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Exam 2: A Further Look at Financial Statements

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Question 101

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On a classified balance sheet, short-term investments are classified as

A) an intangible asset.
B) property, plant, and equipment.
C) a current asset.
D) a long-term investment.

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Question 102

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The going concern assumption is that the business will continue in operation long enough to carry out its existing objectives and commitments.

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Question 103

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Use the following data to determine the total dollar amount of assets to be classified as current assets.

Cost constraint weighs the cost that companies incur to provide a type of information against its benefit to financial statement users.

Use the following data to determine the total dollar amount of assets to be classified as current assets.

Which of the following would not be classified as a long-term liability?

Different companies using the same accounting principles is an application of

These are selected account balances on December 31, 2014. $\begin{array} { l r } \text { Land } & \$ 100,000 \\\text { Land (held for future use) } & 150,000 \\\text { Buildings } & 800,000 \\\text { Inventory } & 200,000 \\\text { Equipment } & 450,000 \\\text { Furniture } & 100,000 \\\text { Accumulated Depreciation } & 300,000\end{array}$ What is the total amount of property, plant, and equipment that will appear on the balance sheet?

Which measure would a long-term creditor be least interested in reviewing?

N3 Corporation has assets of $3,000,000, common stock of $780,000, and retained earnings of $475,000. What are the creditors' claims on their assets?

Most companies that follow IFRS present balance sheet (statement of financial position) information in this order.

Which statement about long-term investments is not true?

A measure of profitability is the

Which of the following is not considered an asset?

The operating cycle of a company is the average time that is required to go from cash to

Using the following balance sheet and income statement data, what is the total amount of working capital? $\begin{array}{lrlr}\text { Current assets } & \$ 7,000 & \text { Net income } & \$ 15,000 \\\text { Current liabilities } & 4,000 & \text { Stockholders' equity } & 21,000 \\\text { Average assets } & 44,000 & \text { Total liabilities } & 9,000\\\text { Total assets } \quad 30,000\end{array}$ Average common shares outstanding was 10,000.

Generally accepted accounting principles are rules and practices that are recognized as a general guide for financial reporting purposes.

In order for information to be relevant, it must be reported on a monthly basis.

The use of fair value to report assets

Characteristics associated with faithfully representative accounting information are