ACG Chapter 2 – Flashcards

Which of the following is a constraint in accounting?

The periodicity assumption states

The principle that indicates that assets should be reported at the price received to sell an asset is the

The net cash inflow from operating activities is $140,000; cash received from issuing stock is $75,000; cash paid for capital expenditures is $60,000; cash paid for bonds held as an investment is $20,000; and dividends paid are $20,000. How much is free cash flow?

Which of the following is the correct order for listing assets on the balance sheet?

Bombay Corporation had $48,000 at the beginning of the year and it had cash disbursements of $21,000 during the year. At the end of the year, Bombay Company had $51,000. What was Bombay Corporation's cash receipts for the year?

What is the primary criterion by which accounting information can be judged?

Which of the following is an example of an intangible asset?

A company purchased a tract of land on which it expects to build a factory in approximately five years. During the five years before construction, the land will be idle. In what classification should the land be reported?

Which of the following describes a company's ability to pay its obligations that are expected to become due within the next year or operating cycle whichever is longer?

How does a company compute its free cash flow?

Clawson Corporation has current assets of $3,750,000 and current liabilities of 2,050,000. If Clawson Corporation pays $500,000 of its accounts payable what will the new current ratio be?

Net income is $200,000, preferred dividends are $20,000, and average common shares outstanding are 50,000. How much is earnings per share?

At the end of the year, Green Company had retained earnings of $2,640,000. During the year, the company issued stock for $120,000 and paid dividends of $25,000. Net income for the year was $412,000. How much was the retained earnings balance at the beginning of the same year?

Jose Inc. reports the following balances and amounts. The following information is presented in random order (amounts are in dollars). Accounts payable, 35,000 Cash provided by operations, 90,000 Accounts receivable, 37,500 Net income, 36,000 Average common shares, 20,000 Salaries and wages payable, 8,000 Average current liabilities, 110,000 Stockholders' equity, 240,000 Average and total assets, 600,000 Total current assets, 300,000 Average total liabilities, 320,000 Total current liabilities, 120,000 Cash, 100,000 How much is its current ratio?

Jose Inc. reports the following balances and amounts. The following information is presented in random order (amounts are in dollars). Accounts payable, 35,000 Cash provided by operations, 90,000 Accounts receivable, 37,500 Net income, 36,000 Average common shares, 20,000 Salaries and wages payable, 8,000 Average current liabilities, 110,000 Stockholders' equity, 240,000 Average and total assets, 600,000 Total current assets, 300,000 Average total liabilities, 320,000 Total current liabilities, 120,000 Cash, 100,000 How much is its working capital?

Which financial statement is used by most corporations instead of the retained earnings statement?

Which of the following is an indicator of profitability?

Pilgrim Corporation reports the following on its financial statements. Cash paid for new equipment, $30,000 Cash collected from customers, $100,000 Paid a note payable, $5,000 Cash collected in exchange for issuing additional shares of Pilgrim stock to stockholders, $15,000 Cash dividends paid, $25,000 The company reports $75,000 of net income for the year and it has $90,000 of cash at year-end. What is the company's free cash flow?

The following ratios are available for Rock Inc. and Pebble Inc. Rock Inc. Pebble Inc. Current Ratio 1.8 1.6 Compared to Rock Inc., Pebble Inc. has

A ratio summarizes the relation between selected items. Financial statement analysis (i.e., ratio analysis) focuses on the relation between certain financial statement data, such as earnings and the number of shares of common stock (i.e., earnings per share or EPS). A ratio by itself is not particularly useful. Rather, ratios tend to be compared to standards. Which of the following is a comparison facilitated by ratios when conducting a financial statement analysis (i.e., ratio analysis)?

Earnings per share is computed by dividing

For a given company, total assets are $150,000, current liabilities are $10,000, long-term liabilities are $20,000, common stock is $50,000, and retained earnings is $70,000. How much is total stockholders' equity?

What are generally accepted accounting principles?

What is the primary accounting standard-setting body in the United States?

Riverview Inc. reports the following balances and amounts. The following information is presented in random order. Accounts payable, $50,000 Cash provided by operations, 100,000 Accounts receivable, 35,000 Net income, 40,000 Average common shares, 15,000 Salaries and wages payable, 40,000 Average current liabilities, 225,000 Stockholders' equity, 200,000 Average total assets, 600,000 Current assets, 300,000 Average total liabilities, 320,000 Current liabilities, 250,000 Dividends paid to preferred shareholders, 5,000 How much is earnings per share?

Accounting information is relevant to business decisions because it

A company using the same accounting principles and the same accounting methods from one year to the next year is an application or example of

Accounting information should be neutral in order to enhance