Accounting

The cost of goods sold for a business was $74,300. if this business had beginning inventory of $55,000, ending inventory of $31,700, and a gross profit of $41,000, net sales would have been ___________ and purchases would have been_______________________

$115,300; $51,000

A parent company must own how much of the subsidiary's common stock?

25%

A business begins its fiscal year with an inventory balance of $1,000,000...........

4.67

a business begins its fiscal year with $10,000,000.................

5.62518

Net worth appears below what group of accounts?

cash & amp; cash equivalents

How often are indefinite life intangibles tested for impairment?

yearly

After applying the temporal method of a company must report any gains/losses on which financial statement?

income statement

When is the temporal method used?

when a foreign country wants to convert to the U.S. dollars

What are the two major categorizations of stakeholders?

internal and external

What account is usually the largest current asset?

inventory

The purpose of the double-entry procedure in accounting is to:

keep the accounting equation in balance

What two types of useful life are used to classify intangible assets?

limited or unlimited (indefinite)

For receivable, the amount the company expects to receive in cash is known as the:

net realizable value

The disclosure of a gain contingency is affected by what two things?

not the matching principle and the materiality constraint

Cash inflows from cash receipts, interest, and dividends received represent what category of activities?

operating activities

The higher of either the asset's future value or the amount it can be sold for is known as:

carrying value

Which of the following is the correct order of how assets should be presented on a balance sheet?

cash; inventory; property;plant and equipment(PPE); accounts receivable

Payment received prior to delivering the product or service is classified as:

deferred revenue

What type of pension plan lets an employee know the terms of the benefit to be received upon retirement?

defined benefit plan

Which of the following is NOT a current asset?

Cash

the plan description includes which of these?

all these answers

The fundamental activities a business engages in are known as:

operating activities

Which of the following correctly defines a method of determining a single period investment's yield?

Change-in-value

Which of these is an example of a non-operating activity?

selling an asset

Each journal entry must have:

Both a debit and a credit

How is deferred revenue shown on the balance sheet?

as a liability

What method of calculating depreciation uses this formula: Value- residual value divided by useful life?

straight-line

Which method charges an equal amount of depreciation to each accounting period?

straight-line

A company using FIFO would have inventory that consists of?

the most recent purchases

Under the Equity Method, what causes the balance of the investment to decrease?

the pro-rata share of dividends declared by the subsidiary

Which method is used to amortize an identifiable intangible asset?

the straight-line method

Why would a customer convert their account into a note receivable?

to give them more time to pay

discovering an asset was not revalued using FMV results in:

an accounting error

Owners and employees are what type of stakeholder?

internal

When making entries in the General Journal, what rule must always be followed?

Debits must equal credits

If an organization attempts to use the direct write-off method to record and write off an uncollectable receivable account, the entry from an accounting perspective will include which of the following?

Decrease to the asset account AND increase expense account

The difference between the cost of inventory calculated under the FIFO and LIFO methods is known as?

LIFO reserve

What does the gross profit method assume?

That the profit ratio remains stable during the period

under the specific provision, how is bad debt provision calculated?

Using a fixed percentage

When is a journal entry prepared?

after examining the source document and determining a business transaction has occurred

What type of situation would require a company to test an asset for impairment?

all of these answers

Which of the following influences how a dividend is reported on a company's books?

all of these answers

Which of the following is a cost to the investor that is included in the calculation of an investment's interest rate?

all of these answers

Which of the following is a drawback of share repurchases for shareholders?

all of these answers

Which of the following is an element of a company's dividend policy?

all of these answers

Which of these is an example of an external stakeholder?

all of these answers

internal users such as management can use the financial statements such as the balance sheet to:

all of these answers

When analyzing financial info the comparisons and relationships can be shown as:

all these answers

Why must the costs associated with research and development be immediately expensed?

all these answers

Which is the correct formula for calculating present value using compound interest?

all these times

Barnby Clothing Company decided to buy a new factory and expand the business. The purchase cost was $300,000. Barnby Clothing Company paid $150,000 in cash and took out a loan for the remainder of the purchase cost. When Barnby completed this transaction, what happened to the accounting equation?

an asset was credited, another asset was debited, and an expense was credited

Completing the purchase of an asset is considered what type of activity?

an investing activity

What is an expense that is recognized before it is paid out called?

an outstanding expense

Sales tax payable and income tax payable are reported on the balance sheet:

as a current liability until paid

Under the Equity Method, how does the investor report the investment?

as an asset

Where is depreciation reported on the financial statements?

as depreciation expense on the income statement and accumulated depreciation on the balance sheet.

According to the Financial Accounting Standards Board, when would a company record research and development costs?

as soon as the costs are incurred.

Which of the following types of accounts does NOT have a normal credit balance?

assets

Fair value is used for what type of assets?

assets that have a carrying value based on market-to-market valuations

How is an intangible purchased from another company recorded?

at purchase price

What is calculated by dividing total cost of good available for sale by the total unites available for sale?

average cost of goods available for sale

Dividing total cost of goods available for sale by the total units available for sale gives you?

average unit cost

What is the most common reason fair value is used to approximate the market value of an asset?

because there is no established market for the asset

What is the best way to value inventory?

by relying on accounting records

The allowance for bad debts account is an example of what type of account?

contra-asset account

On the dividend declaration date, what transaction is made to record the dividend?

debit to dividends payable and credit to cash

Bad debts are only recognized after the company is certain the debt will NOT be paid under which method?

direct write-off method

if a company sells off a division, that is an example of:

discontinued operation

A portion of the company's profits paid out to shareholder's is known as:

dividends

What is calculated by adding back interest and taxes to net income?

earnings before interest and taxes

When must companies calculate the fair market value of available for sale securities?

end of each subsequent accounting period

How long is an asset depreciated?

throughout its useful life

What is the purpose of cross-indexing?

to make it possible to trace the origin of an entry

If a company wanted to take the greatest reduction to their revenue and assets early in the asset's life, what method of depreciation would they use?

units of production method

The window of time a company plans to use the asset is known as:

useful life

When must the note receivable be due in order to be classified as a current asset?

within 30 days