred to as:

Accepted Answer

A) compensating balance financing 
B) off-balance sheet financing 
C) contingent financing 
D) deferred financing

Question 7

Given the following list of general ledger accounts for the Scottish Company,indicate which of the accounts would appear on the statement of financial position.

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Question 8

Equipment would be reported on the balance sheet as a(n):

Accepted Answer

A) long-term investment 
B) intangible asset 
C) current asset 
D) property,plant,and equipment asset

Question 9

Colby Enterprses is subject to a 30% tax rate and has a December 31 year-end.During 2010,the accountant discovered an error made in 2009 relative to an expenditure that was incorrectly classified as an asset when it should have been expensed.The total pre-tax amount of the error was $70,000.The prior period adjustment to beginning retained earnings will be ______ by $_______.

Accepted Answer

A) reduced $49,000 
B) reduced $21,000 
C) increased $70,000 
D) increased $49,000

Question 10

A company has 30,000 shares authorized and 13,000 shares issued (common stock).The par value equals $ 1.00 per share.What value will be placed in the account "paid-in capital in excess of par?"

Accepted Answer

A) $ 13,000 
B) $ 30,000 
C) $ 43,000 
D) not enough information to answer the question

Question 11

Which of the following is not an intangible asset?

Accepted Answer

A) Patent 
B) Goodwill 
C) Oil Lease 
D) Copyright

Question 12

Given the following list of general ledger accounts for the Shenghai Company,choose the appropriate accounts and show how they would be reported (using the proper headings and format)in the current asset and current liability sections of the statement of financial position.
Accounts Receivable
Accounts Payable
Accumulated Depreciation-Buildings
Administrative Expenses
Allowance for Uncollectible Accounts
Available-for-Sale Securities
Bonds Payable
Buildings
Cash
Common Stock
Cost of Goods Sold
Customer Deposits
Deferred Income Tax Payable
Discount on Bonds Payable
Gain on Sale of Equipment
Income Tax Payable
Interest Income
Lease Obligations
Loss on Sale of Bonds
Market Adjustment - Trading Securities
Merchandise Inventory
Note Payable (due in 6 months)Prepaid Expenses
Retained Earnings
Sales
Selling Expenses
Trading Securities
Treasury Stock
Unrealized Gains and Losses
Wages Payable

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Question 13

Create the current asset section of the balance sheet.Include a heading and a list of at least 5 accounts typically found in the current asset section of the balance sheet.

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Question 14

What is the value of current liabilities? $$\begin{array} { l l l r } 
\text { Cash } & \$ 50,000 & \text { Irventory } & \$ 9,000 \
\text { Sales } & \$ 30,000 & \text { Accounts Payble } & \$ 9,000 \
\text { Cost of Goods Sold } & \$ 8,000 & \text { Accourts Receivable } & \$ 18,000 \
\text { Prepaid Irsurance } & \$ 8,000 & \text { Insurance Expense } & \$ 9,000 \
& & \text { Long-Term Liabilities (due withirl one year) } & \$ 30,000
\end{array}$$

Accepted Answer

A) $ 30,000 
B) $ 39,000 
C) $ 42,000 
D) $ 44,000

Question 15

The allowance for Uncollectible Accounts would be reported on the balance sheet in the:

Accepted Answer

A) plant asset section 
B) investment section 
C) current asset section 
D) intangible asset section

Question 16

Preferred Stock issued by a company would be reported on that company's balance sheet as:

Accepted Answer

A) retained earnings 
B) contributed capital 
C) other owners' equity 
D) a long-term investment

Question 17

Trading Securities would be reported on the balance sheet as a(n):

Accepted Answer

A) plant asset 
B) current asset 
C) intangible asset 
D) long-term investment

Question 18

Belmont Industries is subject to a 35% tax rate and has a December 31 year-end.During 2010,the accountant discovered an error made in 2009 relative to a capital expenditure that was incorrectly expensed.The total pre-tax amount of the error was $67,500.The prior period adjustment to beginning retained earnings will equal:

Accepted Answer

A) $(67,500) 
B) $(23,625) 
C) $ 67,500 
D) $ 43,875

Question 19

Plant assets are reported on the balance sheet at their:

Accepted Answer

A) fair value 
B) book value 
C) net realizable value 
D) lower of cost or market value

Question 20

Matrix and Associates reports depreciation expense of $100,000 but deducts $150,000 depreciation on its tax return.Which of the following statements is correct?

Accepted Answer

A) Matrix is breaking the law 
B) Matrix will report a deferred tax asset 
C) Matrix will report a deferred tax liability 
D) Matrix will report income tax expense equal to income tax payable

Exam 18: Company Performance: Owners Equity and Financial Position