Question 1 5 / 5 points

Which of the following statements is FALSE?

Question options:

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.

Question options:

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.

Question options:

before the time

after the time

the same as

different from

Question 4 5 / 5 points

A __________ expresses each item on the balance sheet as a percentage of total assets.

Question options:

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 options:

Marketable securities

Future assets

Current assets

Short-lived

Question 6 5 / 5 points

The valuation of marketable securities on the balance sheet requires the separation of investment securities into three categories:

Question options:

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?

Question options:

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 options:

liability

receivable

asset

accrued asset

Question 9 5 / 5 points

Which item below does NOT describe a balance sheet?

Question options:

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

1 $10

2 $12

3 $15

4 $18

5 $13

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 options:

$37

$41

$22

$31

Question 11 5 / 5 points

__________ are also referred to as short-term investments.

Question options:

Real estate

Annuities

Non-term life insurance

Marketable securities

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 options:

future

questionable

unknown

doubtful

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

1 $3

2 $4

3 $5

4 $6

5 $7

 
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