A decrease in receivables turnover ratio is indicative of:
A) an increase in sales revenue.
B) slower-selling inventory.
C) an increase in accounts receivable.
D) a decline in cost of goods sold.
Which of the following ratios is a solvency ratio?
A) Net profit margin ratio
B) Current ratio
C) Fixed asset turnover ratio
D) Debt-to-assets ratio
Match the acronym with the description that best reflects it. (There are more
descriptions than acronyms.)
ACRONYM
1) _____ SEC
2)_____ GAAP
3)_____ PCAOB
4)_____ FASB
5)_____ IASB
6) _____ SOX
7)_____ AICPA
DESCRIPTION
A. The Board that establishes international accounting standards.
B. This organization regulates activities associated with the stock market such as the
reporting of financial data by publicly owned companies.
C. The U.S. agency that must approve mergers between very large publicly owned
corporations.
D. The national professional organization of accountants.
E. A set of laws established to strengthen corporate reporting in the United States.
F. The U.S. Board that approves the rules for auditing publicly owned companies.
G. Rules of financial accounting created by the FASB for use in the United States.
H. The organization that establishes business laws in the U.S.
I. The U.S. agency that certifies foreign accounting firms to practice in the U.S.
J. The Board that establishes the accounting rules that govern American publicly owned
corporations.
All of the accounts of the Grass is Greener Company have been adjusted as of
December 31, 2016, with the exception of income taxes incurred but not yet recorded.
Those account balances appear below. All have normal balances. The estimated income
tax rate for the company is 40%.
Required:
Part a. Calculate the income before income tax.
Part b. Calculate the income tax expense.
Part c. Calculate the net income.
Use the information above to answer the following question. Which one of the
following statements regarding the balance sheet for Anonymous Inc. is correct?
A) Retained Earnings is misclassified; it should be reported in the Assets section of the
balance sheet.
B) The $207,100 shown as Retained Earnings on the balance sheet represents the
cumulative amount of dividends distributed.
C) Anonymous, Inc. is owed $310,500 from customers who have purchased goods or
services from the company, but have not yet paid for them.
D) The amount of retained earnings reported on this balance sheet represents the
retained earnings at the beginning of the year.
Which of the following must be paid by both the employee and the employer?
A) FICA taxes
B) State unemployment tax
C) State withholding tax
D) Federal unemployment tax
The owner(s) of a business are taxed on the profits of the business if the business is a:
A) sole proprietorship.
B) partnership.
C) corporation.
D) public partnership.
A company’s balance sheet contained the following information:
Notes Payable is the only other item on the balance sheet. Notes Payable must equal:
A) $200,000.
B) $8,000.
C) $72,000.
D) $344,000.
Which of the following is not correct?
A) Assets = Liabilities + Stockholders’ Equity
B) Liabilities = Assets – Stockholders’ Equity
C) Stockholders’ Equity + Liabilities – Assets = 0
D) Assets = Liabilities – Stockholders’ Equity
Which of the following statements about depreciation methods is not correct?
A) The amount of depreciation expense recorded in each year of an asset’s life depends
on the method that is used.
B) Different depreciation methods can be used for different classes of assets provided
the methods are used consistently over time so that financial statement users can
compare results across periods.
C) At the end of an asset’s life, after it has been fully depreciated, the total amount of
depreciation will equal the asset’s depreciable cost.
D) The amount of net income reported each year will be the same regardless of the
depreciation method used.