Question 1

Please refer to Table 3-1 for the following questions.
Table 3-1
Jones Company
Financial Information
 
-Based on the information in Table 3-1,the change in cash for 2010 is

Accepted Answer

A) $4,000. 
B) $4,950. 
C) $5,800. 
D) $5,500.

Question 2

International Financial Reporting Standards (IFRS)is a set of principle-based accounting standards that were established by the International Accounting Standards Board (IASB).

Accepted Answer

A) True 
 B)False

Question 3

A company borrows $2,000,000 and uses the money to purchase high technology machinery for its operations.These are examples of

Accepted Answer

A) cash flow from financing and cash flow from operations. 
B) cash flow from investing and cash flow from operations. 
C) cash flow from financing and cash flow from investing. 
D) cash flow from investing and cash flow from financing.

Question 4

An income statement reports a firm's cumulative revenues and expenses from the inception of the firm through the income statement date.

Accepted Answer

A) True 
 B)False

Question 5

A firm's income statement reports the results from operating the business for a period of time,while the firm's balance sheet provides a snapshot of the firm's financial position at a specific point in time.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements about International Financial Reporting Standards (IFRS)is NOT true?

Accepted Answer

A) IFRS sets out broad and general principles that accountants should follow when preparing financial statements. 
B) IFRS leaves LESS room for discretion than GAAP does. 
C) IFRS offers simplicity but also possibly more leeway for accounting malpractice than does GAAP. 
D) In 2008,the Securities and Exchange Commission (SE
C) announced its plan to convert U.S.companies from GAAP to IFRS.

Question 7

Use the following information to calculate the company's accounting net income for the year.

Accepted Answer

A) $300,000 
B) $240,000 
C) $125,000 
D) $120,000

Question 8

The Colorado Jet Boat Company had a cash balance of $3 million at the beginning of 2010.During 2010,Sales were $8 million and expenses were $7 million.Therefore

Accepted Answer

A) the cash balance at the end of 2010 is $4 million. 
B) the cash balance at the end of 2010 must be greater than $3 million. 
C) the cash balance at the end of 2010 must be less than $11 million. 
D) the cash balance at the end of 2010 cannot be determined from the information given.

Question 9

Common-sized income statements restate the numbers in the income statement as a percentage of sales to assist in the comparison of a firm's financial performance across time and with competitors.

Accepted Answer

A) True 
 B)False

Question 10

Table 3-3 Marlett Company Financial Information  Based on the information in Table 3-3,prepare a statement of cash flows for 2010.Assume that there were no changes in any other asset or liability accounts,and that the ending cash balance for 2009 was $100.

Accepted Answer

The answer of Table 3-3 Marlett Company Financial Information ...

Question 11

It is possible for two companies to have the same financial performance,but their financial statements can be different,depending on how and when the managers choose to report certain transactions.

Accepted Answer

A) True 
 B)False

Question 12

Examples of uses of cash include

Accepted Answer

A) paying cash dividends to stockholders. 
B) borrowing an additional amount using a secured loan. 
C) selling machinery. 
D) all of the above

Question 13

Rogue Industries reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold = $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $80,000; and Taxes = $300,000.Rogue's gross profit is equal to

Accepted Answer

A) $770,000. 
B) $1,070,000. 
C) $1,100,000. 
D) $1,500,000.

Question 14

Net working capital is equal to

Accepted Answer

A) total assets minus total liabilities. 
B) current assets minus total liabilities. 
C) total operating capital minus net income. 
D) current assets minus current liabilities.

Question 15

Siskiyou Corp.has cash of $75,000; short-term notes payable of $100,000; accounts receivables of $275,000; accounts payable of $135,000: inventories of $350,000; and accrued expenses of $75,000.What is the firm's net working capital?

Accepted Answer

A) $390,000 
B) $175,000 
C) $700,000 
D) $210,000

Question 16

Please refer to Table 3-1 for the following questions.
Table 3-1
Jones Company
Financial Information
 
-Based on the information in Table 3-1,assuming that no assets were disposed of during 2010,the amount of depreciation expense was

Accepted Answer

A) $375. 
B) $500. 
C) $2,500. 
D) $3,500.

Question 17

Which of the following accounts belongs in the equity section of a balance sheet?

Accepted Answer

A) retained earnings 
B) cash 
C) long-term debt 
D) dividends

Question 18

Accounting rules specify that assets on the balance sheet must be reported at current market value,because this is the valuation most useful to potential investors.

Accepted Answer

A) True 
 B)False

Question 19

If a company's cash balance increases during the year,and the company also reports positive net income,then the company's retained earnings balance must increase.

Accepted Answer

A) True 
 B)False

Question 20

Prepare an income statement using the information given below.Make sure to identify gross profit,operating income,and net income.

Accepted Answer

The answer of Prepare an income statement using the information...

Exam 3: Understanding Financial Statements and Cash Flows

Please refer to Table 3-1 for the following questions. Table 3-1 Jones Company Financial Information -Based on the information in Table 3-1,the change in cash for 2010 is

International Financial Reporting Standards (IFRS)is a set of principle-based accounting standards that were established by the International Accounting Standards Board (IASB).

A company borrows $2,000,000 and uses the money to purchase high technology machinery for its operations.These are examples of

An income statement reports a firm's cumulative revenues and expenses from the inception of the firm through the income statement date.

A firm's income statement reports the results from operating the business for a period of time,while the firm's balance sheet provides a snapshot of the firm's financial position at a specific point in time.

Which of the following statements about International Financial Reporting Standards (IFRS) is NOT true?

Use the following information to calculate the company's accounting net income for the year.

The Colorado Jet Boat Company had a cash balance of $3 million at the beginning of 2010.During 2010,Sales were $8 million and expenses were $7 million.Therefore

Common-sized income statements restate the numbers in the income statement as a percentage of sales to assist in the comparison of a firm's financial performance across time and with competitors.

Table 3-3 Marlett Company Financial Information Based on the information in Table 3-3,prepare a statement of cash flows for 2010.Assume that there were no changes in any other asset or liability accounts,and that the ending cash balance for 2009 was $100.

It is possible for two companies to have the same financial performance,but their financial statements can be different,depending on how and when the managers choose to report certain transactions.

Examples of uses of cash include

Net working capital is equal to

Siskiyou Corp.has cash of $75,000; short-term notes payable of $100,000; accounts receivables of $275,000; accounts payable of $135,000: inventories of $350,000; and accrued expenses of $75,000.What is the firm's net working capital?

Please refer to Table 3-1 for the following questions. Table 3-1 Jones Company Financial Information -Based on the information in Table 3-1,assuming that no assets were disposed of during 2010,the amount of depreciation expense was

Which of the following accounts belongs in the equity section of a balance sheet?

Accounting rules specify that assets on the balance sheet must be reported at current market value,because this is the valuation most useful to potential investors.

If a company's cash balance increases during the year,and the company also reports positive net income,then the company's retained earnings balance must increase.

Prepare an income statement using the information given below.Make sure to identify gross profit,operating income,and net income.