There is a standard format in various countries for the statement of financial position.
a. True
b. False
Match the costs that might be included as part of the cost of inventory to the listed
accounting treatment. a. Add to inventory cost
b. Subtract from inventory cost
c. Not an inventory cost
Cost of storing the goods before they are sold to customers
Unfortunately, the bookkeeper notices that two transactions for Patio Publications were
not reflected in the balances of the trial balance: one to record $800 of accrued wages
and salaries to be paid in the next period, and the other was the use of $560 of office
supplies from the supplies on hand. If the Trial Balance column totals are $15,380 prior
to discovering these mistakes, what are the totals of the Trial Balance columns after the
corrections are made?
a. $15,860
b. $15,140
c. $16,740
d. $16,180
Accrued wages is not a current liability.
a. True
b. False
Indicate the type of each ratio listed below.
a. liquidity ratio
b. solvency ratio
c. profitability ratio
Debt-to-equity ratio
Many countries prohibit the use of LIFO for tax or financial reporting purposes.
a. True
b. False
Eversoll Inc. uses the periodic inventory system.
If the June 30th inventory included 45 units from the June 5th purchase and 45 units
from the June 14th purchase, Eversoll’s cost of goods sold for June under the specific
identification method would be
a. $2,263.00
b. $2.373.00
c. $2,945.00
d. $3,626.50
Neville Company issued $100,000 of 6%, 10 year bonds when the market rate of
interest was 5%. The proceeds from this bond issue were $107,732. Using the effective
interest method of amortization, which of the following statements is true? Assume
interest is paid annually.
a. Interest payments to bondholders each period will be $6,464.
b. Interest payments to bondholders each period will be $5,000.
c. Amortization of the premium for the first interest period will be $1,226.
d. Amortization of the premium for the first interest period will be $613.
Depreciation is
a. an effort to achieve proper matching of the cost of operating assets.
b. an accumulation of funds to replace the related plant asset.
c. the difference between the original cost and salvage value of an asset.
d. the cash allocated each period to maintain a plant asset.
A decrease in deferred taxes (liability) would appear on the statement of cash flows,
prepared using the indirect method as a(n)
a. addition to net income in the operating activities category.
b. deduction to net income in the operating activities category.
c. inflow of cash in the financing activities category.
d. outflow of cash in the financing activities category.
What would be at least three reasons for a decrease in inventory turnover? Explain.
Lear Flower Shop presented the stockholders’ equity section of its balance sheet on
January 1, 2015, as follows:
All common shares were originally sold for $6 each. The following transactions
occurred during 2015: -Reacquired 3,000 shares of common stock at $15 per share on
February 16 -Sold 2,000 shares of treasury stock at $20 per share on June 1 Part 1 Show
the effects of the transactions on the accounting equation
Part 2How many shares of stock are outstanding at June 1, immediately after the sale of
the 2,000 shares of treasury stock?
Theratio indicates the company’s ability to meet the current year’s interest payments out
of the current year’s earnings.
List the names of three companies with which you are familiar that are manufacturers
or producers. Also list the names of three companies that are retailers. Finally, provide
the names of three service providers.
Complete the following work sheet for Residential Enterprises. Residential
Enterprises
Worksheet
For the Year Ended December 31, 2014
At December 31, 2016, Corning Company has the following:
Common Stock, $10 par, 10,000 shares authorized, 9,000 issued, 8,000 outstanding
Preferred Stock, $100 par, 8%, cumulative, 1,000 shares authorized, issued, and
outstanding
The company did not pay any dividend during 2015 or 2014.REQUIRED:Compute the
amount of dividend to be received by the common and preferred stockholders in 2016 if
the company declared a dividend of $60,000.
What is conservatism and why is it important in accounting?