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Exam 15: Using Management and Accounting Information

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Question 51

True/False

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Audited financial statements guarantee that a firm has not "cooked" the books.

A) True
B) False

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Question 52

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Selling expenses are considered to be a type of

A) current liability.
B) general expense.
C) prepaid expense.
D) operating expense.
E) fixed liability.

F) A) and C)
G) A) and E)

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Question 53

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Long-term liabilities need not be repaid for at least one year.

Jerand has written three books which have been copyrighted and published by a national publisher.He also invented and patented a desktop cover that can change a desk from sitting desk to a standing desk and back again using powered telescoping legs.He is using an accounting program to prepare his business accounting records.The program asks questions about the different aspects of his business and has asked him how the book copyrights and patent should be classified.Which of the following would be the proper designation for the copyrights and patent?

As the accountant for Ideal Manufacturing Company,you determine the following totals in your balance sheet: total assets-$124,000;current liabilities-$41,000;long-term liabilities-$13,000.What is the total owners' equity for this company?

During the year Comer,Inc.,had $200,000 in goods available for sale.At the end of the accounting period it had an ending inventory of $40,000.This reveals that it had sold all but ____ worth of the available goods.

Because information rules must be checked out before a decision can be made,they lengthen the time required to analyze choices.

James Howard graduated from college and obtained a full-time job in accounting.At the end of his first year of employment,his assets totaled $9,000.His liabilities totaled $3,000.His ____ was $6,000.

Debts that will be repaid in one year or less are known as current liabilities.

Individuals or organizations outside of a company will never have the need or desire to view information on another company's finances.

The most liquid asset is

Multinational corporations do not have the responsibility nor the incentive to follow international accounting standards as there still is no particular set of global standards that are generally accepted worldwide.

Write the accounting equation.Then define each term.

The information provided by managerial accounting is of most benefit to a firm's

Schluster Hardware,Inc.,had a gross profit of $380,000,operating expenses of $210,000,and income taxes of $48,000.What is Schluster's net income after taxes?

Which of the following statements is false?

As the accountant for Franks Retail Stores,you must calculate the current ratio for the firm's last accounting period.The firm's current assets were $120,000,its fixed assets were $240,000,its current liabilities were $80,000,and its long-term liabilities were $60,000.Given these facts,what is the firm's current ratio?

Leslie's Lizards and Serpents,LLC,owner,Karen Skink,is wrestling with whether she should close the business.The air conditioning quit on a very hot day recently causing several of the lizards to overheat and die.In addition,a child put his hand in a snake's cage and was bitten.His parents were not closely supervising him in spite of signs in the store and a verbal warning by Karen prior to the incident.The child suffered only a minor puncture wound which healed rapidly,but the parents sued Leslie's anyway.While Karen is certain she will prevail in the suit,the attorney fees and court costs have almost depleted the company finances.Leslie's rents the store space,but owns all of the cages,food,heating equipment,store displays,software,other goods sold in the store,and the animals.Which of the following will be best for Karen to use to determine if she will be able to pay the company's current liabilities?

The statement of financial position is also known as the balance sheet.

Equipment and patents are known as intangible assets.