Accounting final exam
internal controls for cash receipts over the counter and for cash receipts by mail are identical.
false
Which inventory costing method provides the most current, upminus−tominus−date cost of inventory on the balance sheet?
fifo
Accounting:
measures business activities. B. processes data into reports and communicates the data to decision makers. C. is often called the language of business.
A company reports the following balances: 12/31/2017 12/31/2018 Common Stock $15,000 $158,000 Paidminus−in Capital in Excess of Par 96,000 106,000 Retained Earnings 68,000 77,000 Treasury Stock 12,000 16,000 During 2018, net income of $32,000 was reported. No treasury stock was sold during 2018. No common stock was retired during 2018. What financing activities are reported on the statement of cash flows prepared with the indirect method for the year ending December 31, 2018?
purchase of treasury stock $4,000, Payment of dividends $23,000 and Sale of common stock $153,000
Which of the following transactions would be recorded under accrual accounting but NOT under cashminus−basis accounting?
purchasing of inventory on account
On a statement of cash flows prepared with the indirect method, investing activities do NOT include:
receipt of interest on investments.
Corporations may choose to distribute stock dividends in order to:
reduce the perminus−share market price of its stock. C. continue dividends but conserve cash.
Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.
False
WorldCom committed financial statement fraud by deliberately overstating expenses.
False
he adjusted trial balance lists only the balance sheet accounts and their final balances in a single place.
False
When a company discontinues a segment of its business, the income statement should report income (loss) from continuing operations and income (loss) from discontinued operations.
True
f a company has sales of $250 in 2017 and $225 in 2018, the percentage decrease from 2017 to 2018 is 10%.
True
Two accounts that appear on the financial statements of a merchandising company but are not needed by a service company are:
cost of goods sold and inventory.
For discount retailers such as Walmart, inventory turnover equals:
cost of goods sold divided by average inventory.
To document approval of purchase returns, management issues a credit memorandum meaning that accounts payable are reduced for the amount of the return.
false
The business records of a sole proprietorship should include the proprietor's personal finances.
false
Lloyd's Boat Shop, Inc. reports net income of $63,000, income before taxes of $60,000 and interest expense of $17,000. The weightedminus−average number of shares of common stock outstanding during 2017 was 40,000 shares. The gross profit was $130,000. What is the earnings per share? (Round your final answer to the nearest cent.)
$1.58
Equipment with a book value of $ 11 comma 000$11,000 is sold for $ 4 comma 000$4,000 cash. The statement of cash flows will report a:
$4,000 cash inflow in the investing activities section.
Roho Company acquired equipment on July 1, 2016, for $ 400 comma 000$400,000. The residual value is $ 40 comma 000$40,000 and the estimated life is 5 years or 40,000 hours. Compute the depreciation expense for the years ending December 31, 2016 and December 31, 2017 if Roho Company uses the double-declining-balance method of depreciation
$80,000 for 2016; $128,000 for 2017.
Which of the following is not an issue in keeping track of perpetual inventories under LIFO and weightedminus−averageminus−cost methods? A. Many companies keep track of perpetual inventories in quantities only during the year, making yearminus−end adjusting entries to apply either LIFO or weightedminus−averageminus−cost to both ending inventory and cost of goods sold. B. The LIFO costminus−flow assumption does not follow the logical flow of goods. C. When costs are changing, it is physically impossible to apply LIFO unit costs to units purchased and sold, as the transactions are happening, using a perpetual inventory accounting system. D. All of the above statements are issues in keeping track of perpetual inventories under LIFO and weightedminus−averageminus−cost methods.
. All of the above statements are issues in keeping track of perpetual inventories under LIFO and weightedminus−averageminus−cost methods.
In 2017, Chen Corporation purchased treasury stock with a cost of $ 53 comma 000$53,000. During the year, the company declared and paid dividends of $ 9 comma 000$9,000 and issued bonds payable for $ 1 comma 100 comma 000$1,100,000. Net cash provided by financing activities for 2017 is:
1,038,000
Dooley Company had current assets of $1,572, current liabilities of $1,473, total assets of $1,752, and long-term liabilities of $1,220. If Dooley acquires inventory by executing a six-month note for $1,470, what is the new current ratio? (Round your final answer to two decimal places.)
1.03
Anew Health Care Company reports net income of $ 210 comma 000$210,000 and Depreciation Expense of $ 18 comma 000$18,000 for the year ending December 31, 2017. No long-term assets were sold or exchanged during 2017. They also have the following data available: December 31, 2017 December 31, 2016 Current Assets: Cash $ 33 comma 000$33,000 $ 75 comma 000$75,000 Accounts Receivable $ 157 comma 000$157,000 97 comma 00097,000 Inventory $ 96 comma 000$96,000 72 comma 00072,000 Total Current Assets $ 286 comma 000$286,000 $ 244 comma 000$244,000 Current Liabilities: Accounts Payable $ 47 comma 000$47,000 $ 41 comma 000$41,000 Salaries Payable 41 comma 00041,000 89 comma 00089,000 Total Current Liabilities $ 88 comma 000$88,000 $ 130 comma 000$130,000 Using the indirect method, what is the net cash provided (or used) from operating activities for the year ending December 31, 2017?
102,000
Tom's Roadside Burger Stand has a beginning balance in the Accumulated Depreciationlong dash—Equipment account of $ 300 comma 000$300,000. The depreciation expense on the equipment for the year was $ 40 comma 000$40,000. At the end of the year, the balance in the Accumulated Depreciationlong dash—Equipment account was $ 150 comma 000$150,000. What was the accumulated depreciation on the equipment sold during the year?
110,000
The Allowance to Adjust Investment in Availableminus−forminus−Sale Securities to Market account has a current credit balance of $1200 after the adjustment at yearminus−end. Availableminus−forminus−sale investments have a fair value of $21,000. The original cost of the investments was $22,200. The carrying value of the investments is:
21,000
The balance in Accounts Receivable was $ 680 comma 000$680,000 at the beginning of the year and $ 800 comma 000$800,000 at the end of the year. Credit sales for the year totaled $ 4 comma 120 comma 000$4,120,000. During the year, $ 400 comma 000$400,000 in customer accounts were written off. How much cash was collected from customers during the period?
3,600,000
A company reports Cost of Goods Sold of $360,000, Ending Inventory of $30,000, Beginning Inventory of $28,000, Ending Accounts Payable of $29,000 and Beginning Accounts Payable of $37,000. What is the days' payable outstanding? (Round any intermediary calculations to two decimal places and your final answer to the nearest day.)
33 days
Independent Support, Inc. issued common stock for $480,000 cash in 2017. The company declared and paid cash dividends of $55,000 and purchased treasury stock at a cost of $23,000. The financing section of the statement of cash flows will report Net cash provided by financing activities of:
402,000
Independent Support, Inc. issued common stock for $550,000 cash in 2017. The company declared and paid cash dividends of $49,000 and purchased treasury stock at a cost of $21,000. The financing section of the statement of cash flows will report Net cash provided by financing activities of:
480,000
Given the following data: Accounts Recievable, net 200,0000 Current assets 1,000,000 Total Assets 4,000,000 Net Sales 6,000,000 In vertical analysis , accounts recievable net would be expressed as:
5%
ary Andrews, Inc. had the following transactions: Cash proceeds on sale of land $ 450 comma 000$450,000 Cash proceeds on sale of equipment 150 comma 000150,000 Purchase of treasury stock with cash 50 comma 00050,000 Purchase of equipment with cash 46 comma 00046,000 Issuance of common stock for cash 70 comma 00070,000 On a statement of cash flows prepared under the indirect method, Net cash provided by investing activities is:
554,000
On January 1, 2017, plant assets, net are $220,000. On December 31, 2017, plant assets, net are $270,000. Depreciation expense for the year is $20,000. During the year, plant assets were acquired for $154,000 with cash. There is a Gain on sale of plant asset of $9,000. What are the cash proceeds from the sale of the plant asset?
93,000
Which of the following is a business transaction?
A company pays its employees a yearminus−end bonus.
Which of the following statements regarding a trial balance is TRUE?
A trial balance is a list of all accounts used in a business with their balances. B. A trial balance shows whether total debits equal total credits. C. A trial balance may be prepared at any time during the accounting period.
A company reports the following information from the statement of cash flows: Net cash provided by operating activities $50 million Net income 20 million Net cash provided by investing activities 400 million Net cash used by financing activities (30 million) Which line item provides a signal that the company may have cash flow problems?
A. net cash provided by investing activities
When listing the accounts on the trial balance, where is the dividends account listed?
After Retained Earnings.
Stockholders of a corporation directly elect the:
Board of directors.
The accounts of Local Company at May 31, 2017 are as follows: Account Balance Accounts Payable $23,500 Accounts Receivable $15,600 Cash $68,000 Common Stock $32,000 Dividends $3,000 Insurance Expense $2,100 Retained Earnings $25,800 Salary Expense $1,100 Sales Revenue $10,000 Supplies $1,500 What are the first four lines, in proper order, on the trial balance at May 31, 2017?
Cash, Accounts Receivable, Supplies, Accounts Payable
Which of the following is a CORRECT statement regarding methods to speed up the collection of cash from receivables?
Credit Card Discount Expense is reported on the income statement.
________ is the allocation of the cost of an asset over the asset's useful life.
Depreciation
To document approval of purchase returns, management issues a credit memorandum meaning that accounts payable are reduced for the amount of the return.
False
The Statement of Stockholders' Equity does NOT include:
Equity−Method Investments.
A book value per share of common stock is the same amount as the market value per share.
False
A receiving report informs a vendor of the amount of goods received by the purchaser.
False
An increase in common stock would be listed as an investing activity when preparing the statement of cash flows under the indirect method.
False
A company's debt ratio is computed as total assets minus total liabilities divided by total assets.
False
Cash dividends received on stock investments with less than 20% ownership of the investee should be credited to the Investment in Availableminus−forminus−Sale Securities account.
False
Expenses have a future benefit to the company.
False
For operating leases, the lessee obtains the risks and rewards of owning the leased asset.
False
Gross profit percentage is calculated by dividing cost of goods sold by net sales.
False
If a corporation pays taxes on its income, then the stockholders will not have to pay taxes on the dividends received from that corporation.
False
If a company's debt ratio is much higher than the industry average, the company should be able to pay its debts in tough times.
False
If bonds are issued at a discount, the issuing corporation will pay an amount greater than the face amount of the bonds on the maturity date.
False
Most of the time, net income will be the same as net cash provided by operating activities.
False
The business records of a sole proprietorship should include the proprietor's personal finances.
False
The current ratio is a more stringent measure of a firm's ability to pay current liabilities than the quick ratio.
False
The percentage change in a financial statement line item over two years is computed by dividing the dollar amount of the line item in the most recent year by the prior year dollar amount of the line item.
False
The process of determining the present value of a sum of money is called discounting because the present value of a sum of money is more than the future value of a sum of money.
False
The treasurer conducts the final step for the receipt of cash by mail. This step includes comparing bank deposit amounts from the treasurer and the debit to Cash.
False
Which of the following statements is CORRECT? If the Statement of Cash Flows shows that current assets are increasing far more than current liabilities, the company may have trouble collecting receivables or selling inventory. Your answer is correct.B. When analyzing the Statement of Cash Flows, investors should ignore signals of cash flow distress because the company can show improvements in future periods. C. A shortage of cash could cause a company to face bankruptcy, but lots of cash will ensure success. D. A sign of a healthy company is that financing activities are dominated by borrowing.
If the Statement of Cash Flows shows that current assets are increasing far more than current liabilities, the company may have trouble collecting receivables or selling inventory.
Google Inc. paid $10.6 billion to acquire other companies. Google also paid $33 billion to purchase longminus−term securities. How are these cash outflows classified on the statement of cash flows?
Investing activities
When preparing the statement of cash flows using the indirect method, which statement is INCORRECT?
Losses on the sale of long−term assets are subtracted from net income.
________ is the most common fraud, but ________ is the most expensive fraud.
Misappropriation of assets; fraudulent financial reporting
Ending inventory for the year ended December 31, 2017, is understated by $ 16 comma 000$16,000. How will this error affect net income for 2018?
Net income will be overstated by $16,000.
The purchase of office computers for cash includes a debit to:
Office Equipment and a credit to Cash.
On June 1, 2017, Starbucks paid the rent of $ 60 comma 000$60,000 for 2020 of its stores in Washington and California. The rent covers the period, June 1, 2017 through November 30, 2017. On June 1, Starbucks will record ________. On June 30, Starbucks will record ________.
Prepaid Rent of $60,000; Rent Expense of $ 10000
The closing entry for the Salaries Expense account includes a debit to:
Retained Earnings and a credit to Salaries Expense.
Which of the following is a TRUE statement regarding sales?
Sales revenue recognized in a particular period must be reduced by an amount for estimated sales returns.
Which entity requires companies issuing publicly traded stock to have their financial statements audited by an outside auditor?
Securities and Exchange Commission
Vacation pay and income taxes are examples of expenses that must be estimated.
TRUE
Which of the following statements is TRUE for a limited liability partnership?
The general partner has unlimited liability for the debts of the partnership.
Following U.S. Generally Accepted Accounting Principles, how is a change in accounting estimate handled?
The new estimate must be used in the current and future years only.
Analyzing the statement of cash flows may help investors and analysts determine the financial health of a company. Which of the following signs below is NOT an indicator of a financially healthy company?
The company's operations result in Net cash used by operating activities.
An airline has the following data about an airplane: Annual lease cost $8,000,000 Lease term: 8 years Useful life of airplane: 35 years Fair market value of leased asset: $83 million Present value of lease payments: $78 million Bargain purchase option: None Transfer to lessor at end of lease? Yes Is this a capital or operating lease? Why?
This is a capital lease because it meets at least one of the four capital lease criteria.
Which of the following is typically used as the base in a vertical analysis of a balance sheet?
Total assets
A debit balance in the Retained Earnings account indicates a deficit in Retained Earnings.
Treu
Accounting is an information system that measures business activities.
True
Accounts receivable can be sold to a factor as a means of speeding up cash flows.
True
Beginning inventory and ending inventory have opposite effects on cost of goods sold.
True
Bookkeeping is a mechanical part of accounting.
True
Cash, shortminus−term investments and net current receivables are all components of the numerator of the quick ratio.
True
Expenditures that extend a plant asset's useful life should be capitalized.
True
In an efficient market, an investor's search for "underpriced" stock will be unsuccessful unless the investor has knowledge of relevant private information.
True
Items of comprehensive income, other than net income, do not enter into the determination of earnings per share.
True
Recognizing revenue before it is earned is a major source of financial statement fraud.
True
Some accounts do not need to be adjusted at the end of the period, since the day−to−day transactions provide all the data for these accounts.
True
Stockholders have no personal obligation for the corporation's debts.
True
The account Premium on Bonds Payable increases the issuer's liabilities.
True
The accounting process begins and ends with people making decisions.
True
The combined audit report on a company's financial statements and internal control over financial reporting typically contains five paragraphs.
True
The cost of capital is a weighted average of the returns demanded by the company's stockholders and lenders.
True
The costs assigned to the Land account include legal fees, survey fees, and expenditures for grading and clearing the land.
True
The shipping terms in the sales contract determine when ownership of goods changes hands between the buyer and the seller.
True
Under the indirect method to prepare the statement of cash flows, a loss on the sale of longminus−term assets is added to net income when calculating Net cash provided by operating activities.
True
An example of a company with cash flow problems is:
a company sold property, plant and equipment for $120 million and purchased property, plant and equipment for $50 million.
Unearned Service Revenue relating to services, to be provided in one month, is reported on the balance sheet as:
a current liability.
In computing Net cash provided by operating activities using the indirect method, each of the following is added to net income EXCEPT:
a gain on sale of equipment.
In the balance sheet, the account, Premium on Bonds Payable, is:
added to bonds payable. classified as a liability account.
Using the indirect method to calculate net cash provided by operating activities, a decrease in prepaid expenses is:
added to net income
On a statement of cash flows prepared using the indirect method, an increase in accounts payable during the period is:
added to net income to determine net cash provided by operating activities.
In 2017, Gary Kraen Company purchases $100,000 of equipment with cash. This purchase would be reported on Gary Kraen Company's 2017 statement of cash flows as:
an investing activity
n 2017, Gary Kraen Company purchases $100,000 of equipment with cash. This purchase would be reported on Gary Kraen Company's 2017 statement of cash flows as:
an investing activity.
The balance in the Unrealized Gain on Investment in Availableminus−forminus−Sale Securities account is reported on the ________. The investments are classified as longminus−term.
balance sheet, as part of the stockholders' equity section
All of the following will appear on the bank statement EXCEPT for:
book errors. C. checks paid and deposits made after the cutoff date on the bank statement.
The purchase of treasury stock would be reported on a statement of cash flows as a:
cash outflow under the financing activities.
A company is required to report both basic and diluted earnings per share when the:
company's capital structure includes convertible preferred stock.
T he objectives of internal control do NOT include:
compliance with standards of social responsibility.
A company uses LIFO in one year, then switches to FIFO and then to average-cost. This is a violation of the
consistency principle.
On August 1, Steffen Computers, Inc. purchased thirty computer chips, on account, from a company located in Taiwan for 530,000 Taiwan dollars. On that date the Taiwan dollar is worth $0.034. On September 1, when the Taiwan dollar was worth $0.036, payment was made. The journal entry on September 1 by Steffen Computers, Inc. would include a: (Round your final answer to the nearest dollar.)
credit to Foreign−Currency Transaction Gain −$1,060.
The chronological order of dates for cash dividends are:
date of declaration, date of record, date of payment.
On May 1, Santelle Company purchased $ 900$900 of inventory on account with credit terms of 44/10, net 30. Santelle uses the perpetual inventory system. On May 2, the seller gave Santelle a $ 190$190 allowance due to a product defect. What journal entry did Santelle Company prepare on May 2?
debit Accounts Payable for $ 190$190 and credit Inventory for $ 190$190.
Equipment with a historical cost of $ 140 comma 000$140,000 and Accumulated Depreciation of $ 140 comma 000$140,000 is junked. Which journal entry is necessary?
debit Accumulated Depreciation-Equipment for $ 140 comma 000$140,000 and credit Equipment for $ 140 comma 000$140,000. This is the correct answer.B.
Apple Inc. issued 5 million shares of nominus−par common stock for $5 million. What journal entry is prepared?
debit Cash $5 million and credit Common Stock $5 million
Under the periodic inventory system, which of the following entries is prepared at the end of the accounting period?
debit Cost of Goods Sold and credit Inventory C. debit Cost of Goods Sold and credit Purchases
On January 1, 2017, Corbin Company purchases $170,000, 6% bonds at a price of 99 and a maturity date of January 1, 2027. Corbin Company intends to hold the bonds until their maturity date. Interest is paid semiannually, on January 1 and July 1. Corbin Company has a calendar year end and uses the straightminus−line amortization method for discounts and premiums. The entry to amortize the bond investment on July 1, 2017 is:
debit Heldminus−tominus−Maturity Investment in Bonds for $85 and credit Interest Revenue for $85.
On January 1, 2017, Bucket Company purchased as an investment a $1200, 6% bond for $900. Bucket plans to hold the bond until the maturity date of January 1, 2027. The bond pays interest on January 1 and July 1. The company's fiscal year ends on December 31 and it uses the straightminus−line amortization method for discounts and premiums. The journal entry on December 31, 2017 is:
debit Interest Receivable for $36, debit Heldminus−tominus−Maturity Investment in Bond for $15 and credit Interest Revenue for $51.
If a company receives a note receivable on account, what journal entry is prepared?
debit Notes Receivable and credit Accounts Receivable
Kunze Corporation has $1 par value Common Stock with 100,000 shares authorized and 25,000 shares issued. The journal entry to record Kunze's purchase of 2 comma 0002,000 shares of common stock at $ 5$5 per share would be:
debit Treasury Stock for $ 10 comma 000$10,000 and credit Cash for $ 10 comma 000$10,000.
Under the direct writeminus−off method, what journal entry is prepared when an account is determined to be worthless or uncollectible?
debit Uncollectibleminus−Account Expense and credit Accounts Receivable
A bond was issued at a discount. The journal entry to record payment of this bond payable at maturity will include a:
debit to Bonds Payable and a credit to Cash.
Trading securities purchased in 2016 for $ 90 comma 300$90,300, had a fair value of $ 92 comma 100$92,100 on December 31, 2016. At December 31, 2017 the securities had a fair value of $ 95 comma 700$95,700. The journal entry on December 31, 2017 would include a
debit to the Investment in Trading Securities account for $ 3 comma 600$3,600.
In present value calculations, the process of determining the present value of a single sum of money is called:
discounting.
A disadvantage of general partnerships is:
each partner may conduct business in the name of the entity and make agreements that legally bind all partners
A disadvantage of general partnerships is:
each partner may conduct business in the name of the entity and make agreements that legally bind all partners.
An investor who may significantly influence the business activities of the investee should report the investment using the:
equity method
A partnership is a taxpaying entity.
false
At the end of each period, unrealized gains and losses on trading securities are closed and eventually become part of retained earnings on the income statement.
false
For most firms, the gross profit percentage changes significantly from year to year.
false
Of the three types of business activities reported on a statement of cash flows, investing activities are the most important when evaluating a business.
false
Ordinary annuity investments provide multiple receipts of an unequal amount at fixed yearminus−end intervals over the investment's duration.
false
Taxable income should always equal pretax accounting income.
false
Which of the following is NOT used to determine the cost of net purchases?
freight−out
When converting net income to net cash provided by operating activities on the statement of cash flows, indirect method, which of the following is NOT added to net income?
gain on sale of land
Companies use a bank lockminus−box system to:
get the cash to the bank in a more timely manner.
Total wages employees earned for the payroll period are called ________. The amount of wages the employees take home is the ________.
gross pay; net pay
Cash and cash equivalents do NOT include:
high−grade U.S. government securities maturing in 5 years.
The formula to determine income tax expense is:
income before income tax expense (from the income statement) multiplied by the income tax rate.
Unrealized gains on trading securities are reported on the:
income statement as Other Revenues and Gains.
If $ 390 comma 000$390,000 of bonds are issued during the year and $ 80 comma 000$80,000 of bonds are retired during the year, the statement of cash flows (indirect method) will show a(n):
increase in cash of $ 390 comma 000$390,000 in the financing activities section and a decrease in cash of $ 80 comma 000$80,000 in the financing activities section.
If $ 410 comma 000$410,000 of bonds are issued during the year and $ 120 comma 000$120,000 of bonds are retired during the year, the statement of cash flows (indirect method) will show a(n):
increase in cash of $ 410 comma 000$410,000 in the financing activities section and a decrease in cash of $ 120 comma 000$120,000 in the financing activities section.
If $420,000 of bonds are issued during the year and $100,000 of bonds are retired during the year, the statement of cash flows (indirect method) will show a(n):
increase in cash of $420,000 in the financing activities section and a decrease in cash of $100,000 in the financing activities section.
How does the declaration and receipt of a cash dividend on a longminus−term Investment in Availableminus−forminus−Sale Securities affect the balance sheet?
increases assets and increases retained earnings
Increases and decreases in the longminus−term assets are reported on the statement of cash flows as:
investing activities
Under the direct method of preparing the operating section of the statement of cash flows, net cash provided by financing activities is $498,000. If the indirect method of preparing the statement of cash flows was used:
net cash provided by financing activities would be the same, $498,000.
Earnings per share (EPS) is calculated as:
net income divided by the weightedminus−average number of shares of common stock outstanding throughout the year.
On a common−size income statement, income taxes expense is expressed as a percentage of:
net sales.
Redeemable preferred stock:
obligates the company to pay to retire the stock at a set price. is redeemed at its liquidation value.
The most important type of cash flows on the statement of cash flows is ________. The least important type of cash flows on the statement of cash flows is ________.
operating activities; financing activities.
Treasury stock accounts for the difference between the number of:
outstanding shares and issued shares.
On a statement of cash flows, which is NOT considered a financing activity?
paid income taxes
All of the following may appear as an adjustment of net income when preparing the statement of cash flows using the indirect method EXCEPT:
payment of cash dividends.
Examples of internal control procedures do NOT include:
risk assessment.
To help keep debt ratios within normal limits, companies might adopt the following strategy:
sell stock.
The inventory turnover ratio:
shows how many times the company sold its average level of inventory.
Factoring accounts receivable is used by:
startminus−up companies. B. companies with a weak or no credit history. C. companies with a significant amount of debt.
Bonds with a face value of $200,000 were sold at an effective interest rate of 8% to yield cash proceeds in excess of $200,000. It is apparent that the bonds had a:
stated interest rate greater than NaN%.
Long−term investments include:
stocks and bonds that are not liquid or readily convertible to cash. Your answer is not correct.B. securities reported in the nonminus−current asset section of the balance sheet. C. securities that the investor expects to hold longer than one year or operating cycle, whichever is longer. D. all of the above.
For a plant asset that generates revenue evenly over time, which depreciation method best meets the expense recognition principle?
straight-line
Under the indirect method of preparing the statement of cash flows, a gain on the sale of equipment is:
subtracted from net income in the operating activities section.
In a bank reconciliation, a bank service charge for printing checks is:
subtracted from the book balance.
The carrying amount of bonds issued at a discount is calculated by:
subtracting Discount on Bonds Payable from Bonds Payable.
If the bank records a deposit of $140 as $1400 , the error should be shown on a bank reconciliation as a:
subtraction from the bank balance of $1260.
The impairment test for longminus−term assets applies to:
tangible longminus−term assets. B. intangible longminus−term assets.
In the cash budget, new financing is needed if:
the budgeted cash balance exceeds the cash available before new financing.
Horizontal analysis is performed on information from:
the income statement, the balance sheet, and the statement of cash flows.
Legal capital for a corporation equals:
the par value of stock that has been issued.
Which one of the following is NOT a stockholder's right of ownership in a corporation?
the right to decide if a dividend should be distributed
Which of the following ARE stockholders right of ownership in a corporation
the right to maintain one's proportionate share of ownership in the corporation B. the right to participate in management by voting on matters that come before the stockholders C. the right to receive a proportionate share of the assets remaining after all liabilities are paid upon liquidation
If a company only has common stock outstanding, book value per share of common stock is computed by dividing:
total stockholders' equity divided by the number of common shares of stock outstanding.
Horizontal analysis is most closely related to:
trend analysis.
Accounting is often called the language of business.
true
For investment analysis, it is generally considered more useful to calculate the percentage changes in the dollar amounts of financial statement line items from year to year instead of using the absolute dollar amounts.
true
The books need to be closed in order to prepare the accounts for the next period's transactions.
true
Expressing cash and cash equivalents as a percentage of total assets is an example of
vertical analysis.
A company reports the following balances: 12/31/2016 12/31/2017 Common Stock $14,000 $162,000 Paidminus−in Capital in Excess of Par 97,000 109,000 Retained Earnings 64,000 79,000 During 2017, dividends of $17,000 were declared and paid. What is net income for 2017?
$32,000
he ending bank statement balance at November 30 is $7000. The bank statement shows a service charge of $85, electronic funds receipts of $600 and a NSF check for $250. Deposits in transit total $2,050 and outstanding checks are $1,835. The balance per books at November 30 is $6950. What is the adjusted book balance at November 30?
$7265
In 2017, Chen Corporation purchased treasury stock with a cost of $46,000. During the year, the company declared and paid dividends of $14,000 and issued bonds payable for $900,000. Net cash provided by financing activities for 2017 is:
$840,000.
How is the trend percentage for sales in 2017 computed? The base year is 2012.
(Year 2017 sales divided by÷ Year 2012 sales) times× 100
Internal control is a plan of organization and system of procedures, implemented by company ________ and the ________, designed to accomplish five objectives.
management, board of directors
If economic value added (EVA) is negative
stockholders' wealth has decreased