Question 1

Which of the following circumstances would require recording an accrual for a loss contingency under current generally accepted accounting principles?

Accepted Answer

A)   Event is unusual in nature and occurrence of event is probable
B)   Event is unusual in nature and event occurs infrequently
C)   Amount of loss is reasonably estimable and occurrence of event is probable
D)   Amount of loss is reasonably estimable and event occurs infrequently

Question 2

Berton Company reported assets totaling $870,000 as of December 31, 2011. The following information relates to those assets:
  
After considering the items above, what should be the total of Berton's reported assets?

Accepted Answer

The answer of Berton Company reported assets totaling $870,000 as...

Question 3

Which of the following items is usually classified as a noncurrent asset?

Accepted Answer

A)   Plant expansion fund
B)   Prepaid rent
C)   Supplies
D)   Goods that are in the process of being completed for another company

Question 4

Information from Blain Company's balance sheet is as follows:

What is Blain's quick (acid-test)  ratio?

Accepted Answer

A)   0.26 to 1
B)   0.30 to 1
C)   1.80 to 1
D)   3.60 to 1

Question 5

Pending litigation would generally be considered a(n)

Accepted Answer

A)   nonmonetary liability.
B)   contingent liability.
C)   estimated liability.
D)   current liability.

Question 6

The following information pertains to Heiner Company on December 31, 2011:
  
Required:
Prepare the property, plant, and equipment section of Heiner Company's balance sheet on December 31, 2011.

Accepted Answer

The answer of The following information pertains to Heiner Company...

Question 7

Which of the following would not be reported for capital stock in the contributed capital section of a classified balance sheet?

Accepted Answer

A)   Dividends per share
B)   Shares authorized
C)   Shares issued
D)   Shares outstanding

Question 8

Which of the following characteristics may result in the classification of a liability being changed from current to noncurrent?

Accepted Answer

A)   Violation of a subjective acceleration clause
B)   Violation of an objective acceleration clause
C)   A demand provision for payment
D)   Refinancing after the balance sheet date

Question 9

The accounts and balances shown below were gathered from Paynter Corporation's trial balance on December 31, 2011. All adjusting entries have been made.

See information for Paynter Corporation above. Paynter Corporation's working capital is

Accepted Answer

A)   $62,500.
B)   $73,100.
C)   $77,700.
D)   $125,700.

Question 10

Balance sheet analysis is useful in assessing a firm's liquidity, which is the ability to

Accepted Answer

A)   satisfy short-term obligations.
B)   main profitable operations.
C)   maintain past levels of preferred and common dividends.
D)   survive a major economic downturn.

Question 11

Which of the following would not be reported in the stockholders' equity section of the balance sheet?

Accepted Answer

A)   Retained earnings appropriated for future plant expansion
B)   Dividends declared on preferred stock
C)   Paid-in capital in excess of par value
D)   Deficit in retained earnings

Question 12

The December 31, 2011, balance sheet of Madden Inc., reported total assets of $1,050,000 and total liabilities of $680,000. The following information relates to the year 2012:

The stockholders' equity section of the December 31, 2012, balance sheet would report a balance of

Accepted Answer

A)   $400,000.
B)   $525,000.
C)   $685,000.
D)   $835,000.

Question 13

Mejarus Co.'s adjusted trial balance at December 31, 2011, includes the following account balances:

What amount should Mejarus report as total stockholders' equity in its December 31, 2011, balance sheet?

Accepted Answer

A)   $1,008,000
B)   $1,032,000
C)   $1,068,000
D)   $1,092,000

Question 14

The following data were taken from the financial statements of Jensen Corporation for the year ended December 31, 2011:

What was Jensen's rate of return on assets for 2011?

Accepted Answer

A)   5 percent
B)   6 percent
C)   20 percent
D)   24 percent

Question 15

Accrued revenues would normally appear on the balance sheet as

Accepted Answer

A)   plant assets.
B)   current liabilities.
C)   long-term liabilities.
D)   current assets.

Question 16

In a consolidated balance sheet, the minority interest is reported

Accepted Answer

A)   as part of long-term liabilities.
B)   between liabilities and stockholders' equity
C)   as part of stockholders' equity.
D)   as part of long-term assets.

Question 17

Investment securities held for the purpose of retiring bonds should be classified on a balance sheet as

Accepted Answer

A)   current assets.
B)   investments.
C)   deferred bond liability.
D)   intangible assets.

Question 18

The correct order to present current assets is

Accepted Answer

A)   cash, inventories, prepaid items, accounts receivable.
B)   cash, inventories, accounts receivable, prepaid items.
C)   cash, accounts receivable, prepaid items, inventories.
D)   cash, accounts receivable, inventories, prepaid items.

Question 19

Lobo Co. was incorporated on July 1, 2011, with $200,000 from the issuance of stock and borrowed funds of $30,000. During the first year of operations, net income was $10,000. On December 15, Lobo paid an $800 cash dividend. No additional activities affected owners' equity in 2011. At December 31, 2011, Lobo's liabilities had increased to $37,600. In Lobo's December 31, 2011, balance sheet, total assets should be reported at

Accepted Answer

A)   $239,200.
B)   $240,000.
C)   $246,800.
D)   $276,800.

Question 20

For a liability to exist,

Accepted Answer

A)   there must be a past transaction or event.
B)   the exact amount must be known.
C)   the identity of the party to whom the liability is owed must be known.
D)   there must be an obligation to pay cash in the future.

Exam 3: The Balance Sheet and Notes to the Financial Statements

Which of the following would not be reported in the stockholders' equity section of the balance sheet?

Correct Answer
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Correct Answer
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Which of the following items is usually classified as a noncurrent asset?

Correct Answer
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Which of the following circumstances would require recording an accrual for a loss contingency under current generally accepted accounting principles?

Correct Answer
verified

Balance sheet analysis is useful in assessing a firm's liquidity, which is the ability to

Correct Answer
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Information from Blain Company's balance sheet is as follows: What is Blain's quick (acid-test) ratio?

Correct Answer
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In a consolidated balance sheet, the minority interest is reported

Correct Answer
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The December 31, 2011, balance sheet of Madden Inc., reported total assets of $1,050,000 and total liabilities of $680,000. The following information relates to the year 2012: The stockholders' equity section of the December 31, 2012, balance sheet would report a balance of

Correct Answer
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The correct order to present current assets is

Correct Answer
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Which of the following characteristics may result in the classification of a liability being changed from current to noncurrent?

Correct Answer
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Mejarus Co.'s adjusted trial balance at December 31, 2011, includes the following account balances: What amount should Mejarus report as total stockholders' equity in its December 31, 2011, balance sheet?

Correct Answer
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Pending litigation would generally be considered a(n)

Correct Answer
verified

Berton Company reported assets totaling $870,000 as of December 31, 2011. The following information relates to those assets: After considering the items above, what should be the total of Berton's reported assets?

Correct Answer
verified

Investment securities held for the purpose of retiring bonds should be classified on a balance sheet as

Correct Answer
verified

Accrued revenues would normally appear on the balance sheet as

Correct Answer
verified

The following data were taken from the financial statements of Jensen Corporation for the year ended December 31, 2011: What was Jensen's rate of return on assets for 2011?

Correct Answer
verified

The accounts and balances shown below were gathered from Paynter Corporation's trial balance on December 31, 2011. All adjusting entries have been made. See information for Paynter Corporation above. Paynter Corporation's working capital is

Correct Answer
verified

Which of the following would not be reported for capital stock in the contributed capital section of a classified balance sheet?

Correct Answer
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The following information pertains to Heiner Company on December 31, 2011: Required: Prepare the property, plant, and equipment section of Heiner Company's balance sheet on December 31, 2011.

Correct Answer
verified

For a liability to exist,

Correct Answer
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Exam 3: The Balance Sheet and Notes to the Financial Statements

Which of the following would not be reported in the stockholders' equity section of the balance sheet?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following items is usually classified as a noncurrent asset?

Correct AnswerverifiedShow Answer

Which of the following circumstances would require recording an accrual for a loss contingency under current generally accepted accounting principles?

Correct AnswerverifiedShow Answer

Balance sheet analysis is useful in assessing a firm's liquidity, which is the ability to

Correct AnswerverifiedShow Answer

Information from Blain Company's balance sheet is as follows: What is Blain's quick (acid-test) ratio?

Correct AnswerverifiedShow Answer

In a consolidated balance sheet, the minority interest is reported

Correct AnswerverifiedShow Answer

The December 31, 2011, balance sheet of Madden Inc., reported total assets of $1,050,000 and total liabilities of $680,000. The following information relates to the year 2012: The stockholders' equity section of the December 31, 2012, balance sheet would report a balance of

Correct AnswerverifiedShow Answer

The correct order to present current assets is

Correct AnswerverifiedShow Answer

Which of the following characteristics may result in the classification of a liability being changed from current to noncurrent?

Correct AnswerverifiedShow Answer

Mejarus Co.'s adjusted trial balance at December 31, 2011, includes the following account balances: What amount should Mejarus report as total stockholders' equity in its December 31, 2011, balance sheet?

Correct AnswerverifiedShow Answer

Pending litigation would generally be considered a(n)

Correct AnswerverifiedShow Answer

Berton Company reported assets totaling $870,000 as of December 31, 2011. The following information relates to those assets: After considering the items above, what should be the total of Berton's reported assets?

Correct AnswerverifiedShow Answer

Investment securities held for the purpose of retiring bonds should be classified on a balance sheet as

Correct AnswerverifiedShow Answer

Accrued revenues would normally appear on the balance sheet as

Correct AnswerverifiedShow Answer

The following data were taken from the financial statements of Jensen Corporation for the year ended December 31, 2011: What was Jensen's rate of return on assets for 2011?

Correct AnswerverifiedShow Answer

The accounts and balances shown below were gathered from Paynter Corporation's trial balance on December 31, 2011. All adjusting entries have been made. See information for Paynter Corporation above. Paynter Corporation's working capital is

Correct AnswerverifiedShow Answer

Which of the following would not be reported for capital stock in the contributed capital section of a classified balance sheet?

Correct AnswerverifiedShow Answer

The following information pertains to Heiner Company on December 31, 2011: Required: Prepare the property, plant, and equipment section of Heiner Company's balance sheet on December 31, 2011.

Correct AnswerverifiedShow Answer

For a liability to exist,

Correct AnswerverifiedShow Answer

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