question

Free cash flow is net cash provided by operating activities less capital expenditures.

answer

False

question

If a building if offered for sale at $100,000 and the buyer pays $95,000 cash for it, the buyer would record the building at $100,000.

answer

False

question

Mitchell Corporation has current assets of $1,600,000 million and current liabilities of $750,000. If they pay $250,000 of their accounts payable what will their new current ratio be?

answer

2.7:1

question

Liabilities are generally classified on a balance sheet as

answer

current liabilities and long-term liabilities.

question

Stockholders' equity is divided into two parts: common stock and retained earnings.

answer

True

question

Which of the following statements is true?

answer

By comparing earning per share of a single corporation over time, a stockholder can evaluate the corporation's relative earnings performance.

question

At December 31,2014 Lowery Company had retained earnings of $2,384,000. During 2014 they issued stock for $98,000, and paid dividends of $34,000. Net income for 2014 was $402,000. The retained earnings balance at the beginning of 2014 was

answer

$2,016,000.

question

Current assets divided by current liabilities is known as the

answer

current ratio

question

The debt to assets ratio measures the percentage of asset financed by creditors.

answer

True

question

For 2014 Kuhlman Corporation reported net income of #28,000; net sales $400,000; and average share outstanding 16,000. There were no preferred dividends. What was the 2014 earnings per share?

answer

$1.75

question

Long-term creditors are usually most interested in evaluating

answer

liquidity and solvency

question

Earnings available to common stockholders is equal to

answer

net income - preferred dividends

question

In the statement of cash flows, Net cash provided by operating activities indicates the cash-generating capability of the company.

answer

True

question

The following information is available for Cooke Corporation: Cash Receipts from operating activities $980 Cash payments from operating activities $240 Net cash used by investing $210 Net cash provided by financing $750 Net increase in cash and equivalents ? Cash and equivalents at start of year $550 Cash an equivalents at year-end ? What is the cash and equivalents amount at year-end?

answer

$1,830 ($980 − $240 − $210 + $750 + $550 = $1,830)

question

The advantage of accounting information is that it provides exact and completely reliable measures.

answer

False

question

Long-term creditors consider a high free cash flow amount an indication of solvency.

answer

True

question

A company using the same accounting principles from year to year is an application of

answer

consistency

question

Dawson company has the following information available for 2014: Issued common stock $45 Retired common stock $65 Paid dividends $75 Net income $130 Beginning common stock balance $625 Beginning retained earnings balance $475 Based on this information, what is Dawson's Common Stock balance at the end of the year?

answer

$605 ($625 + $45 − $65 = $605)

question

For 2014 Fielder Corporation reported net income of $30,000; net sales $400,000; and average share outstanding $16,000. There were no preferred dividends. What was the 2014 earnings per share?

answer

$1.88 [($30,000 − 0) ÷ 16,000 = $1.88]

question

Using the following balance sheet and income statement data, what is the debt to assets ratio?

answer

30 percent

question

For accounting information to have relevance, it must be

answer

timely

question

Long-term investments appear in the property, plant, and equipment section of the balance sheet.

answer

False

question

Ratios that measure the income or operating success of a company for a given period of time are

answer

profitability ratios

question

Which of the following is not a current liability?

answer

bonds payable

question

Under IFRS

answer

companies can apply fair value to property, plant, and equipment and natural resources.

question

Working capital is calculated by taking

answer

current assets minus current liabilities.

question

Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment.

answer

$376,000 ($190,000 + $186,000 = $376,000)

question

Using the following balance sheet and income statement data, what is the earnings per share? (img: https://learn.unm.edu/courses/1/XLSVXEBG201610/ppg/respondus/pool_C2_EQ/ch02_133a.jpg)

answer

$1.50

question

The current ratio takes into account the composition of current assets.

answer

False

question

Liabilities are generally classified on a balance sheet as

answer

current liabilities and long-term liabilities

question

Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting period.

answer

true

question

Using the following balance sheet and income statement data, what is the debt to assets ratio? https://learn.unm.edu/courses/1/XLSVXEBG201610/ppg/respondus/pool_C2_EQ/ch02_132a.jpg

answer

35 percent ($21,000 ÷ $60,000 = $35)

question

Use the following data to calculate the current ratio. https://learn.unm.edu/courses/1/XLSVXEBG201610/ppg/respondus/pool_C2_EQ/ch02_84.jpg

answer

2.60:1 ($35,000 + $50,000 + $70,000 + $40,000) ÷ ($65,000 + $10,000) = $2.60:1

question

Solvency ratios measure the short-term ability of the company to pay its maturing obligations.

answer

False

question

The going concern assumption assumes that the business

answer

will remain in operation for the foreseeable future.

question

The monetary unit assumption has led to an increase in the notes to financial statements.

answer

False

question

Valuing assets at their fair value rather than at their cost is inconsistent with the

answer

historical cost principle

question

Garrison Company prepares quarterly reports, which it distributes to all stockholders and other entities that rely on its accounting information. Which of the following is the best term for the key assumption in financial reporting that Garrison is following?

answer

Periodicity assumption.

question

Jackson Cement Corporation reported $35 million for sales when it only had $20 million of actual sales. Which of the following qualities of useful information has Jackson most likely violated?

answer

faithful representation

question

These are selected account balances on December 31, 2014. https://learn.unm.edu/courses/1/XLSVXEBG201610/ppg/respondus/pool_C2_EQ/ch02_72.jpg What is the total amount of property, plant, and equipment that will appear on the balance sheet?

answer

$1,150,000 ($100,000 + $800,000 + $450,000 + $100,000 − $300,000 = $1,150,000)

question

Use the following data to calculate the current ratio. https://learn.unm.edu/courses/1/XLSVXEBG201610/ppg/respondus/pool_C2_EQ/ch02_91.jpg

answer

2.80:1 ($84,000 + $80,000 + $140,000 + $60,000) ÷ ($110,000 + $20,000) = 2.80:1

question

The TNT Company has five plants nationwide that cost $300 million. The current fair value of the plants is $500 million. The plants will be reported as assets at

answer

$300 million

question

Wilton Corporation had beginning retained earnings of $724,000 and ending retained earnings of $833,000. During the year they issued common stock totaling $47,000. No dividends were paid. What was Wilton's net income for the year?

answer

$109,000

question

Use the following data to determine the total dollar amount of assets to be classified as current assets. Koonce Office Supplies https://learn.unm.edu/courses/1/XLSVXEBG201610/ppg/respondus/pool_C2_EQ/ch02_q75.jpg

answer

$400,000 ($130,000 + $100,000 + $110,000 + $60,000 = $400,000)

question

If Morris Corporation has a negative $131 million free cash flow, which of the following statements is most likely true?

answer

Morris' cash provided by operations is less than its cash dividends plus capital expenditures.

question

The convention of consistency pertains to the use of the same accounting principles by firms in the same industry.

answer

False

question

Use the following data to determine the total dollar amount of assets to be classified as investments. Eddy Auto Supplies https://learn.unm.edu/courses/1/XLSVXEBG201610/ppg/respondus/pool_C2_EQ/ch02_89.jpg

answer

$170,000

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