Which of the following financial statements reports informat
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1. Which of the following financial statements reports information about events that occurred during a certain period of time?
Balance Sheet Income Statement
a. Yes Yes
b. Yes No
c. No Yes
d. No No
2. Cash or other resources expected to be converted to cash or consumed during the next fiscal year would be classified as
a. current assets
b. plant assets
c. liquid assets
d. intangible assets
3. The difference between the selling price of goods sold to customers during a period and the cost of the goods sold is
a. pretax income
b. operating income
c. net income
d. gross profit
4. Which of the following is used to evaluate liquidity?
a. operating expenses
b. current assets
c. plant, property, and equipment
d.other assets
5. Which of the following must be known in order to determine the organization's total amount of working capital?
Current Assets Long-Term
a. Yes Yes
b. Yes No
c. No Yes
d. No No
6. The term "working capital" describes the
a. amount of equity (ownership) capital in the firm
b. portion of capital actively employed in generating revenues
c. amount of debt (borrowed) capital in the firm
d. excess of current resources over current obligations
7. Total assets, liabilities, and owner's equity are reported on which of the following statements?
Balance Sheet Income Statement
a. Yes Yes
b. Yes No
c. No Yes
d.No No
8. Which of the following accounts might require the use of estimates and allocations in order to determine an amount of an expense to be recorded?
a. accounts receivable
b. depreciation
c. cash
d.sales
9. Under the concept of articulation, which of the following is the link between the cash inflow from customers and sales revenue?
a. accounts receivable
b. cost of goods sold
c. inventory
d.accounts payable
10. Where, on an income statement, would you expect to find the term Advertising Expense?
a. just after gross margin
b. grouped with the other operating expenses
c. immediately after net sales revenue
d. it would not be shown on a multiple-step income statement
11. Comparative financial statements report the combined economic activities of two or more corporations owned by the same stockholders.
a. True
b. False
12. Which of the following statements about earnings per share is NOT TRUE?
a. GAAP require that corporate income statements prepared for external use present earnings per share
b. earnings per share is a measure of the earnings performance of each share of common stock during a period
c. earnings per share is a measure of the amount of dividends per share distributed to stockholders during a period
d. earnings per share is computed by dividing net income by the number of common shares outstanding during a period
13. The financial statement that reports an organization's assets, liabilities, and owners' equity accounts is the
a. income statement
b.gross profit statement
c. balance sheet
d. statement of cash flows
14. Which of the following accounts should be classified on the balance sheet as an intangible asset?
a. prepaid insurance
b. cash
c. investment in another company
d. stockholders' equity
e. trademark
15. The difference between the selling price of goods sold to customers during a period and the cost of the goods sold is gross profit.
a. True
b. False
16. Comprehensive income is
a. another term for operating income
b. the change in equity resulting from non-owner transactions and events
c. the income earned by a company
d. dividend income
17. Which of the following is a false statement?
a. operating income is another term for gross profit
b. operating expense on an income statement is listed after cost of goods sold
c. some revenues and expenses on the income statement may not directly relate to a company's primary operations
d.income taxes are generally reported after other revenues and expenses on an income statement
18. The Stable Company reports the following information:
Accounts payable$ 600Accounts receivable$ 8,200Cash5,000Mortgage payable4,400Retained earnings7,800Inventory9,200Buildings17,600Office supplies2,600
What is the amount of the firm's current assets?
a. $13,200
b. $25,000
c. $22,400
d.$42,600
19. Which of the following sub classifications should be reported LAST in the asset section of the balance sheet?
a. other assets
b. current assets
c. property, plant, and equipment
d. long-term investments
20. A statement of stockholders' equity differs from a balance sheet in that
a stockholders' equity is not reported on the balance sheet
b. the statement of stockholders' equity reports activity for a period of time while the balance sheet reports at a specific point in time
c.contributed capital is reported on the statement of stockholders' equity but not on the balance sheet
d. retained earnings are added to the balance sheet but deducted from the statement of stockholders' equity
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Solution Summary
Which of the following financial statements reports information about events that occurred during a certain period of time?
Balance Sheet Income Statement
a. Yes Yes
b. Yes No
c. No Yes
d. No No
2. Cash or other resources expected to be converted to cash or consumed during the next fiscal year would be classified as
a. current assets
b. plant assets
c. liquid assets
d. intangible assets
3. The difference between the selling price of goods sold to customers during a period and the cost of the goods sold is
a. pretax income
b. operating income
c. net income
d. gross profit
4. Which of the following is used to evaluate liquidity?
a. operating expenses
b. current assets
c. plant, property, and equipment
d.other assets
5. Which of the following must be known in order to determine the organization's total amount of working capital?
Current Assets Long-Term
a. Yes Yes
b. Yes No
c. No Yes
d. No No
6. The term "working capital" describes the
a. amount of equity (ownership) capital in the firm
b. portion of capital actively employed in generating revenues
c. amount of debt (borrowed) capital in the firm
d. excess of current resources over current obligations
7. Total assets, liabilities, and owner's equity are reported on which of the following statements?
Balance Sheet Income Statement
a. Yes Yes
b. Yes No
c. No Yes
d.No No
8. Which of the following accounts might require the use of estimates and allocations in order to determine an amount of an expense to be recorded?
a. accounts receivable
b. depreciation
c. cash
d.sales
9. Under the concept of articulation, which of the following is the link between the cash inflow from customers and sales revenue?
a. accounts receivable
b. cost of goods sold
c. inventory
d.accounts payable
10. Where, on an income statement, would you expect to find the term Advertising Expense?
a. just after gross margin
b. grouped with the other operating expenses
c. immediately after net sales revenue
d. it would not be shown on a multiple-step income statement
11. Comparative financial statements report the combined economic activities of two or more corporations owned by the same stockholders.
a. True
b. False
12. Which of the following statements about earnings per share is NOT TRUE?
a. GAAP require that corporate income statements prepared for external use present earnings per share
b. earnings per share is a measure of the earnings performance of each share of common stock during a period
c. earnings per share is a measure of the amount of dividends per share distributed to stockholders during a period
d. earnings per share is computed by dividing net income by the number of common shares outstanding during a period
13. The financial statement that reports an organization's assets, liabilities, and owners' equity accounts is the
a. income statement
b.gross profit statement
c. balance sheet
d. statement of cash flows
14. Which of the following accounts should be classified on the balance sheet as an intangible asset?
a. prepaid insurance
b. cash
c. investment in another company
d. stockholders' equity
e. trademark
15. The difference between the selling price of goods sold to customers during a period and the cost of the goods sold is gross profit.
a. True
b. False
16. Comprehensive income is
a. another term for operating income
b. the change in equity resulting from non-owner transactions and events
c. the income earned by a company
d. dividend income
17. Which of the following is a false statement?
a. operating income is another term for gross profit
b. operating expense on an income statement is listed after cost of goods sold
c. some revenues and expenses on the income statement may not directly relate to a company's primary operations
d.income taxes are generally reported after other revenues and expenses on an income statement
18. The Stable Company reports the following information:
Accounts payable$ 600Accounts receivable$ 8,200Cash5,000Mortgage payable4,400Retained earnings7,800Inventory9,200Buildings17,600Office supplies2,600
What is the amount of the firm's current assets?
a. $13,200
b. $25,000
c. $22,400
d.$42,600
19. Which of the following sub classifications should be reported LAST in the asset section of the balance sheet?
a. other assets
b. current assets
c. property, plant, and equipment
d. long-term investments
20. A statement of stockholders' equity differs from a balance sheet in that
a stockholders' equity is not reported on the balance sheet
b. the statement of stockholders' equity reports activity for a period of time while the balance sheet reports at a specific point in time
c.contributed capital is reported on the statement of stockholders' equity but not on the balance sheet
d. retained earnings are added to the balance sheet but deducted from the statement of stockholders' equity
Solution Preview
Which of the following financial statements reports information about events that occurred during a certain period of time? A
Balance Sheet Income Statement
a. Yes Yes
b. Yes No
c. No Yes
d. No No
2. Cash or other resources expected to be converted to cash or consumed during the next fiscal year would be classified as A
a. current assets
b. plant assets
c. liquid assets
d. intangible assets
3. The difference between the selling price of goods sold to customers during a period and the cost of the goods sold is D
a. pretax income
b. operating income
c. net income
d. gross profit
4. Which of the following is used to evaluate liquidity? B
a. operating expenses
b. current assets
c. plant, property, and equipment
d.other assets
5. Which of the following must be known in order to determine the organization's total amount of working capital? A
Current Assets Long-Term
a. Yes Yes
b. Yes No
c. No Yes
d. No No
6. The term "working capital" describes the D
a. amount of equity (ownership) capital in the firm
b. portion of capital actively employed in generating revenues
c. amount of debt (borrowed) capital in the firm
d. excess of current resources over current obligations
7. Total assets, ...
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