Which of the following organizations is responsible for setting auditing standards
followed by public accounting firms in conducting independent audits of financial
statements?
a. Financial Accounting Standards Board (FASB)
b. Securities and Exchange Commission (SEC)
c. Public Company Accounting Oversight Board (PCAOB)
d. International Accounting Standards Board (IASB)
Several items from the financial statements of Standard Tires are listed below. Use the f
ollowing answer choices to identify the type of accountf
or each item listed. Place your answers in the space provided.
a. Assets
b. Liabilities
c. Revenues
d. Expenses
e. Owners’ equity Inventories
The accountant for Rogan Corp. was preparing a bank reconciliation as of February 28,
2014. The following items were identified:
What amount will Rogan report as its adjusted cash balance at February 28, 2014?
a. $12,385
b. $12,500
c. $14,885
d. $17,385
Read the information for Taryn Corporation. Determine the following amounts for
Taryn Corporation: A) Total revenues for 2014
B) Total expenses for 2014C) What is the purpose of the income statement?
D) Is Taryn Corp. profitable? Explain your answer.
E) Is this the first year of operations for Taryn Corp.? Explain your answer.
In order to evaluate a company’s gross profit ratio,
a. the ratio should be compared with forecasted financial statements.
b. the ratio should be compared with those of prior years.
c. the ratio should be compared with other companies in the same industry.
d. the ratio should be compared with those of both prior years and competitors.
A company’s balance sheet shows the account, Notes Payable. This resulted from a loan
made by the company’s bank. If the end-of-year balance in the notes payable account
exceeds the beginning-of-year balance by $5,000, this is shown on the cash flow
statement as an
a. inflow of cash of $5,000 in the operating activities category.
b. outflow of cash of $5,000 in the operating activities category.
c. inflow of cash of $5,000 in the financing activities category.
d. outflow of cash of $5,000 in the financing activities category.
Which of the following statements is false ?
a. Checks and deposit slips are the main source of documents backing up the bank
statement.
b. Retailers use cash register tapes to recognize sales.
c. Stock certificates are evidence of being a creditor of the company.
d. Time cards are used as the source of information to record wages.
The solution to this problem requires time value of money calculations. Reference to
Tables 9-1 through 9-4 in the text is necessary to complete the calculations. The table
factor for the future value of an annuity for 4 annual deposits at 8% is
a. the same as for the future value of $1 multiplied by 4.
b. the reciprocal of the future value of $1 factor for n = 4 and 8%.
c. the cumulative total of the future value of $1 factors for 4 deposits at 8%.
d. the same as using the future value of $1 factors at 8% for 3, 2, 1 and 0 periods.
All of the following refer to the face rate of interest on a bond except:
a. stated rate
b. effective rate
c. nominal rate
d. coupon rate
One measure of a company’s overall long-term financial health is the debt-to-equity
ratio.
a. True
b. False
On January 1, 2015, A-Best Company’s balance in retained earnings was $70,000. At
the end of the year, December 31, 2015, the balance in retained earnings was $94,000.
During 2015, the company earned net income of $40,000. How much were dividends?
a. $16,000
b. $24,000
c. $40,000
d. $64,000