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Exam 2: Financial Statements and the Annual Report

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Question 81

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Which one of the following is an operating activity of a business?

A) Paying for purchases of inventory
B) Issuing stock for cash
C) Borrowing money from a bank
D) Purchasing a manufacturing plant

E) A) and D)
F) A) and C)

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Question 82

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Guinther & Sons, Inc. Guinther & Sons, Inc.a retailer of men's clothing, earned a net profit of $77,000 for 2014.The balance sheet for Guinther & Sons includes the following items: -Read the information for Guinther & Sons, Inc.Calculate the current ratio for Guinther & Sons.

A) 2.58 to 1
B) 2.75 to 1
C) 3.00 to 1
D) 2.00 to 1

E) None of the above
F) B) and D)

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Question 83

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A balance sheet shows cash, $75,000; marketable securities, $115,000; accounts receivable, $150,000 and $222,500 of inventories.Current liabilities are $225,000.The current ratio is 2.5 to 1.

Madden Company applies the consistency convention.What does this mean?

Which one of the following items is reported as a current asset on a classified balance sheet?

Bartlett Industries Bartlett Industries began operations on January 2, 2015, with an investment of $50,000 by each of its two stockholders.Net income for its first year of business was $240,000.Bartlett Industries paid a total of $100,000 in dividends to its stockholders during the year. -Read the information about Bartlett Industries.If the company's revenues were $500,000 for the year ended December 31, 2015, how much were total expenses?

are cash and other assets that are reasonably expected to be realized in cash during the normal operating cycle of the business.

Which of the following statements is true concerning external users of financial information?

The Financial Accounting Standards Board created the objectives of financial reporting.

Skyline, Inc. The balance sheet of Skyline Inc.includes the following items: -Read the information about Skyline, Inc.What is Skyline's working capital?

Which of the following would appear on a multiple-step income statement but not on a single-step income statement?

Which of the following items will be found in a corporate annual report?

One significant difference between a classified and a non-classified balance sheet is the distinction between which of the following items?

Most businesses have an operating cycle of less than one year.

If an investor can use accounting information for two different companies to evaluate the types and amounts of expenses, the information is said to have the quality of

Income from operations does not include interest revenue and interest expense because these items are considered to be non-operating in nature.

is the quality of accounting information that allows a user to analyze two or more companies and look for similarities and differences.