Question 1

Sales less cost of goods sold

Accepted Answer

Gross prof...

Question 2

The _____ would result in an increase in income under the cash basis but not an increase in income under the accrual basis.

Accepted Answer

A)  credit sale of inventory at a sales price in excess of the inventory's cost
B)  cash collection from a credit customer
C)  cash sale of inventory at a sales price in excess of the inventory's cost
D)  return of defective inventory purchased on account to a supplier where a full credit was givenE) A) and C)
F) A) and B)

Question 3

Intangible assets are amortized.

Accepted Answer

A) True 
 B)False

Question 4

An income statement that merely lists all expenses without drawing subtotals

Accepted Answer

Single-ste...

Question 5

Physical items that a person can see and touch, such as property, plant, and equipment

Accepted Answer

Fixed asse...

Question 6

Preferred stock normally confers voting power to its owners.

Accepted Answer

A) True 
 B)False

Question 7

A company receives cash before delivering the related goods or services

Accepted Answer

Unearned r...

Question 8

If a company has net income for the current year, then its year-end cash balance must be greater than its beginning of the year cash balance.

Accepted Answer

A) True 
 B)False

Question 9

Old equipment having a book value of $12,000 was sold for $10,000 cash.New equipment was purchased for $25,000 cash.Additional equipment was acquired in exchange for a $17,000 long-term note payable.The cash flow from investing activities was_____.

Accepted Answer

A)  $15,000) 
B)  $13,000) 
C)  $30,000) 
D)  $32,000) E) A) and B)
F) None of the above

Question 10

Long-lived assets that are not physical in nature

Accepted Answer

The answer of Long-lived assets that are not physical in...

Question 11

The liabilities of Becky Company are listed below:   Accounts payable $20,000 First Mortgage bonds payable $100,000 Debentures payable $80,000\begin{array} { l r } 	ext { Accounts payable } & \$ 20,000 \	ext { First Mortgage bonds payable } & \$ 100,000 \	ext { Debentures payable } & \$ 80,000\end{array} Accounts payable  First Mortgage bonds payable  Debentures payable ​$20,000$100,000$80,000​  Becky Company liquidated its assets, receiving $150,000 cash.The debenture holders will receive _____ if the debentures are unsubordinated.

Accepted Answer

A)  $10,000
B)  $30,000
C)  $40,000
D)  $50,000 E) None of the above
F) B) and D)

Question 12

A gain on the sale of a fixed asset is reported on the statement of cash flows _____.

Accepted Answer

A)  as an adjustment to operating activities under the indirect method
B)  as an adjustment to operating activities under the direct method
C)  as an adjustment to operating activities, regardless of the method used
D)  None of these answers is correct.E) A) and D)
F) All of the above

Question 13

When using the direct method, depreciation is added to net income.

Accepted Answer

A) True 
 B)False

Question 14

Land is never depreciated.

Accepted Answer

A) True 
 B)False

Question 15

Deferred income tax is a noncurrent liability.

Accepted Answer

A) True 
 B)False

Question 16

The Allowance for Bad Debts account is added to the Accounts Receivable account on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 17

An example of an investing activity on the statement of cash flows is purchasing fixed assets by issuing debt.

Accepted Answer

A) True 
 B)False

Question 18

The liabilities of Sam Company are listed below: Accounts payable $20,000
First Mortgage bonds payable $100,000
Debentures payable $80,000
Sam Company liquidated its assets, receiving $140,000 cash.The debenture holders will receive _____ if the debentures are subordinated.

Accepted Answer

A)  $10,000
B)  $20,000
C)  $40,000
D)  $60,000E) A) and D)
F) B) and D)

Question 19

A company's inventory method affects its income statement and balance sheet.

Accepted Answer

A) True 
 B)False

Question 20

_____ is not a current asset.

Accepted Answer

A)  Accounts Receivable
B)  Goodwill
C)  Prepaid Expenses
D)  None of these answers is correctE) None of the above
F) All of the above

Exam 16: Understanding Corporate Annual Reports: Basic Financial Statements

A company receives cash before delivering the related goods or services

Correct Answer
verified
Unearned r...
View Answer

The Allowance for Bad Debts account is added to the Accounts Receivable account on the balance sheet.

Correct Answer
verified

A company's inventory method affects its income statement and balance sheet.

Correct Answer
verified

Old equipment having a book value of $12,000 was sold for $10,000 cash.New equipment was purchased for $25,000 cash.Additional equipment was acquired in exchange for a $17,000 long-term note payable.The cash flow from investing activities was_____.

Correct Answer
verified

Physical items that a person can see and touch, such as property, plant, and equipment

Correct Answer
verified
Fixed asse...
View Answer

Correct Answer
verified

An income statement that merely lists all expenses without drawing subtotals

Correct Answer
verified
Single-ste...
View Answer

The _____ would result in an increase in income under the cash basis but not an increase in income under the accrual basis.

Correct Answer
verified

Land is never depreciated.

Correct Answer
verified

Intangible assets are amortized.

Correct Answer
verified

Preferred stock normally confers voting power to its owners.

Correct Answer
verified

If a company has net income for the current year, then its year-end cash balance must be greater than its beginning of the year cash balance.

Correct Answer
verified

Long-lived assets that are not physical in nature

Correct Answer
verified

An example of an investing activity on the statement of cash flows is purchasing fixed assets by issuing debt.

Correct Answer
verified

When using the direct method, depreciation is added to net income.

Correct Answer
verified

A gain on the sale of a fixed asset is reported on the statement of cash flows _____.

Correct Answer
verified

Deferred income tax is a noncurrent liability.

Correct Answer
verified

The liabilities of Sam Company are listed below: Accounts payable $20,000 First Mortgage bonds payable $100,000 Debentures payable $80,000 Sam Company liquidated its assets, receiving $140,000 cash.The debenture holders will receive _____ if the debentures are subordinated.

Correct Answer
verified

Sales less cost of goods sold

Correct Answer
verified
Gross prof...
View Answer

_____ is not a current asset.

Correct Answer
verified

Exam 16: Understanding Corporate Annual Reports: Basic Financial Statements

A company receives cash before delivering the related goods or services

Correct AnswerverifiedUnearned r...View AnswerShow Answer

The Allowance for Bad Debts account is added to the Accounts Receivable account on the balance sheet.

Correct AnswerverifiedShow Answer

A company's inventory method affects its income statement and balance sheet.

Correct AnswerverifiedShow Answer

Old equipment having a book value of $12,000 was sold for $10,000 cash.New equipment was purchased for $25,000 cash.Additional equipment was acquired in exchange for a $17,000 long-term note payable.The cash flow from investing activities was_____.

Correct AnswerverifiedShow Answer

Physical items that a person can see and touch, such as property, plant, and equipment

Correct AnswerverifiedFixed asse...View AnswerShow Answer

Correct AnswerverifiedShow Answer

An income statement that merely lists all expenses without drawing subtotals

Correct AnswerverifiedSingle-ste...View AnswerShow Answer

The _____ would result in an increase in income under the cash basis but not an increase in income under the accrual basis.

Correct AnswerverifiedShow Answer

Land is never depreciated.

Correct AnswerverifiedShow Answer

Intangible assets are amortized.

Correct AnswerverifiedShow Answer

Preferred stock normally confers voting power to its owners.

Correct AnswerverifiedShow Answer

If a company has net income for the current year, then its year-end cash balance must be greater than its beginning of the year cash balance.

Correct AnswerverifiedShow Answer

Long-lived assets that are not physical in nature

Correct AnswerverifiedShow Answer

An example of an investing activity on the statement of cash flows is purchasing fixed assets by issuing debt.

Correct AnswerverifiedShow Answer

When using the direct method, depreciation is added to net income.

Correct AnswerverifiedShow Answer

A gain on the sale of a fixed asset is reported on the statement of cash flows _____.

Correct AnswerverifiedShow Answer

Deferred income tax is a noncurrent liability.

Correct AnswerverifiedShow Answer

The liabilities of Sam Company are listed below: Accounts payable $20,000 First Mortgage bonds payable $100,000 Debentures payable $80,000 Sam Company liquidated its assets, receiving $140,000 cash.The debenture holders will receive _____ if the debentures are subordinated.

Correct AnswerverifiedShow Answer

Sales less cost of goods sold

Correct AnswerverifiedGross prof...View AnswerShow Answer

_____ is not a current asset.

Correct AnswerverifiedShow Answer

Correct Answer
verified
Unearned r...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Fixed asse...
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Correct Answer
verified

Correct Answer
verified
Single-ste...
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Gross prof...
View Answer

Correct Answer
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