From the list of accounts below, determine whether the account would be a nominal
account or a real account.
a.nominal account
b.real account
Cash
Assume the current ratio is 3 to 1. Estimating the warranties expense on the period’s
sales would cause the current
ratio to
a.be unchanged since it has no effect on any current accounts.
b.be unchanged since the effects offset one another.
c.decrease.
d.increase.
See the transactions to Morton & Associates. The journal entry to record the May 31
transaction will include a decrease in
a.Salaries Expense
b.Service Revenue
c.Accounts Receivable
d.Cash
Culinary Delights Company
Use the financial statements for Culinary Delights Company to answer the questions
that follow.
Refer to the financial statements of Culinary Delights Company.
REQUIRED:
(A)Culinary Delights’ cash flow from operations for 2016 is $323,847 (in thousands).
Evaluate Culinary Delights’ short-term cash flow position during 2016. Is the company
in danger of problems? Explain.
(B)Evaluate Culinary Delights’ inventory management during 2016.
For each item listed, select the section of the balance sheet in which the item would be
reported.
a.Current Assets
b.Property. Plant, and Equipment
c.Current Liabilities
d.Long-term Liabilities
e.Stockholders’ Equity
Accounts payable
Use the information below for Flora Inc. for 2015 and 2016 to answer the following
question.
During 2016, Flora Inc. sold equipment with a cost of $30,000 and accumulated
depreciation of $25,000. A gain of
$3,000 was recognized on the sale of the equipment This was the only equipment sale
during the year.
What was depreciation expense for 2016?
a. $ 9,000
b. $16,000
c. $21,000
d. $30,000
Tulsa Corp. reported the following information for 2015 and 2016.
How much cash was paid for interest during 2016?
a. $11,750
b. $12,250
c. $12,500
d. $12,750
Sunshine Farm Supply
Following are selected data from the financial statements of Sunshine Farm Supply:
Refer to the data for Sunshine Farm Supply.
Which of the following would not result from a vertical analysis of its balance sheet?
a.Accounts receivable increased $22,000 or 36.7% during 2016.
b.Accounts receivable is five times larger than Merchandise inventory in 2016.
c.Accounts receivable is 13.3% of total assets for 2016.
d.Merchandise inventory is 2.7% of total assets for 2016.
Indicate the type of each ratio listed below.
a.Liquidity ratio
b.Solvency ratio
c.Profitability ratio
Profit margin ratio
For each of the following items, indicate whether it would appear on a statement of
cash flows prepared using the Direct method (a) or the Indirect method (b).
a.Direct
b.Indirect
Cash sales
From the following list, select the proper section from the statement of cash flows in
which it would be classified.
a.Operating Activities
b.Investing Activities
c.Financing Activities
Paid a cash dividend on capital stock
Presented below are selected data from the financial statements of Wizard Corp.
Earnings per share is reported on the 2016 income statement as
a. $1.08
b. $1.20
c. $1.29
d. $1.43
Pierce Corp. identified the following data in preparing a bank reconciliation on October
31, 2014.
Bank statement balance $29,600
Pierce’s book balance (before adjustments) ?
Outstanding checks 3,100
NSF checks 300
Service charges 200
Deposits in transit 2,200
Interest earned on checking account 100
How much is Pierce’s adjusted cash balance on October 31, 2014? a. $28,700
b. $29,100
c. $28,300
d. $29,600
For each item listed, select the section of the balance sheet in which the item would be
reported.
a.Current Assets
b.Property. Plant, and Equipment
c.Current Liabilities
d.Long-term Liabilities
e.Stockholders’ Equity
Accounts receivable
Identify which inventory costing method (LIFO or FIFO) achieves the effect listed in
the following items:
a.LIFO
b.FIFO
Prices are rising; profits are higher with this method
The payment of wages to employees is an internal event.
a.True
b.False
Identify which of the following would be recorded as external events, recorded as
internal events, or not recorded.
a.Internal event
b.External event
c.Not recorded
A customer pays its open account.
For the following items Questions 220-227, indicate whether each should be (a)
included or (b) excluded from the line item titled Cash and cash equivalents on the
balance sheet.
a.Included
b.Excluded
Certificate of deposit maturing in 60 days