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WorksheetsACCT 5307
Total questions: 15
Worksheet time: 8mins
The acquisition of equity and debt financing is considered:
a financing activity
net income
an investing activity
an operating activitgy
Which of the following is considered an operating activity?
payment to a vendor for supplies
purchase of company trucks for cash.
payment of dividends to shareholders
issuing stock to invest in.
A statement that “the financial statements were prepared in accordance with generally accepted accounting principles” is found in the
collateral
stock market
footnotes to the balance sheet
auditor's report
A statement that financial statement information “is the responsibility of company” issuing the statements is found in the
The footnotes of the financial statements
loan contract
management letter
The board of directors’ report
Which one of the following statements best describes objectivity?
When uncertainty exists, understating assets, overstating liabilities, accelerating recognition of losses, and delaying recognition of gains are preferred.
The measurement of an event is verifiable and reliable.
Different firms use identical accounting measurement methods for similar events.
Objectives are laid out that are conservative or too aggressive by management.
Which one of the following is violated when a company recognizes revenue upon the receipt of cash from a customer who has paid in advance for services?
Expense Policy
Objectivity
Matching
Revenue recognition Criteria
Expensing the cost of a pencil holder that cost $1.25 instead of capitalizing it as a plant asset and depreciating it over its estimated useful life of 10 years:
violates the economic entity assumption.
violates GAAP since pencil holders are important assets.
is justified because of materiality.
This is appropriate because of the stable dollar assumption.
The purpose of recording depreciation expense is to:
provide cash necessary to replace plant assets when they are used up.
record the balance sheet amount of plant assets at replacement value.
match expenses with revenues using a reasonable systematic method.
gain a better understanding of estimating the extraction of natural resources.
If the current ratio is currently greater than 1.0, which one of the following events would increase the current ratio?
Purchase of inventory on account
Receipt of money from a customer prior to the performance of service
Warranty expense is accrued.
Sale of plant asset at a gain
Current assets are assets which
. can be used immediately to retire liabilities.
are newly acquired.
have been converted into cash in the previous year.
are intended to be converted into cash within one year.
The liability arising from the purchase of goods or services on credit is called:
Creditor
Accounts Payable
Loan
Accounts Receivable
Current liabilities are debts that have to be paid ________
in the next 12 months
in order to buy a current asset
in the next 5 years or more
to buy more working capital
The term _________ describes how efficiently an asset can be converted into
Liquidity
Solvency
Conversion rate
Working capital cycle
Show answersExplanationPreviousNext
On which financial statement would you expect to find Allowance for Doubtful Accounts?
Balance Sheet
Income Statement
The financial information provided by an accounting system is needed by:
Owners
Creditors
Management
All of these
