Question 1

Accumulated depreciation represents:

Accepted Answer

A)   depreciation yet to be deducted for tax purposes.
B)   depreciation yet to be deducted for book purposes.
C)   depreciation that has been deducted for tax purposes.
D)   depreciation that has been deducted for book purposes.E) None of the above
F) C) and D)

Question 2

Taxes that the company reasonably expects to pay in the future are called deferred tax liabilities.

Accepted Answer

A) True 
 B)False  True

Question 3

Three years ago ABC Company paid $4,500 for a new copier, which would cost $6,000 to replace today. If it is on the books at $4,500 this would be an example of using historical cost.

Accepted Answer

A) True 
 B)False

Question 4

If a company has gains in its marketable securities, it would most likely want to report the securities using what method?

Accepted Answer

A)   Held-to-maturity
B)   Trading securities
C)   Available-for-saleD) All of the above
E) B) and C)

Question 5

Given the ABC Company's balance sheet, what is ABC's net working capital at the end of the fiscal year?

Accepted Answer

Net Workin...

Question 6

Given the following information on the Generic Company for fiscal year 2013, what is the amount of Generic Company's long-term debt?

Accepted Answer

The answer of Given the following information on the Generic...

Question 7

Given the income statement information for the XYZ Company, what is the amount of XYZ's gross profit for this fiscal year?
XYZ Company, Income Statement information for the year ended December 31, 2013

Accepted Answer

$951

Question 8

Which of the following statements is not true regarding earnings per share?

Accepted Answer

A)   Earnings per share is calculated as net income divided by weighted average number of shares.
B)   Earnings per share is calculated as dividends paid divided by weighted average number of shares.
C)   If a company has convertible bonds or stock options outstanding, diluted earnings per share would be beneficial to the analyst.
D)   Diluted earnings per share is the adjusted net income divided by the total possible number of shares that could be outstanding if all potentially dilutive securities outstanding were converted into common shares.E) B) and D)
F) None of the above

Question 9

The accounting identity is best described as:

Accepted Answer

A)   assets = liabilities + equity.
B)   Invested capital = debt + equity.
C)   net plant and equipment = gross plant and equipment - accumulated depreciation.D) A) and B)
E) A) and C)

Question 10

Your boss has asked you to analyze Wal-Mart stock. Which statement would you go to if you need a snapshot of Wal-Mart's financial position, with a listing of assets, liabilities, and equity?

Accepted Answer

A)   Balance sheet
B)   Income Statement
C)   Cash flow statementD) None of the above
E) All of the above

Question 11

Suppose the Apple Company buys a boiler that costs $100,000. If the boiler is classified as a 3-year MACRS asset, the book value for tax purposes on this boiler at the end of the second year, given the MACRS rates:
 is closest to:

Accepted Answer

A)   $0.
B)   $7,410.
C)   $14,810.
D)   $22,220.E) None of the above
F) A) and B)

Question 12

You have the following information regarding ABC Company:
 Total of current liabilities are closest to:

Accepted Answer

A)   $11,000
B)   $12,000
C)   $13,000
D)   $25,000E) A) and B)
F) A) and C) C

Question 13

Given the following information on the Generic Company for fiscal year 2013, what is the amount of Generic Company's cash flow for / from financing?

Accepted Answer

The answer of Given the following information on the Generic...

Question 14

List some of the external users who rely on financial statements.

Accepted Answer

Investors, employees...

Question 15

The amounts due to a company's suppliers is best described as:

Accepted Answer

A)   working capital.
B)   operating capital.
C)   accounts payable.
D)   prepaid expenses.E) C) and D)
F) A) and B)

Question 16

What are the total liabilities for ABC Company's at the end of the fiscal year?

Accepted Answer

Total liab...

Question 17

Which of the following statements about accrued expenses not true?

Accepted Answer

A)   Accrued expenses include taxes payable.
B)   Accrued expenses include wages payable.
C)   Accrued expenses are the same things as prepaid expenses.
D)   Accrued expenses are amounts owed from transactions that have occurred but for which payments are not yet due.E) A) and D)
F) A) and C)

Question 18

Basic earnings per share is best described as

Accepted Answer

A)   
B)   
C)   D) A) and C)
E) A) and B)

Question 19

You have been asked to analyze Yum Brands. Your objective is to remove the effects of judgment on the financial statements as much as possible. If you can only look at one statement, which statement of Yum Brands will most remove the effects of judgment?

Accepted Answer

A)   Balance sheet
B)   Income statement
C)   Statement of cash flowsD) All of the above
E) A) and B)

Question 20

Generally accepted accounting principles (GAAP) vary from country to country.

Accepted Answer

A) True 
 B)False

Exam 3: Financial Statements

Accumulated depreciation represents:

Correct AnswerverifiedShow Answer

Taxes that the company reasonably expects to pay in the future are called deferred tax liabilities.

Correct AnswerverifiedTrue

Three years ago ABC Company paid $4,500 for a new copier, which would cost $6,000 to replace today. If it is on the books at $4,500 this would be an example of using historical cost.

Correct AnswerverifiedShow Answer

If a company has gains in its marketable securities, it would most likely want to report the securities using what method?

Correct AnswerverifiedShow Answer

Given the ABC Company's balance sheet, what is ABC's net working capital at the end of the fiscal year?

Correct AnswerverifiedNet Workin...View AnswerShow Answer

Given the following information on the Generic Company for fiscal year 2013, what is the amount of Generic Company's long-term debt?

Correct AnswerverifiedShow Answer

Given the income statement information for the XYZ Company, what is the amount of XYZ's gross profit for this fiscal year? XYZ Company, Income Statement information for the year ended December 31, 2013

Correct Answerverified$951

Which of the following statements is not true regarding earnings per share?

Correct AnswerverifiedShow Answer

The accounting identity is best described as:

Correct AnswerverifiedShow Answer

Your boss has asked you to analyze Wal-Mart stock. Which statement would you go to if you need a snapshot of Wal-Mart's financial position, with a listing of assets, liabilities, and equity?

Correct AnswerverifiedShow Answer

Suppose the Apple Company buys a boiler that costs $100,000. If the boiler is classified as a 3-year MACRS asset, the book value for tax purposes on this boiler at the end of the second year, given the MACRS rates: is closest to:

Correct AnswerverifiedShow Answer

You have the following information regarding ABC Company: Total of current liabilities are closest to:

Correct AnswerverifiedC

Given the following information on the Generic Company for fiscal year 2013, what is the amount of Generic Company's cash flow for / from financing?

Correct AnswerverifiedShow Answer

List some of the external users who rely on financial statements.

Correct AnswerverifiedInvestors, employees...View AnswerShow Answer

The amounts due to a company's suppliers is best described as:

Correct AnswerverifiedShow Answer

What are the total liabilities for ABC Company's at the end of the fiscal year?

Correct AnswerverifiedTotal liab...View AnswerShow Answer

Which of the following statements about accrued expenses not true?

Correct AnswerverifiedShow Answer

Basic earnings per share is best described as

Correct AnswerverifiedShow Answer

You have been asked to analyze Yum Brands. Your objective is to remove the effects of judgment on the financial statements as much as possible. If you can only look at one statement, which statement of Yum Brands will most remove the effects of judgment?

Correct AnswerverifiedShow Answer

Generally accepted accounting principles (GAAP) vary from country to country.

Correct AnswerverifiedShow Answer

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True

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Net Workin...
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$951

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C

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Investors, employees...
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Total liab...
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