Question 1 5 / 5 points
Which of the following statements is FALSE?
Common-size balance sheets allow for comparison of firms with different levels of total assets by introducing a common denominator.
The common-size balance sheet reveals the composition of assets within major categories.
Each item on a common-size balance sheet is expressed as a percentage of sales.
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.
assets and liabilities
liabilities and owner’s equity
assets and owner’s equity
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.
before the time
after the time
the same as
Question 4 5 / 5 points
A __________ expresses each item on the balance sheet as a percentage of total assets.
ratio balance sheet
common-size balance sheet
relative balance sheet
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 6 5 / 5 points
The valuation of marketable securities on the balance sheet requires the separation of investment securities into three categories:
held to maturity, negotiable securities, and securities available for sale.
held to maturity, negotiable securities, and securities available for purchase.
held to maturity, trading securities, and securities available for purchase.
held to maturity, trading securities, and securities available for sale.
Question 7 5 / 5 points
Which of the following statements is true?
The straight-line method of depreciation allocates a decreasing amount of depreciation expense each year.
Straight-line depreciation is the least used method for financial reporting purposes.
Fixed assets are reported at historical cost less accumulated depreciation on the balance sheet.
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 9 5 / 5 points
Which item below does NOT describe a balance sheet?
Assets = Liabilities + Stockholders’ Equity
Financial position at a point in time
Assets – Liabilities = Stockholders’ Equity
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
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 11 5 / 5 points
__________ are also referred to as short-term investments.
Non-term life insurance
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 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
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 14 0 / 5 points
Most manufacturing firms use the accelerated depreciation method and retailers use the __________ method for financial reporting purposes.
reverse accelerated depreciation
accelerated depreciation (also) (Incorrect)
Question 15 5 / 5 points
Which item below would NOT be a quality of financial reporting issue related to the balance sheet?
Mismatching the type of debt (short or long-term) used to finance assets
Overvaluation of assets
Off-balance sheet financing
Question 16 5 / 5 points
The balance sheet is also called the:
statement of future.
statement of welfare.
statement of condition.
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 18 5 / 5 points
A common-size balance sheet is useful to the analyst because it facilitates the __________ analysis of the firm.
Question 19 5 / 5 points
Additional information helpful to the analysis of accounts receivable and the allowance account is provided in the schedule of:
valuation and qualifying accounts.
additions to costs and expenses accounts.
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?
Notes payable and deferred taxes
Accounts payable and current portion of long-term debt
Deferred taxes and mortgages due in 30 years
Long-term warranties and accounts payable