| Question 1 | 5 / 5 points |
Which of the following statements is FALSE?
Question options:
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| Common-size balance sheets allow for comparison of firms with different levels of total assets by introducing a common denominator. | ||
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| The common-size balance sheet reveals the composition of assets within major categories. | ||
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| Each item on a common-size balance sheet is expressed as a percentage of sales. | ||
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| The common-size balance sheet reveals the capital and the debt structure of the firm. | ||
| Question 2 | 5 / 5 points | ||
Companies that use IFRS may switch the order of presentation of __________, listing noncurrent items before current items.
Question options:
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| assets and liabilities | ||
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| liabilities and owner's equity | ||
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| assets and owner's equity | ||
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| owner's equity only | ||
| Question 3 | 5 / 5 points | ||
Temporary differences are a result of recording revenues or expenses on financial statements in an accounting period __________ when these items are recorded on the firm's tax return.
Question options:
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| before the time | ||
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| after the time | ||
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| the same as | ||
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| different from | ||
| Question 4 | 5 / 5 points | ||
A __________ expresses each item on the balance sheet as a percentage of total assets.
Question options:
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| ratio balance sheet | ||
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| common-size balance sheet | ||
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| relative balance sheet | ||
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| usual and customary | ||
| Question 5 | 5 / 5 points | ||
__________ are those assets expected to be converted into cash within one year or operating cycle, whichever is longer.
Question options:
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| Marketable securities | ||
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| Future assets | ||
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| Current assets | ||
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| Short-lived | ||
| Question 6 | 5 / 5 points | ||
The valuation of marketable securities on the balance sheet requires the separation of investment securities into three categories:
Question options:
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| held to maturity, negotiable securities, and securities available for sale. | ||
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| held to maturity, negotiable securities, and securities available for purchase. | ||
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| held to maturity, trading securities, and securities available for purchase. | ||
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| held to maturity, trading securities, and securities available for sale. | ||
| Question 7 | 5 / 5 points | ||
Which of the following statements is true?
Question options:
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| The straight-line method of depreciation allocates a decreasing amount of depreciation expense each year. | ||
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| Straight-line depreciation is the least used method for financial reporting purposes. | ||
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| Fixed assets are reported at historical cost less accumulated depreciation on the balance sheet. | ||
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| The total amount of depreciation over the asset's life is larger when using an accelerated method of depreciation. | ||
| Question 8 | 5 / 5 points | ||
Companies that are paid in advance for services or products record a(n) __________ on the receipt of cash referred to as unearned revenue or deferred credits.
Question options:
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| liability | ||
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| receivable | ||
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| asset | ||
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| accrued asset | ||
| Question 9 | 5 / 5 points | ||
Which item below does NOT describe a balance sheet?
Question options:
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| Assets = Liabilities + Stockholders' Equity | ||
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| Financial position at a point in time | ||
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| Assets – Liabilities = Stockholders' Equity | ||
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| Assets + Liabilities = Stockholders' Equity | ||
| Question 10 | 5 / 5 points | ||
Use the information below to answer the following question.
ABC Company purchases five products for sale in the order and at the costs shown below
| Unit | Cost per Unit |
| 1 | $10 |
| 2 | $12 |
| 3 | $15 |
| 4 | $18 |
| 5 | $13 |
Assume ABC sells two items and uses the LIFO method of inventory valuation. What amount would appear for cost of goods sold on the income statement?
Question options:
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| $37 | ||
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| $41 | ||
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| $22 | ||
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| $31 | ||
| Question 11 | 5 / 5 points | ||
__________ are also referred to as short-term investments.
Question options:
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| Real estate | ||
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| Annuities | ||
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| Non-term life insurance | ||
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| Marketable securities | ||
| Question 12 | 5 / 5 points | ||
The net realizable value of accounts receivable is the actual amount of the account less an allowance for __________ accounts.
Question options:
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| future | ||
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| questionable | ||
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| unknown | ||
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| doubtful | ||
| Question 13 | 5 / 5 points | ||
Assume the following purchases of inventory for ABC Company and use this information to answer the following question.
| Purchase # | Purchase Price |
| 1 | $3 |
| 2 | $4 |
| 3 | $5 |
| 4 | $6 |
| 5 | $7 |
Assume ABC uses the average cost method of inventory valuation. What unit cost would be used to determine the amount in ending inventory or cost of goods sold?
Question options:
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| $3 | ||
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| $5 | ||
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| $7 | ||
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| $25 | ||
| Question 14 | 0 / 5 points | ||
Most manufacturing firms use the accelerated depreciation method and retailers use the __________ method for financial reporting purposes.
Question options:
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| reverse accelerated depreciation | ||
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| accelerated depreciation (also) (Incorrect) | ||
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| straight-line depreciation | ||
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| incremental depreciation | ||
| Question 15 | 5 / 5 points | ||
Which item below would NOT be a quality of financial reporting issue related to the balance sheet?
Question options:
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| Mismatching the type of debt (short or long-term) used to finance assets | ||
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| Discretionary expenses | ||
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| Overvaluation of assets | ||
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| Off-balance sheet financing | ||
| Question 16 | 5 / 5 points | ||
The balance sheet is also called the:
Question options:
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| statement of future. | ||
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| statement of welfare. | ||
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| statement of condition. | ||
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| statement of potential position. | ||
| Question 17 | 5 / 5 points | ||
A (n) __________ balance sheet means that the asset and liability sections are categorized into key areas.
Question options:
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| classified | ||
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| systematic | ||
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| organized | ||
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| legend | ||
| Question 18 | 5 / 5 points | ||
A common-size balance sheet is useful to the analyst because it facilitates the __________ analysis of the firm.
Question options:
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| functional | ||
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| structural | ||
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| operational | ||
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| cost | ||
| Question 19 | 5 / 5 points | ||
Additional information helpful to the analysis of accounts receivable and the allowance account is provided in the schedule of:
Question options:
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| deductions accounts. | ||
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| valuation and qualifying accounts. | ||
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| additions to costs and expenses accounts. | ||
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| allowance for unknown accounts. | ||
| Question 20 | 5 / 5 points | ||
Which of the following accounts could be categorized as either a current or noncurrent liability depending on date the debt is due?
Question options:
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| Notes payable and deferred taxes |
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| Accounts payable and current portion of long-term debt |
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| Deferred taxes and mortgages due in 30 years |
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| Long-term warranties and accounts payable |
