Baruch College - Accounting 2101 - All
In Cash Flow Reporting what is the income at the point of sale? -$3 -Loss of $5 -It depends on the measuring system -$8 -$0
$0
In Cash Flow reporting A/R is measured at: -$8 -$5 -$0 -It depends on the measuring system -$3
$0
In Cash Flow reporting inventory is measured at -$5 -$8 -$0 -$3 -It depends on the measuring system
$0
In the lecture what is the Sacrifice value of the A/R? -It depends on the reporting method used -$3 -$8 -$5
$5
In the lecture what is the Sacrifice value of the Pen? -It depends on the reporting method used -$3 -$5 -$8
$5
The marketing department is involved in which step (1,2,3,4 or 5) in the Operating cycle?
2
We always sell pens at $8. We sold a pen for $7 because it was damaged. Record the sale at: -$7 -$8
$7
In Cash Flow Reporting what is the income at the time of collection of the A/R? -$8 -Loss of $5 -It depends on the measuring system -$0 -$3
$8
In the lecture what is the Benefit value of the A/R? -$8 -It depends on the reporting method used -$3 -$5
$8
In the lecture what is the Benefit value of the Pen? -$5 -$8 -$3 -It depends on the reporting method used
$8
To the nearest %, paying on the 15th day for a 1/15, net/30, gives an annual return of (just write the number)
24
29) Which statement is true? A) All Income Statement accounts are Temporary B) All Income Statement accounts are Permanent C) Some Income Statement accounts are Temporary and some are Permanent
A
Is it possible to make an entry which changes only one account? -Yes -No
-No
What I can I add to a number without changing it?
0
For which step (1,2,3,4, or 5) in the Operating cycle is there a difference between manufacturers and retailers?
1
What number can I multiply something by without changing it
1
To the nearest %, paying on the 30th day for a 1/30, net/60, gives an annual return of (just write the number)
12
A company has 12,247 customers they extend credit to, how many total A/R will they have (just type the number, no commas)?
12248
How many types of inventory are in the factory
2
To the nearest %, paying on the 10th day for a 2/10, net/30, gives an annual return of )just write the number)
36
13) For most businesses what is the critical event? A) Sale of Inventory B) Collecting Cash for Receivables C) Acquiring Inventory
A
14) During a Sale in the operating cycle, what happens to cash? A) Stays the Same B) Decreases C) Increases D) It depends
A
17) Usually we measure Accounts Receivable at A) Benefit Value B) $0 C) Sacrifice Value
A
21) Prior to year-end adjusting entries, what would explain the Allowance for Uncollectible Accounts having a debit balance? A) The amount of actual uncollectible accounts in the current year was greater than the estimate of uncollectible accounts made at the end of the prior year. B) The amount of credit sales in the current year was greater than the amount of credit sales made in the prior year. C) The amount of actual uncollectible accounts in the current year was less than the estimate of uncollectible accounts made at the end of the prior year. D) The amount of cash collections from customers in the current year was less the amount of cash collections from customers in the prior year.
A
24) Which of the following are made when the business does something A) Transaction Entries B) Adjusting Entries C) Closing Entries
A
27) The usual balance in a Contra-Dividend account is a: A) CR B) It depends C) DR
A
3) Sooner Company had a net income of $8,000, $5,000, $12,000, and $10,000 over the first four years of the company's existence. If the average annual amount of dividends paid over the last four years is $3,000, what is the ending retained earnings balance? A) $23,000. B) $47,000. C) $35,000. D) $7,000.
A
32) The usual balance in a Contra-Owners' Equity account is a: A) DR B) It depends C) CR
A
35) Which of the following are made BEFORE a Trial Balance is prepared? A) Transaction Entries B) Adjusting Entries C) Closing Entries
A
42) For the past five years, Mookie Consulting Services reported the following annual net income and dividend amounts: Year Net Income Dividends 1 $22,000 $2,000 2 17,000 2,000 3 9,000 1,000 4 14,000 3,000 5 25,000 4,000 If Mookie had Retained Earnings of $88,000 at the end of year 5, what was the company's Retained Earnings at the beginning of Year 1? A) $13,000. B) $25,000. C) $1,000. D) $7,000.
A
47) Which of the following items would not appear in an income statement? A) Cash. B) Advertising expense. C) Salaries expense. D) Service revenue.
A
5) The Statement of Cash Flows always balances. A) False B) True
A
50) The adjusting entry required when amounts previously recorded as deferred revenues are earned by providing goods or services to customers includes: A) A debit to a liability. B) A debit to an asset. C) A credit to a liability. D) A credit to an asset.
A
64) What is usually a better predictor of future cash flow to the firm? A) Past Income B) Past Cash Flows
A
77) In Cash Flow reporting Accounts Receivable is measured at A) $0 B) Sacrifice Value C) It depends on the measuring system D) Benefit Value
A
80) Consider the following account balances of the Shattuck Law Firm at the end of the year: Accounts Payable $4,400 Salaries Expense 12,800 Cash 1,700 Common Stock 2,400 Service Revenue 8,300 Supplies 4,300 Retained Earnings 1,100 Utilities Expense 5,000 How many of these accounts would appear in Shattuck's year-end income statement? A) Three. B) Four. C) Five. D) Two.
A
82) After the Third STEP in the Operating Cycle the firm has? A) Cash B) Account Receivable C) Inventory D) None of the other three
A
86) A company received an order from a customer in June for services to be provided. Those services were provided in July, and the customer paid the full amount in August. According to the revenue recognition principle, in which month should the company record revenue? A) July. B) August. C) Evenly over the three months. D) June.
A
88) Consider the following transactions: Issued common stock for cash. Purchased equipment by signing a note payable. Paid rent for the current month. Collected cash from customers on account. How many of these four transactions increased the given company's total assets? A) Two. B) Four. C) Three. D) One.
A
9) Which of the following are made AFTER the financial statements are prepared? A) Closing Entries B) Adjusting Entries C) Transaction Entries
A
94) Following are transactions of Gotebo Tanners, Inc., a new company, during the month of January: 1. Issued 10,000 shares of common stock for $15,000 cash. 2. Purchased land for $12,000, signing a note payable for the full amount. 3. Purchased office equipment for $1,200 cash. 4. Received cash of $14,000 for services provided to customers during the month. 5. Purchased $300 of office supplies on account. 6. Paid employees $10,000 for their first month's salaries. How many of these transactions decreased Gotebo's total assets? A) One. B) Four. C) Two. D) Three.
A
98) The Income Statement is a: A) Video B) Snapshot
A
Investors and Creditors are interested in which of these entries? A) Transaction Entries B) Adjusting Entries C) Closing Entries
A and B
Which is generally higher? -A firm's Cash Flow -A firm's Net Income
A firm's Cash Flow
Which is more of a fact and less of a fairy tale? -A firm's Net Income -A firm's Cash Flow
A firm's Cash Flow
Which is simpler? -A firm's Cash Flow -A firm's Net Income
A firm's Cash Flow
Which is better for predicting a firm's future cash flow? -A firm's Past Net Income -A firm's Past Cash Flow
A firm's Past Net Income
Which is better for predicting a firm's future net income? -A firm's Past Cash Flow -A firm's Past Net Income
A firm's Past Net Income
Which is better for predicting a firm's future stock return? -A firm's Past Net Income -A firm's Past Cash Flow
A firm's Past Net Income
59) Investors and Creditors are interested in which of these entries? A) Transaction Entries B) Adjusting Entries C) Closing Entries
AB
Liquidations A) Increase Income for LIFO companies B) Increase Taxes for LIFO companies C) Increase Taxes for FIFO companies D) Increase Income for FIFO companies
AB
What are the most important Cash Inflows from Financing Activities A) Issuing Bonds B) Issuing Stocks C) Paying Dividends D) Buying treasury Stock E) Operating Profits
AB
What are the two most common Inventory Flow assumptions? A) LIFO B) FIFO C) Weighted Average D) Specific Identification
AB
Which of the following are Cash Outflows from Investing? A)Purchase a Building B)Purchase a Truck C)Purchase Inventory D)Purchase Treasury Stock
AB
Which of the following are classified as Accounts Receivable? A) Monies that customers owe us from sale of merchandise. B) Monies that customers owe us from providing a service. C) Tax refunds owed to us by the IRS. D) Interest Receivable. E) Loans we made to a customer. F) Loans we made to an employee.
AB
Which of the following are made BEFORE the financial statements are prepared? A) Transaction Entries B) Adjusting Entries C) Closing Entries
AB
Which type of inventory is in a factory? A) Raw Materials B) Work in Process C) Finished Goods D) Direct Labor E) Overhead
AB
92) Which of the following must Debits equal Credits A) Transaction Entries B) Closing Entries C) Adjusting Entries
ABC
For which of the following must Debits equal Credits? A)Transaction Entries B)Adjusting Entries C)Closing Entries
ABC
In a natural resource, the quantity (for instance barrels of oil) reported on the financial statements depends on A) geological estimates B) Market Value of oil C) Extraction costs of the oil D) Interest rates
ABC
Financial Accounting is done for whom: A) Actual Investors B) Potential Investors C) Actual Creditors D) Potential Creditors E) the IRS F) Internal Managers
ABCD
To do math with Ruritanian Rubis and Euros A) Translate the Rubis to Euros B) Translate the Euros to Rubis C) Translate both the Euros and Rubis to Dollars D) Translate both the Euros and Rubis to Japanese Yen E) Translate both the Euros and Rubis to ounces of gold
ABCDE
Which of these require a journal entry? A) Cash Dividends B) Small Stock Dividends C) Stock Splits D) Large Stock Dividends
ABD
40) Which of the following are classified as Accounts Receivable? A) Monies that customers owe us for providing a service. B) Tax refunds owed to us by the IRS. C) Monies that customers owe us from sale of merchandise. D) Loans we made to a customer.
AC
76) Which of the following are made ONLY at year end A) Adjusting Entries B) Transaction Entries C) Closing Entries
AC
What is included in Work in Process inventory? A) Raw Materials B) Selling and Administrative costs C) Finished Goods D) Direct Labor E) Overhead
ADE
After the Second STEP in the Operating Cycle the firm has?
Account Receivable
The Trueblood Criterion is used by: -Accountants -Managers when reporting to the IRS -Managers reporting to the public -Internal Management reports (Managerial Accounting)
Accountants
Choose one: -Accountants prefer to report harder numbers rather than softer numbers -Accountants have no preference when it comes to reporting softer and harder numbers -Accountants prefer to report softer numbers rather than harder numbers
Accountants prefer to report harder numbers rather than softer numbers
The contra asset account associated with Building and Equipment is called (2 words)
Accumulated Depreciation
When a company has a Defined Benefit Pension they have to hire a(n) (1 word)
Actuary
When a company sells shares, where do they put the difference between the price of the shares sold and the par value of the shares sold (4words)?
Additional Paid in Capital
Where do we put gains/losses on sale of Treasury Stock (cost method)? -Income Statement -adjustments to total Equity -Additional Paid in Capital / Retained Earnings -there is no gain or loss on sale of Treasury Stock
Additional Paid in Capital / Retained Earnings
Which statement is true? -Some Balance Sheet accounts are Permanent and some Balance Sheet accounts are Temporary. -All Balance Sheet accounts are Temporary -All Balance Sheet accounts are Permanent
All Balance Sheet accounts are Permanent
Which statement is true? -Some Income Statement accounts are Permanent and some Income Statement accounts are Temporary. -All Income Statement accounts are Temporary -All Income Statement accounts are Permanent
All Income Statement accounts are Temporary
Calculating Ending Inventory and Cost of Goods Sold is what kind of problem (1 word)
Allocation
When you are developing an entry -Always do the Debits first. -Always do the simple parts first.
Always do the simple parts first.
When intangible assets, like franchises or patents, die, it is called (2 words)
Amortization Expense
Is goodwill an -Asset -Expense
Asset
Prepaid Rent is what kind of account? -Dividends -Asset -Liability -Expense -Revenue
Asset
In the Allowance Method when we do the year end adjusting entry for Bad Debts -Assets stay the same, Net Income stays the same. -It depends on the balance in the Allowance account before we make the entry. -Assets increase, Net Income increases. -Assets decrease, Net Income decreases
Assets decrease Net Income decreases
In a Stock Dividend -Assets don't change, Liabilities don't change. -Assets decrease, Liabilities decrease. -Assets decrease, Liabilities increase. -Assets increase, Liabilities decrease. -Assets increase, Liabilities increase.
Assets don't change, Liabilities don't change
In a Stock Split -Assets increase, Liabilities increase. -Assets don't change, Liabilities don't change. -Assets increase, Liabilities decrease. -Assets decrease, Liabilities increase. -Assets decrease, Liabilities decrease.
Assets don't change, Liabilities don't change.
In the Allowance Method when we write off a receivable -Assets decrease, Net Income decreases -Assets increase, Net Income increases. -Assets stay the same, Net Income stays the same.
Assets stay the same Net Income stays the same
In the Allowance Method when a receivable is resurrected -Assets stay the same, Net Income stays the same. -Assets increase, Net Income increases. -Assets decrease, Net Income decreases
Assets stay the same, Net Income stays the same
The Basic Accounting Equation: ____________ = _______________ + ______________ ______________ (4 words)
Assets, Liabilities, Owner's Equity
Which is the LEAST important number of shares? -Authorized -Issued -Outstanding
Authorized
19) Red Company has the following information: Net credit sales = $400,000 Net income = $100,000 Average total assets = $80,000 Average accounts receivable = $20,000 What is Red's average collection period (rounded to the nearest whole day)? A) 73 days. B) 18 days. C) 9 days. D) 5 days.
B
20) When a company pays cash for equipment, what is the effect on the accounting equation for that company? A) Decrease assets and decrease liabilities. B) No change. C) Increase assets and increase liabilities. D) Increase assets and increase stockholders' equity.
B
25) Usually we pick up Income at: A) Collection of a Receivable B) Point of Sale C) Acquisition of Inventory
B
28) Consider the following transactions: Issued common stock for cash. Purchased equipment by signing a note payable. Provided services to customers on account. Collected cash from customers on account. How many of these four transactions increased the given company's total liabilities? A) Three. B) One. C) Two. D) Four.
B
30) If a Trial Balance balances A) all account balances must be correct B) some account balances may be wrong
B
31) An alternative form of the accounting equation is: A) Stockholders' Equity = Assets + Liabilities. B) Assets − Liabilities = Stockholders' Equity. C) Net Income = Revenues − Expenses. D) Assets = Liabilities − Stockholders' Equity.
B
34) The usual balance in a Contra-Liability account is a: A) It depends B) DR C) CR
B
36) Marketing is involved in which step in the Operating cycle? A) Fourth B) Second C) Third D) First
B
37) After the First STEP in the Operating Cycle the firm has? A) Cash B) Inventory C) None of the other three D) Account Receivable
B
38) We always sell pens at $8. We sold a pen for $7 because it was damaged. Record the sale at A) It depends B) $7 C) $8
B
46) A company has 1,384 customers they extend credit to, how many total A/R will they have A) None of the other three B) 1,385 C) 1 D) 1,384
B
48) In a Balanced set of Accounting Records, EVERY Account must balance. A) True B) False
B
55) Sandburg Veterinarian reports the following information for the year: Net credit sales $120,000 Average accounts receivable 20,000 Cash collections on credit sales 100,000 What is Sandburg's receivables turnover ratio? A) 1.2. B) 6.0. C) 0.2. D) 5.0.
B
57) Which of the following is possible for a particular business transaction? A) Increase assets; Decrease liabilities B) Decrease assets; Increase assets C) Decrease liabilities; Increase expenses D) Decrease assets; Increase stockholders' equity
B
60) How many of the following transactions would affect operating cash flows reported in the statement of cash flows (all transaction involve cash)? Borrowed $50,000 from the bank Purchased $12,000 in supplies Provide services to customers for $27,000 Paid the utility bill of $750 Purchased a delivery truck for $12,000 Received $25,000 from issuing common stock A) Four. B) Three. C) Two. D) One.
B
65) On September 30, MFP Co. paid employee salaries of $7,000, including $1,000 it owed to its employees last month. What are the effects of this transaction on the accounting equation? A) Assets decreased, expenses decreased, and liabilities increased. B) Assets decreased, liabilities decreased, and expenses increased. C) Assets increased, expenses increased, and liabilities decreased. D) Expenses decreased, liabilities decreased, and assets decreased. E) Expenses increased, liabilities increased, and assets increased.
B
66) The Income Statement always balances. A) True B) False
B
68) Is it possible to make an entry which changes only one account? A) Yes B) No
B
7) If the liabilities of a company increased by $55,000 during a month and the stockholders' equity decreased by $21,000 during that same month, did assets increase or decrease and by how much? A) $76,000 increase. B) $34,000 increase. C) $55,000 increase. D) $34,000 decrease.
B
71) If total change in cash = $44,000, net operating cash flows = $22,000, and net investing cash flows = ($13,000); then net financing cash flows = A) $45,000. B) $35,000. C) $15,000. D) $25,000.
B
72) The Statement of Cash Flows is a: A) Snapshot B) Video
B
74) Using the information below from the accounting records of Thomas Corporation, stockholders' claims to the company's resources amount to: Assets $1,200,000 Liabilities $800,000 Net income $100,000 Retained earnings $250,000 A) $1,200,000. B) $400,000. C) $800,000. D) $250,000.
B
79) When Managers report they A) Always try to look bad B) Sometimes like to look good, and sometimes like to look bad C) Always try to look good
B
84) Of the following, the most important objective for financial accounting is to provide information useful for: A) Increasing future profits. B) Predicting cash flows. C) Providing accountability. D) Determining taxable income.
B
85) The third step in the Operating Cycle is called? A) Purchase B) Collection C) Sale D) Manufacture
B
89) In the Allowance Method when we collect on a previously written off receivable A) Assets increase, Net Income increases. B) Assets stay the same, Net Income stays the same. C) Assets decrease, Net Income decreases D) It depends
B
97) The usual balance in a Contra-Expense account is a: A) DR B) CR C) It depends
B
Does a balance sheet work with present value concepts? -Yes -No
No
Does a partnership pay taxes? -Yes -No
No
26) Which of the following are made BEFORE the financial statements are prepared? A) Closing Entries B) Adjusting Entries C) Transaction Entries
BC
Which of the following are made ONLY at year end: A) Transaction Entries B)Adjusting Entries C) Closing Entries
BC
Accounts Receivable are usually measured at -Sacrifice Value -Benefit Value
Benefit Value
Usually we measure A/R at: -Benefit Value -Sacrifice Value -$0
Benefit Value
Income in the operating cycle equals -Sacrifice Value Minus Benefit Value -It depends on the Measuring system. -Benefit Value Plus Sacrifice Value -Benefit Value Minus Sacrifice Value
Benefit Value Minus Sacrifice Value
The ultimate goal of doing accounting is to (3 words):
Bill the Client
Which is riskier when raising money for a business: -Borrowing is always riskier than issuing shares -Issuing shares is always riskier than borrowing -there is no general rule, it depends on the terms of the borrowing or issuing the shares
Borrowing is always riskier than issuing shares
A company in NY is buying goods from a Japanese company. The goods are sold FOB San Francisco port -A company in NY is buying goods from a Japanese company. The goods are sold FOB San Francisco port -The freight from Japan to San Francisco is an asset, the freight from San Francisco to New York is an expense -Both the freight from Japan to San Francisco and from San Francisco to New York are assets -Both the freight from Japan to San Francisco and from San Francisco to New York are expenses
Both the freight from Japan to San Francisco and from San Francisco to New York are expenses
THIS year a company made an error in its ending inventory -Neither this year's Balance Sheet nor Income Statement will be wrong -This year's Balance Sheet will be correct but the Income Statement will be wrong -Both this year's Balance Sheet and Income Statement will be wrong -This year's Balance Sheet will be wrong but the Income Statement will be correct
Both this year's Balance Sheet and Income Statement will be wrong
Define Business (4 words)
Buy Low Sell High
Define Business in 4 words
Buy Low Sell High
Business in four words:
Buy low sell high
Freight on FOB Shipping Point is paid by the -Seller -Buyer
Buyer
1) The second step in the Operating Cycle is called? A) Purchase B) Manufacture C) Sale D) Collection
C
10) How many of the following events would require an expense to be recorded? Ordering office supplies Hiring a receptionist Paying employees' salaries for the current month Receiving but not paying a current utility bill Paying for insurance in advance A) Four. B) One. C) Two. D) Three.
C
11) The primary focus for financial accounting information is to provide information useful for: A) Investment decisions but not credit decisions. B) Credit decisions but not investment decisions. C) Investment decisions and credit decisions. D) Neither investment decisions nor credit decisions
C
12) Which of the following best explains the meaning of total stockholders' equity? A) The amount of common stock less dividends over the life of the company. B) The difference between total revenues and total expenses, less dividends for the year. C) The amount of capital invested by stockholders plus profits retained over the life of the company. D) All revenues, expenses, and dividends over the life of the company.
C
2) The usual balance in a Contra-Revenue account is a: A) CR B) It depends C) DR
C
39) On January 1, Brad Inc. sold $30,000 in products to a customer on account. Then on January 10, Brad collected the cash on that account. What is the impact on Brad's accounting equation from the collection of cash on January 10? A) Assets increase and stockholders' equity increases. B) Assets increase and liabilities decrease. C) No net effect on the accounting equation. D) Assets decrease and liabilities decrease.
C
4) A company orders office supplies in June. Those supplies are received and paid for in July. The supplies are used in August. In which month should the company record supplies expense? A) June. B) Evenly over the three months. C) August. D) July.
C
41) In Cash Flow reporting inventory is measured at A) It depends on the measuring system B) Sacrifice Value C) $0 D) Benefit Value
C
43) Emmitt had the following final balances after the first year of operations: assets, $55,000; stockholders' equity, $25,000; dividends, $3,000; and net income, $10,000. What is the amount of Emmitt's liabilities? A) $55,000. B) $7,000. C) $30,000. D) $13,000.
C
44) Consider the following list of accounts: Cash Retained Earnings Service Revenue Utilities Expense Salaries Expense Accounts Receivable Accounts Payable Common Stock Equipment Dividends How many of these accounts have a normal debit balance? A) Seven. B) Five. C) Six. D) Four.
C
45) Given the information below about Thomas Corporation, what was the amount of dividends the company paid in the current period? Beginning retained earnings $54,000 Ending retained earnings $110,000 Decrease in cash $10,000 Net income $84,000 Change in stockholders' equity $15,000 A) $110,000. B) $13,000. C) $28,000. D) $18,000.
C
53) In Purchase or Manufacture in the operating cycle, what happens to cash? A) Increases B) Stays the Same C) Decreases D) It depends
C
54) Which of the following is not a possible journal entry? A) Credit assets; Debit expenses. B) Debit expenses; Credit liabilities. C) Debit assets; Debit stockholders' equity. D) Credit revenues; Debit assets.
C
58) In a sale on account, who is undertaking a financial risk of non-payment? A) Neither the buyer nor the seller B) Both the buyer and the seller C) The seller D) The buyer
C
6) A company receives a $50,000 cash deposit from a customer on October 15 but will not provide services until November 20. Which of the following statements is true? A) The company records nothing on October 15. B) The company records service revenue on October 15. C) The company records deferred revenue on October 15. D) The company records cash collection on November 20.
C
62) Receiving cash from customers before services are performed results in: A) Service Revenue. B) Accounts Receivable. C) Deferred Revenues. D) Prepaid Assets.
C
63) If a company has stockholders' equity of $60,000 at the end of the year, which of the following statements must be true? A) The company has issued $60,000 of common stock. B) Total revenues during the year equal $60,000. C) The company's assets exceed liabilities by $60,000. D) Net income for the year equals $60,000.
C
67) Stimpleton Company engages in the following cash payments: Purchase equipment $2,000 Pay rent 500 Repay loan to the bank 5,000 Pay worker's salaries 1,000 What is the total amount of cash paid for operating activities? A) $6,000. B) $2,000. C) $1,500. D) $7,000.
C
73) The ending Retained Earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. The company declared a dividend of $1.3 million during the year. What was the net income earned during the year? A) $1.3 million. B) $1.9 million. C) $4.5 million. D) $3.2 million.
C
78) The usual balance in a Contra-Asset account is a: A) DR B) It depends C) CR
C
83) Allocation is primarily as issue in A) Both Measuring Assets and Income B) None of the other three C) Measuring Income D) Measuring Assets
C
91) Usually we measure Inventory at A) Benefit Value B) $0 C) Sacrifice Value
C
96) Income in the operating cycle equals A) It depends on the Measuring system. B) Sacrifice Value Minus Benefit Value C) Benefit Value Minus Sacrifice Value D) Benefit Value Plus Sacrifice Value
C
99) The assumption that a business will continue to operate into the future is the: A) Periodicity assumption. B) Monetary unit assumption. C) Going concern assumption. D) Economic entity assumption.
C
When you see the word corporation, it refers to a _____ (1 letter) Corporation?
C
Which of the following are Cash Outflows from Operating Activities? A) Purchase a Building B) Purchase a Truck C) Purchase Inventory D) Purchase Treasury Stock
C
The largest businesses in the United States are? -Partnership -S Corp -C corp -Sole Proprietorship
C corp
What are the most important Cash Outflows from Financing Activities? A) Issuing Bonds B) Issuing Stocks C) Paying Dividends D) Buying treasury Stock E) Repayment of Bonds
CDE
The usual balance in a Contra-Asset account is a: -CR -DR
CR
The usual balance in a Contra-Dividend account is a: -CR -DR
CR
The usual balance in a Contra-Expense account is a: -DR -CR
CR
Air conditioning cost in a company -are always an Asset -are always an Expense -Can be an Asset or an Expense
Can be an Asset or an Expense
The term when we treat something as an asset is: we (1 word) it
Capitalize
Specific Identification is used by: -Car dealers -Manufacturers -Grocery Stores -Starbucks
Car dealers
After the 3rd step in the Operating Cycle, the firm has?
Cash
The Operating cycle starts with?
Cash
Which is listed third in a Cash Flow Statement? -Cash Flow from Investing Activities -Cash Flow from Operations -Cash Flow from Financing Activities
Cash Flow from Financing Activities
Which is listed second in a Cash Flow Statement? -Cash Flow from Operations -Cash Flow from Investing Activities -Cash Flow from Financing Activities
Cash Flow from Investing Activities
Which is closest to the Income Statement? -Cash Flow from Operations -Cash Flow from Financing Activities -Cash Flow from Investing Activities
Cash Flow from Operations
Which is lasted first in a Cash Flow Statement? -Cash Flow from Operations -Cash Flow from Financing Activities -Cash Flow from Investing Activities
Cash Flow from Operations
Which of the following are made AFTER the financial statements are prepared? -Transaction Entries -Adjusting Entries -Closing Entries
Closing Entries
Over the last 50 years, which company had a higher ROA: -Pepsi -Cola Cola
Cola Cola
The 3rd step in the operating cycle is called?
Collection
In a three line heading, the first line is the: -Time period of the statement -Name of the statement -Company name
Company name
For a given interest rate, which gives more interest? -Compound Interest -Simple Interest
Compound Interest
LCM is based on which accounting principle (1 word)
Conservatism
What is the accounting principle that doesn't allow companies to switch between LIFO and FIFO every year (1 word)
Consistency
Allowance for Bad Debts is what kind of account?
Contra Asset
What kind of account is Treasury Stock?
Contra-equity
Goods Available for Sale minus Ending Inventory Equals (4 words)
Cost of Goods Sold
Finished Goods eventually turn into (4 words)
Cost of Goods Sold Expense
Which preferred stock would you rather own?
Cumulative Preferred Stock
100) A company provides services on account. Indicate how this transaction would affect (1) assets, (2) stockholders' equity, and (3) revenues. A) (1) No effect, (2) Increase (3) Increase B) (1) Increase, (2) No effect (3) Increase C) (1) No effect, (2) No effect (3) No effect D) (1) Increase, (2) Increase (3) Increase
D
15) Pumpkin Inc. sold $500 in pumpkins to a customer on account on January 1. On January 11 Pumpkin collected the cash from that customer. What is the impact on Pumpkin's accounting equation from the collection of cash? A) Increase assets and increase liabilities. B) Decrease assets and decrease liabilities. C) Decrease assets and increase liabilities. D) No net effect to the accounting equation.
D
16) In the Allowance Method when we do the year end adjusting entry for Bad Debts A) Assets stay the same, Net Income stays the same. B) It depends on the balance in the Allowance account before we make the entry. C) Assets increase, Net Income increases. D) Assets decrease, Net Income decreases
D
18) In Cash Flow reporting when the firm acquires inventory A) There is no Loss and no Gain B) It depends on the measuring system C) There is a Gain D) There is a Loss
D
22) After the Second STEP in the Operating Cycle the firm has? A) None of the other three B) Cash C) Inventory D) Account Receivable
D
23) Which of the following is not a major section in the statement of cash flows? A) Cash flows from financing activities. B) Cash flows from investing activities. C) Cash flows from operating activities. D) Cash flows from customers.
D
33) In the Allowance Method when we write off a receivable A) It depends B) Assets increase, Net Income increases. C) Assets decrease, Net Income decreases D) Assets stay the same, Net Income stays the same.
D
49) When a company makes an end-of-period adjusting entry that includes a credit to Prepaid Rent, the debit is usually made to: A) Rent Payable. B) Rent Receivable. C) Cash. D) Rent Expense.
D
51) In Cash Flow reporting at the point of Sale A) There is a Gain B) It depends on the measuring system C) There is a Loss D) There is no Loss and no Gain
D
52) In Cash Flow reporting at the collection of an Account Receivable A) It depends on the measuring system B) There is no Loss and no Gain C) There is a Loss D) There is a Gain
D
56) DW has an ending Retained Earnings balance of $51,100. If during the year DW paid dividends of $4,300 and had net income of $22,500, then what was the beginning Retained Earnings balance? A) $69,300. B) $300. C) $24,300. D) $32,900.
D
61) Which of the following transactions would cause an increase in both the assets and liabilities of a company? A) Pay for inventory purchased 90 days ago. B) Paying for the current month's rent. C) Services received on account. D) Purchase of a building by issuing a note payable.
D
69) For which step in the Operating cycle is there a difference between manufacturers and retailers? A) Fourth B) Third C) Second D) First
D
70) Consider the following account balances of the Shattuck Law Firm at the end of the year: Accounts Payable $4,400 Salaries Expense 12,800 Cash 1,700 Common Stock 2,400 Service Revenue 8,300 Supplies 4,300 Retained Earnings 1,100 Utilities Expense 5,000 How many of these accounts would appear in Shattuck's year-end balance sheet? A) Two. B) Four. C) Three. D) Five.
D
75) Shupe Inc. estimates uncollectible accounts based on the percentage of accounts receivable. What effect will recording the estimate of uncollectible accounts have on the accounting equation? A) Decrease assets and decrease liabilities. B) Increase liabilities and decrease stockholders' equity. C) Increase assets and decrease stockholders' equity. D) Decrease assets and decrease stockholders' equity.
D
8) How many of the following transactions are operating activities? Borrowed $50,000 from the bank Purchased $12,000 in supplies Provide services to customers for $27,000 Paid the utility bill of $750 Purchased a delivery truck for $12,000 Received $25,000 from issuing common stock A) One. B) Two. C) Four. D) Three.
D
81) Which statement below best describes the accounting equation? A) The change in retained earnings equals net income less dividends. B) Financing activities equal investing and operating activities. C) Equality of revenue and expense transactions over time. D) Resources of the company equal creditors' and owners' claims to those resources.
D
87) Which of the following is not possible when recording a transaction? A) Stockholders' equity decreases and assets decrease. B) One asset increases and another asset decreases. C) Stockholders' equity increases and assets increase. D) Liabilities increase and assets decrease.
D
90) Which of the following is recorded upon receipt of a payment on April 7, 2018, by a customer who pays a $900 invoice dated March 3, 2018, with terms 2/10, n/60? A) Credit Purchase Discounts $18. B) Credit Accounts Receivable $882. C) Debit Sales Discounts $18. D) Debit Cash $900.
D
93) Which of the following is NOT possible for a business transaction? A) Increase liabilities and increase expense. B) Decrease assets and increase expense. C) Decrease liabilities and increase revenue. D) Increase assets and decrease revenue.
D
95) The Trueblood Criterion is used by A) Internal Management reports (Managerial Accounting) B) Managers when reporting to the IRS C) Managers when reporting to the public D) Accountants
D
The usual balance in a Contra-Liability account is a: -CR -DR
DR
The usual balance in a Contra-Owners' Equity account is a: -DR -CR
DR
The usual balance in a Contra-Revenue account is a: -DR -CR
DR
Days in Inventory + Days in Receivables - Days in Payables = (4 words)
Days in Operating Cycle
Accounts Receivable are like -Dead Fish that deteriorate with age. -a Fine Wine that improves with age.
Dead Fish that deteriorate with age
Dividends become a legal obligation on which day? -Declaration Date -Payment Date -Record Date
Declaration Date
Common Stock dividends become a legal obligation when they are (1 word)
Declared
Bad News which is the beginning of a Negative Growth phase will do what to the company's P/E ratio? -Decrease -It depends on the risk preference of investors -No change -Increase
Decrease
Bad News which is the beginning of a Negative Growth phase will do what to the company's share price? -No change -It depends on the risk preference of investors -Increase -Decrease
Decrease
Bad News which is the beginning of a Plateau change will do what to the company's share price? -It depends on the risk preference of investors -Decrease -No change -Increase
Decrease
Non recurring Good News will do what to the company's P/E ratio? -Increase -Decrease -It depends on the risk preference of investors -No change
Decrease
In Purchase or Manufacture in the operating cycle, what happens to cash? -Stays the Same -Increases -It depends -Decreases
Decreases
Government pension plans are usually: -Defined Contribution -There is no general rule -Defined Benefit
Defined Benefit
Which pension plan has more complicated Accounting -Defined Benefit Plan -It depends on the details of the plan -Defined Contribution Plan
Defined Benefit Plan
The expense when a natural resource is being used up is called (1 word)
Depletion
When a bond with a face value of $100,000 is sold for $90,000, the bond is being issued at a (1 word)
Discount
What is the main disadvantage of a regular corporation (2 words)?
Double Taxation
What do we end with in a bathtub (2 words)?
Ending Balance
Payments on an installment loan: -Every payment is partially principal and partially interest -Every payment is 100% principal -Every payment is 100% interest -Some payments are principal and some are interest
Every payment is partially principal and partially interest
How often can you calculate EPS? -Every time the company issues a financial report. -Every time the stock price changes.
Every time the company issues a financial report
How often can you calculate the P/E ratio? -Every time the stock price changes. -Every time the company issues a financial report.
Every time the stock price changes
What is expensed in Sales Office -Product Costs -Nothing -Period Costs -Everything
Everything
When Prices are Rising, which will generally lead to Higher Net Income? -FIFO -LIFO
FIFO
When Prices are Rising, which will generally lead to Higher Tax Payments? -FIFO -LIFO
FIFO
A company can use LIFO for taxes and FIFO for Financial reporting -True -False
False
A contingent gain can sometimes be disclosed in a footnote -True -False
False
Companies are legally obligated to pay preferred dividends. -True -False
False
Current Liabilities are only amounts we owe to suppliers (of merchandise or services) bought on credit -True -False
False
For a journal entry with only two lines, the following entry is valid: Decrease in Expense, Decrease in Dividends. True False
False
For a journal entry with only two lines, the following entry is valid: Decrease in Liability, Decrease in Owners' Equity.
False
For a journal entry with only two lines, the following entry is valid: Decrease in Liability, Decrease in Revenue.
False
For a journal entry with only two lines, the following entry is valid: Decrease in Liability, Increase in Dividends.
False
For a journal entry with only two lines, the following entry is valid: Decrease in Liability, Increase in Expense.
False
For a journal entry with only two lines, the following entry is valid: Decrease in Owners' Equity, Decrease in Revenue.
False
For a journal entry with only two lines, the following entry is valid: Decrease in Owners' Equity, Increase in Dividends.
False
For a journal entry with only two lines, the following entry is valid: Decrease in Owners' Equity, Increase in Expense. True False
False
For a journal entry with only two lines, the following entry is valid: Decrease in Revenue, Increase in Dividends. True False
False
For a journal entry with only two lines, the following entry is valid: Decrease in Revenue, Increase in Expense.
False
For a journal entry with only two lines, the following entry is valid: Decrease in an Asset, Decrease in Dividends.
False
For a journal entry with only two lines, the following entry is valid: Decrease in an Asset, Decrease in Expense.
False
For a journal entry with only two lines, the following entry is valid: Decrease in an Asset, Increase in Owners' Equity.
False
For a journal entry with only two lines, the following entry is valid: Decrease in an Asset, Increase in Revenue.
False
For a journal entry with only two lines, the following entry is valid: Decrease in an Asset, Increase in a Liability. True False
False
For a journal entry with only two lines, the following entry is valid: Decrease in one Expense, Decrease in another Expense.
False
For a journal entry with only two lines, the following entry is valid: Decrease in one Liability, Decrease in a second Liability.
False
For a journal entry with only two lines, the following entry is valid: Decrease in one Owners' Equity, Decrease in a second Owners' Equity.
False
For a journal entry with only two lines, the following entry is valid: Decrease in one Revenue, Decrease in another Revenue. True False
False
For a journal entry with only two lines, the following entry is valid: Decrease in one asset, Decrease in a second asset.
False
For a journal entry with only two lines, the following entry is valid: Increase in Expense, Increase in Dividends. True False
False
For a journal entry with only two lines, the following entry is valid: Increase in Liability, Decrease in Dividends. True False
False
For a journal entry with only two lines, the following entry is valid: Increase in Liability, Decrease in Expense. True False
False
For a journal entry with only two lines, the following entry is valid: Increase in Liability, Increase in Owners' Equity.
False
For a journal entry with only two lines, the following entry is valid: Increase in Liability, Increase in Revenue. True False
False
For a journal entry with only two lines, the following entry is valid: Increase in Owners' Equity, Decrease in Dividends.
False
For a journal entry with only two lines, the following entry is valid: Increase in Owners' Equity, Decrease in Expense. True False
False
For a journal entry with only two lines, the following entry is valid: Increase in Owners' Equity, Increase in Revenue.
False
For a journal entry with only two lines, the following entry is valid: Increase in Revenue, Decrease in Dividends. True False
False
For a journal entry with only two lines, the following entry is valid: Increase in Revenue, Decrease in Expense. True False
False
For a journal entry with only two lines, the following entry is valid: Increase in an Asset, Decrease in Owners' Equity.
False
For a journal entry with only two lines, the following entry is valid: Increase in an Asset, Decrease in Revenue. True False
False
For a journal entry with only two lines, the following entry is valid: Increase in an Asset, Decrease in a Liability. True False
False
For a journal entry with only two lines, the following entry is valid: Increase in an Asset, Increase in Dividends.
False
For a journal entry with only two lines, the following entry is valid: Increase in an Asset, Increase in Expense. True False
False
For a journal entry with only two lines, the following entry is valid: Increase in one Expense, Increase in another Expense.
False
For a journal entry with only two lines, the following entry is valid: Increase in one Liability, Increase in a second Liability. True False
False
For a journal entry with only two lines, the following entry is valid: Increase in one Owners' Equity, Increase in a second Owners' Equity.
False
For a journal entry with only two lines, the following entry is valid: Increase in one Revenue, Increase in another Revenue. True False
False
For a journal entry with only two lines, the following entry is valid: Increase in one asset, Increase in a second asset. True False
False
In a Balanced set of Accounting Records, EVERY Account must balance. -True -False
False
In an Operating Lease the Lessee records an Asset and a Liability -True -False
False
In financial statement analysis, a single number can be very important -True -False
False
Someone who sells gasoline must report their inventory using Weighted Average True False
False
The Income Statement always balances. -True -False
False
The Indians would need to earn about 10% compounded to have made a good deal on the sale of Manhattan -True -False
False
The Statement of Cash Flows always balances. -True -False
False
When a business pays dividends to its shareholders, the dividends are tax deductible: True False
False
Which is usually the first step in a new business? -Investing -Operations -Financing
Financing
Freight on FOB Shipping point is called -Freight In -Freight Out
Freight In
Freight on FOB Destination is called -Freight In -Freight Out
Freight Out
Opening Inventory Plus Purchases Equals (4 words)
Goods Available for Sale
Aggressive Accounting practices produce a -Lower Net Income than Conservative Accounting -Higher Net Income than Conservative Accounting -Same Net Income as Conservative Accounting
Higher Net Income than Conservative Accounting
The Excel function which calculates the rate of return which makes a series of cash flows equals zero is called
IRR
When goodwill dies, this is called (1 word)
Impairment
Generally if a firm becomes less risky, its P/E ratio will -Increase -Decrease
Increase
Generally if a firm becomes less risky, its share price will -Decrease -Increase
Increase
Generally if a firm becomes more of a growth company, its P/E ratio will -Decrease -Increase
Increase
Generally if a firm becomes more of a growth company, its share price will -Increase -Decrease
Increase
Good News which is the beginning of a Growth phase will do what to the company's P/E ratio? -It depends on the risk preference of investors -No change -Decrease -Increase
Increase
Good News which is the beginning of a Growth phase will do what to the company's share price? -No change -It depends on the risk preference of investors -Decrease -Increase
Increase
Good News which is the beginning of a Plateau change will do what to the company's share price? -Decrease -It depends on the risk preference of investors -Increase -No change
Increase
Non recurring Bad News will do what to the company's P/E ratio? -Decrease -It depends on the risk preference of investors -Increase -No change
Increase
The Change in the Bathtub equals (3 words)
Increase Minus Decrease
During Collection in the operating cycle, what happens to cash? -It depends -Decreases -Stays the Same -Increases
Increases
Managerial Accounting is done for whom -Actual Investors -Potential Investors -Actual Creditors -Potential Creditors -the IRS -Internal Managers
Internal Managers
After the first STEP in the Operating Cycle, the company has?
Inventory
Which is often the second step in a new business? -Operations -Financing -Investing
Investing
When I raise money for my business, I will be better off -if I issue shares -It depends how well the business does -if I issue debt
It depends how well the business does
Which is true about the Cash Flow Statement? -It only shows items that are cash flows to the firm. -It shows all significant changes to the company, including noncash items
It shows all significant changes to the company, including noncash items
Owners' Equity is -Just a number, not a thing -A thing
Just a number, not a thing
When Prices are Falling, which will generally lead to Higher Net Income? -FIFO -LIFO
LIFO
When Prices are Falling, which will generally lead to Higher Tax Payments? -LIFO -FIFO
LIFO
If the benefit value of inventory changes, but the sacrifice value of the inventory remains constant -LIFO net income will be less than FIFO net income -LIFO net income will be greater than FIFO net income -LIFO net income will be identical to FIFO net income
LIFO net income will be identical to FIFO net income
Unearned Revenue is what kind of account -Liability -Asset -Revenue -Expense
Liability
Unearned Revenue is what kind of account? -Expense -Dividends -Liability -Asset -Revenue
Liability
What is the most important advantage of a corporation (2 words)?
Limited Liability
The Average Days in Operating Cycle is a -Liquidity Ratio -Profitability Ratio -Stock Market Ratio -Solvency Ratio
Liquidity Ratio
The Current Ratio is a -Liquidity Ratio -Stock Market Ratio -Profitability Ratio -Solvency Ratio
Liquidity Ratio
The Quick Ratio is a -Stock Market Ratio -Profitability Ratio -Solvency Ratio -Liquidity Ratio
Liquidity Ratio
In Cash Flow Reporting what is the income at the -acquisition of Inventory -$8 -$3 -$0 -It depends on the measuring system -Loss of $5
Loss of $5
LCM stands for (5 words)
Lower of Cost or Market
A company has 12,247 customers they extend credit to, they will have 1 ______________ A/R account.
Master
Which types of companies pay cash dividends? -Mature companies. -Growth companies.
Mature companies
Financial Accounting in 3 words (second word is and)
Measure and Communicate
Duality of Asset Valuation is primarily as issue in -Measuring Income -Measuring Assets
Measuring Assets
Allocation is primarily as issue in -Measuring Assets -Measuring Income
Measuring Income
In a three line heading, the second line is the: -Time period of the statement -Company name -Name of the statement
Name of the statement
Land is depreciated -over its useful life -over 40 years -Never
Never
Can APIC have a Debit balance? (Yes/No)
No
Does a Subchapter S pay taxes? -Yes -No
No
Bad News which is the beginning of a Plateau change will do what to the company's P/E ratio? -No change -Increase -Decrease -It depends on the risk preference of investors
No change
Good News which is the beginning of a Plateau change will do what to the company's P/E ratio? -No change -Increase -Decrease -It depends on the risk preference of investors
No change
Non recurring Bad News will do what to the company's share price? -Increase -It depends on the risk preference of investors -No change -Decrease
No change
Non recurring Good News will do what to the company's share price? -It depends on the risk preference of investors -No change -Increase -Decrease
No change
When we get a line of credit from the bank -Assets increase -Expenses Increase -Liabilities Increase -No change to the Balance Sheet and no change to the Income Statement
No change to the Balance Sheet and no change to the Income Statement
The abbreviation of the rules an accountant has to follow when doing financial statement analysis is: -IFRS -None of these -GAAP -FASB
None of these
What is expensed in a factory? -Everything -Period Costs -Product Costs -Nothing
Nothing
What do we start with in a bathtub (2 words)?
Opening Balance
Which is often the third step in a new business? -Operations -Investing -Financing
Operations
Name the 3 Cash Flows on the Cash Flow Statement (no credit, but very important)
Operations, Financing, Investing
What does OPM stand for (3 words)
Other People's Money
What in the P/E ratio deals with reality? -Not P not E -Both P and E -E -P
P
In the P/E ratio -P is backward looking; E is forward looking. -P is forward looking; E is backward looking. -P is forward looking; E is forward looking. -P is backward looking; E is backward looking.
P is forward looking; E is backward looking
When company A acquires company B, company A is called the (1 word)
Parent
What is usually a better predictor of future cash flow to the firm? -Past Income -Past Cash Flows
Past Income
Choose one: -There is no difference between the expense of using Periodic Inventory Accounting versus Perpetual Inventory Accounting -Periodic Inventory Accounting is less expensive to maintain than Perpetual Inventory Accounting -Periodic Inventory Accounting is more expensive to maintain than Perpetual Inventory Accounting
Periodic Inventory Accounting is more expensive to maintain than Perpetual Inventory Accounting
Periodic vs.Perpetual Inventory Accounting -Sometimes Periodic Inventory Accounting results in a lower Cost of Goods Sold than Perpetual Inventory Accounting and sometimes Periodic Inventory Accounting results in a higher Cost of Goods Sold than Perpetual Inventory Accounting -Periodic and Perpetual Inventory Accounting result in the same Cost of Goods Sold -Periodic Inventory Accounting results in a higher Cost of Goods Sold than Perpetual Inventory Accounting -Periodic Inventory Accounting results in a lower Cost of Goods Sold than Perpetual Inventory Accounting
Periodic and Perpetual Inventory Accounting result in the same Cost of Goods Sold
Usually we pick up Income at: -at Collection -Point of Sale -at purchase of inventory
Point of Sale
In the allowance method Accountants have to do what to Report the Past (3 words)?
Predict the Future
When a bond with a face value of $100,000 is sold for $115,000, the bond is being issued at a (1 word)
Premium
ROE is a -Liquidity Ratio -Stock Market Ratio -Solvency Ratio -Profitability Ratio
Profitability Ratio
ROI is a -Stock Market Ratio -Profitability Ratio -Liquidity Ratio -Solvency Ratio
Profitability Ratio
The Asset turnover Ratio is a -Liquidity Ratio -Solvency Ratio -Stock Market Ratio -Profitability Ratio
Profitability Ratio
The Gross Profit Ratio is a -Solvency Ratio -Stock Market Ratio -Profitability Ratio -Liquidity Ratio
Profitability Ratio
The Net Margin Ratio is a -Stock Market Ratio -Liquidity Ratio -Profitability Ratio -Solvency Ratio
Profitability Ratio
Which ratio is strongly influenced by the long term Debt of a company -ROI -neither ROE nor ROI -ROE -both ROE and ROI
ROE
The market will generally react to dividends on which day? -Payment Date -Record Date -Declaration Date
Record Date
Define ROE (3 words)
Return on Equity
Define ROI (3 words)
Return on Investment
Unearned Revenue usually turns into: -Liability -Asset -Revenue -Expense
Revenue
Usually we measure Inventory at -Sacrifice Value -$0 -Benefit Value
Sacrifice Value
The second step in the Operating Cycle is called?
Sale
For most businesses what is the critical event? -Sale of Inventory -Collecting Cash for Receivables -Acquiring (manufacture or purchase) Inventory
Sale of Inventory
Common size Income statements are a way of understanding what happens to $1 of (1 word)
Sales
To create Common size Income statements, divide every line by (1 word)
Sales
When we collect Sales Tax, we Credit which account (3 words)
Sales Tax Payable
When we pay Sales Tax, we Debit which account (3 words)
Sales Tax Payable
Aggressive Accounting practices produce a -Lower Cash Flow from Operations as Conservative Accounting -Higher Cash Flow from Operations as Conservative Accounting -Same Cash Flow from Operations as Conservative Accounting
Same Cash Flow from Operations as Conservative Accounting
A creditor who has collateral is called a _____________ (1 word) creditor
Secured
Freight on FOB Destination is paid by the -Seller -Buyer
Seller
A bond in which the payment of principal is done continuously through the life of the bond is called a (2 words)
Serial Bond
The Balance Sheet is a: -Snapshot -Video
Snapshot
The most common form of business structure in the United States is? -C corp -Partnership -S Corp -Sole Proprietorship
Sole Proprietorship
The Debt to Equity Ratio is a measure of : -Solvency -Liquidity
Solvency
The Debt to Equity Ratio is a -Liquidity Ratio -Profitability Ratio -Solvency Ratio -Stock Market Ratio
Solvency Ratio
The Debt to asset Ratio is a -Stock Market Ratio -Liquidity Ratio -Profitability Ratio -Solvency Ratio
Solvency Ratio
The Times Interest Earned is a -Solvency Ratio -Profitability Ratio -Stock Market Ratio -Liquidity Ratio
Solvency Ratio
When Managers report they: -Always try to look good -Sometimes like to look good, and sometimes like to look bad -Always try to look bad
Sometimes like to look good, and sometimes like to look bad
During a Sale in the operating cycle, what happens to cash? -Stays the Same -It Depends -Increases -Decreases
Stays the same
EPS is a -Solvency Ratio -Profitability Ratio -Liquidity Ratio -Stock Market Ratio
Stock Market Ratio
The P/E ratio is a -Profitability Ratio -Liquidity Ratio -Stock Market Ratio -Solvency Ratio
Stock Market Ratio
A company has 12,247 customers they extend credit to, they will have 12,247 __________________ accounts.
Subsidiary
When company A acquires company B, company B is called the (1 word)
Subsidiary
In a sale on account, who is undertaking a financial risk of non-payment? -neither the buyer nor the seller -both the buyer and the seller -the buyer -it depends -the seller
The seller
LAST year a company made an error in its ending inventory. For THIS year: -This year's Balance Sheet will be wrong but the Income Statement will be correct -This year's Balance Sheet will be correct but the Income Statement will be wrong -Both this year's Balance Sheet and Income Statement will be wrong -Neither this year's Balance Sheet nor Income Statement will be wrong
This year's Balance Sheet will be correct but the Income Statement will be wrong
In a three line heading, the third line is the: -Company name -Name of the statement -Time period of the statement
Time period of the statement
To create Common size Balance Sheets, divide every line by (2 words)
Total Assets
Which of the following are made BEFORE a trial balance is prepared? -Transaction Entries -Adjusting Entries -Closing Entries
Transaction Entries
Which of the following are made when the business does something?
Transaction Entries
When a company buys back its own shares, the shares are called (2 words)?
Treasury Stock
A company can use FIFO for taxes and LIFO for Financial reporting -True -False
True
A contingent liability be disclosed in a footnote -True -False
True
A contingent liability can sometimes be ignored -True -False
True
For a journal entry with only two lines, the following entry is valid: Decrease in Expense, Increase in Dividends. True False
True
For a journal entry with only two lines, the following entry is valid: Decrease in Liability, Decrease in Dividends.
True
For a journal entry with only two lines, the following entry is valid: Decrease in Liability, Decrease in Expense. True False
True
For a journal entry with only two lines, the following entry is valid: Decrease in Liability, Increase in Owners' Equity.
True
For a journal entry with only two lines, the following entry is valid: Decrease in Owners' Equity, Decrease in Dividends. True False
True
For a journal entry with only two lines, the following entry is valid: Decrease in Owners' Equity, Decrease in Expense.
True
For a journal entry with only two lines, the following entry is valid: Decrease in Owners' Equity, Increase in Revenue. True False
True
For a journal entry with only two lines, the following entry is valid: Decrease in Revenue, Decrease in Dividends.
True
For a journal entry with only two lines, the following entry is valid: Decrease in Revenue, Decrease in Expense.
True
For a journal entry with only two lines, the following entry is valid: Decrease in Revenue, Decrease in Expense. True False
True
For a journal entry with only two lines, the following entry is valid: Decrease in an Asset, Decrease in Owners' Equity.
True
For a journal entry with only two lines, the following entry is valid: Decrease in an Asset, Decrease in Revenue. True False
True
For a journal entry with only two lines, the following entry is valid: Decrease in an Asset, Decrease in a Liability. True False
True
For a journal entry with only two lines, the following entry is valid: Decrease in an Asset, Increase in Dividends. True False
True
For a journal entry with only two lines, the following entry is valid: Decrease in an Asset, Increase in Expense. True False
True
For a journal entry with only two lines, the following entry is valid: Increase in Expense, Decrease in Dividends. True False
True
For a journal entry with only two lines, the following entry is valid: Increase in Liability, Decrease in Owners' Equity.
True
For a journal entry with only two lines, the following entry is valid: Increase in Liability, Decrease in Revenue.
True
For a journal entry with only two lines, the following entry is valid: Increase in Liability, Increase in Dividends. True False
True
For a journal entry with only two lines, the following entry is valid: Increase in Liability, Increase in Expense. True False
True
For a journal entry with only two lines, the following entry is valid: Increase in Owners' Equity, Decrease in Revenue. True False
True
For a journal entry with only two lines, the following entry is valid: Increase in Owners' Equity, Increase in Dividends. True False
True
For a journal entry with only two lines, the following entry is valid: Increase in Owners' Equity, Increase in Expense.
True
For a journal entry with only two lines, the following entry is valid: Increase in Revenue, Increase in Dividends. True False
True
For a journal entry with only two lines, the following entry is valid: Increase in Revenue, Increase in Expense.
True
For a journal entry with only two lines, the following entry is valid: Increase in an Asset, Decrease in Dividends.
True
For a journal entry with only two lines, the following entry is valid: Increase in an Asset, Decrease in Expense.
True
For a journal entry with only two lines, the following entry is valid: Increase in an Asset, Increase in Owners' Equity.
True
For a journal entry with only two lines, the following entry is valid: Increase in an Asset, Increase in Revenue. True False
True
For a journal entry with only two lines, the following entry is valid: Increase in an Asset, Increase in a Liability.
True
For a journal entry with only two lines, the following entry is valid: Increase in one Expense, Decrease in another Expense.
True
For a journal entry with only two lines, the following entry is valid: Increase in one Liability, Decrease in a second Liability.
True
For a journal entry with only two lines, the following entry is valid: Increase in one Owners' Equity, Decrease in a second Owners' Equity.
True
For a journal entry with only two lines, the following entry is valid: Increase in one Revenue, Decrease in another Revenue. True False
True
For a journal entry with only two lines, the following entry is valid: Increase in one asset, Decrease in a second asset. True False
True
For financial reporting a company can have some inventory on FIFO and some on LIFO True False
True
Historical cost numbers are usually harder than market value numbers -True -False
True
In a Balanced set of Accounting Records, EVERY Transaction must balance. -True -False
True
In a Financing Lease the Lessee records an Asset and a Liability -True -False
True
Someone who sells coal can report their inventory using FIFO True False
True
Someone who sells milk can report their inventory using LIFO -True -False
True
The Balance Sheet always balances. -True -False
True
When a business pays interest to its bondholders, some (or all) the interest is tax deductible True False
True
In doing an allocation for a basket purchase: -Use the total cost and the total market value -Use the individual costs and the total market value -Use the total cost and the individual market values -Use the individual costs and the individual market values
Use the total cost and the individual market values
Common size statements are an example of -Both vertical analysis and horizontal analysis -Horizontal Analysis -Vertical Analysis -Neither vertical analysis nor horizontal analysis
Vertical Analysis
The Income Statement is a: -Video -Snapshot
Video
The Statement of Cash Flows is a: -Snapshot -Video
Video
Can a company that had a loss this year declare a dividend? -Yes -No
Yes
Can a contingent Liability require a journal entry? Yes No
Yes
Par value of shares is -an important number for both common and preferred shares -a garbage number for common stock but an important number for preferred shares -a garbage number for both common and preferred shares -an important number for common stock but a garbage number for preferred shares
a garbage number for common stock but an important number for preferred shares
hen a company spends money to fix an appliance under warranty, they Credit Cash and Debit: -a liability -an income account -an expense -an asset
a liability
The year end adjusting entry for warranties credits -an asset account -an income account -an expense account -a liability account
a liability account
On the cost of Goods Sold Statement -all numbers are Sacrifice numbers -Some numbers are Sacrifice and some are Benefit -all numbers are Benefit numbers
all numbers are Sacrifice numbers
When you see an interest rate, it is: -always a weekly rate -always a daily rate -always a monthly rate -always an annual rate
always an annual rate
When applying LCM, the Net Income of a firm -always goes down -always goes up -sometimes goes up and sometimes goes down -doesn't change, since LCM only changes Cost of Goods Sold
always goes down
When prices are rising, a LIFO liquidation will -always increase income -always decrease income -sometimes increase income and sometimes decrease income
always increase income
The year end adjusting entry for warranties debits: -an income account -an expense account -an asset account -a liability account
an expense account
The Direct Method and Indirect Method of Reporting Cash Flows -apply only to Cash from Operations -can apply to all parts of the cash flow statement
apply only to Cash from Operations
Periodic Inventory Accounting and Perpetual Inventory Accounting -are two different bookkeeping systems -are two different fairy tales
are two different bookkeeping systems
A bond which the company may repay whenever they want is a called a (2 words)
callable bond
A bond which allows the bondholder to trade in his/her bond for stock is called a (2 words)
convertible bond
The two groups who have claims on the Assets in a business are (3 words, second word is and)
creditors and owners
The current portion of long term debt is a (2 words)
current liability
The par value of preferred stock is used in calculating preferred ________________ (1 word)?
dividends
One of the conditions of an asset is that it must have ___________ _______________
future value
Define GAAP (4 words)
generally accepted accounting principles
A physical inventory count is necessary to calculate Cost of Goods Sold -in neither Periodic Inventory Accounting nor Perpetual Inventory Accounting -in Periodic Inventory Accounting but not in Perpetual Inventory Accounting -in both Periodic Inventory Accounting and in Perpetual Inventory Accounting -in Perpetual Inventory Accounting but not in Periodic Inventory Accounting
in Periodic Inventory Accounting but not in Perpetual Inventory Accounting
It is possible to calculate shrinkage: -in neither Periodic Inventory Accounting nor Perpetual Inventory Accounting -in Perpetual Inventory Accounting but not in Periodic Inventory Accounting -in both Periodic Inventory Accounting and in Perpetual Inventory Accounting -in Periodic Inventory Accounting but not in Perpetual Inventory Accounting
in Perpetual Inventory Accounting but not in Periodic Inventory Accounting
Calculating the Allowance for Bad Debts at the end of the year -is an APPROXIMATE procedure. -is an exact mathematical procedure.
is an APPROXIMATE procedure
Freight on FOB Shipping point -is an asset -is an expense
is an asset
Freight on FOB Destination -is an expense -is an asset
is an expense
What collateral is the safest because it can't disappear (1 word)?
land
In an installment loan: -later payments pay less interest than earlier payments -later payments pay more interest than earlier payments -it depends on the interest rate -later payments pay the same interest as earlier payments
later payments pay less interest than earlier payments
In an installment loan: -later payments pay more principal than earlier payments -it depends on the interest rate -later payments pay less principal than earlier payments -later payments pay the same principal as earlier payments
later payments pay more principal than earlier payments
Window Dressing is: -legal -illegal
legal
One of the three condition of an asset is that an accountant can _____________ the asset.
measure
If I multiply one side of an equality by ten, to maintain the equality, what do I have to do to the other side (3 words)?
multiply by ten
In the USA Goodwill on a financial statement -must be internally developed, not bought -must be bought, not internally developed -can be bought or internally developed
must be bought, not internally developed
The definition of a liability is: something we ___________
owe
One of the three conditions for an asset is that the business __________ the asset
owns
Liquidity is the ability to (3 words)
pay current debt
Solvency is the ability to (4 words)
pay long term debt
When writing a journal entry, it is traditional to -There is no particular order -put the Credits on top. -put the Debits on top.
put the Debits on top
Managers generally prefer: -recording an Operating Lease rather than a Financing (or Capital) Lease. -recording a Financing (or Capital) Lease rather than an Operating Lease.
recording an Operating Lease rather than a Financing (or Capital) Lease
If a bond limits the ability of the business to issue dividends, this is called a (2 words)
restrictive covenant
Interest is usually paid on a bond how often (1 word)
semiannually
If everything is in balance -all account balances must be correct -some account balances may be wrong
some account balances may be wrong
Freight is: -always an expense -sometimes an asset, sometimes an expense -neither an asset nor an expense -always an asset
sometimes an asset, sometimes an expense
At year end, by paying off debt or purchasing inventory on account a manager can manipulate -the Current Ratio -Working Capital
the Current Ratio
Which is always the larger ratio -the Current ratio -the Acid Test Ratio
the Current ratio
Tax Accounting is done for whom -Actual Investors -Potential Investors -Actual Creditors -Potential Creditors -the IRS -Internal Managers
the IRS
Which method of reporting Operating Cash Flows is more closely tied to the Income Statement? -the Indirect Method -the Direct Method
the Indirect Method
Which method of reporting Operating Cash Flows is more misleading? -they are about equally misleading -the Direct Method -the Indirect Method
the Indirect Method
Which method of reporting Operating Cash Flows is used more often by companies? -the Indirect Method -they are used about equally -the Direct Method
the Indirect Method
In a defined Contribution Plan who has the investment risk? -the employer -the employee
the employee
In a Defined Benefit Plan who has the investment risk? -the employer -the employee
the employer
When a firm gets less risky what will happen to its bonds: -the market interest rate of the bonds will go up and the price of the bonds will go up -the market interest rate of the bonds will go up and the price of the bonds will go down -the market interest rate of the bonds will go down and the price of the bonds will go down -the market interest rate of the bonds will go down and the price of the bonds will go up -there is no definite answer
the market interest rate of the bonds will go down and the price of the bonds will go up
When a firm gets riskier what will happen to its bonds: -the market interest rate of the bonds will go down and the price of the bonds will go down -the market interest rate of the bonds will go down and the price of the bonds will go up -the market interest rate of the bonds will go up and the price of the bonds will go down -there is no definite answer -the market interest rate of the bonds will go up and the price of the bonds will go up
the market interest rate of the bonds will go up and the price of the bonds will go down
The difference between a Defined Contribution Plan and a Defined Benefit Plan -the plans are totally different -the plans are the same, but the accounting story is different
the plans are totally different
When a firm gets riskier what will happen to its bonds: -the stated interest rate of the bonds will not change -the stated interest rate of the bonds will go up -there is no definite answer -the stated interest rate of the bonds will go down
the stated interest rate of the bonds will not change
Where do we put gains/losses on purchase of Treasury Stock (cost method)? -adjustments to total Equity -Additional Paid in Capital / Retained Earnings -there is no gain or loss on purchase of Treasury Stock -Income Statement
there is no gain or loss on purchase of Treasury Stock
Which method of reporting Operating Cash Flows generally gives a higher Cash Flow? -the Indirect Method -the Direct Method -they give the same cash flow
they give the same cash flow
Horizontal analysis looks at the way accounts change over (1 time)
time
Managers use controlled liquidations -to decrease their tax bill when they are are measuring inventory using LIFO. -to increase income when they are are measuring inventory using FIFO. -to decrease their tax bill when they are are measuring inventory using FIFO. -to increase income when they are are measuring inventory using LIFO.
to increase income when they are are measuring inventory using LIFO.
It is easier for a company to cheat on its taxes: -same for periodic inventory accounting and perpetual inventory accounting -under periodic inventory accounting than under perpetual inventory accounting -under perpetual inventory accounting than under periodic inventory accounting
under periodic inventory accounting than under perpetual inventory accounting
If someone subscribes to a magazine, on the company books, which liability account goes up?
unearned revenue
Collateral is useful: -when there are multiple creditors -when there is one creditor -when there is one creditor or multiple creditors
when there are multiple creditors
The Going Concern Assumption means we assume that a company: -will pay all its liabilities -will collect all its receivables
will pay all its liabilities
Current Assets are Assets that will be gone by the end of the ____________
year
