Exam (elaborations)
BUS 302L - FINANCIAL ACCOUNTING EXAM WITH QUESTIONS AND VERIFIED ANSWERS
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BUS 302L - FINANCIAL ACCOUNTING EXAM WITH QUESTIONS AND VERIFIED ANSWERS ...
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Where in the annual report could a reader of the financial statements find outwhether the financial statements fairly portray the company's status and
performance? - The audit report from ANSWER
Which accounting principle makes the presumption that a business will last long
enough to fulfill its current goals and obligations? - ANSWER Considering
Assumption
At the beginning of the year, Johnny's Car Repair Shop had $60,000 in total
assets and $40,000 in total liabilities. The company reported $100,000 in
revenue from auto repairs, $55,000 in expenses, and $10,000 in dividends for
the year.
Johnny's Car Repair Shop declared a net income of $45,000 for the year.
Issuing long-term notes payable to purchase an office building is an example of
a - ANSWER noncash investing and financing transaction.
The amount of net income or net loss for the time was: if starting capital was
$25,000, ending capital was $37,000, and the owner's withdrawals were
$23,000. - ANSWER's $35,000 net income
The responsibility for deferred income taxes: - ANSWER represents income tax
obligations that are postponed until later years due to transient discrepancies
between tax accounting procedures and GAAP regulations.
Typically, a business charges $20 per unit for its goods, with a 25% profit
margin. The selling price per unit has decreased to $15, nevertheless. The 200
units that this company now has in stock were bought for $16 apiece. The price
,per replacement unit has now dropped to $13. Determine the inventory value at
the lesser of cost or market. - ANSWER $2,600
The Return on Assets Ratio is a metric used to assess profitability.
A measure of working capital is ANSWER Liquidity.
The phrase "ANSWER Book Value" refers to the difference between the
balance of a plant asset account and the associated accumulated depreciation
account.
A POS cash register was purchased by a corporation on January 1st for $5,400.
The salvage value of this register is $400, and it has a 10-year usable life. Using
the double-declining-balance technique, what would be the depreciation
expense for the second year of its useful life? - ANSWER $864
Which of the following does not have a listing in the cash flow statement? -
Funding Activities for Answers
When the present value of cash withdrawals exceeds the present value of cash
inflows, net present value is negative.
Out of the following, which one is a deferral? - ANSWER registering rent that
has been paid in advance
A company's owner's capital at the start of the accounting period was $50,000;
by the end, it was $75,000, and the owner had taken out $30,000 for personal
use. What was the net income or loss for the company during that time? -
ANSWER $55,000 after net income
, One example of an ANSWER Recognition Issue is determining whether to
record a transaction when the order for services is received or when the services
are rendered.
This is the price in cash that was exchanged on the acquisition date for goods or
services. Examples of items with historical cost measurements include most
inventories, buildings, land, and equipment. - ANSWER Historical Price
This is the current cash equivalent price that would be used to replace or buy
comparable products and services. Some current inventory that have lost value
since acquisition are examples of such items. - ANSWER: Present Replacement
Expense
This is the price that an asset could fetch in an orderly liquidation if it were sold
for its cash equivalent. Several financial instruments, such as stocks and bonds,
are examples of goods. This is also known as "mark to market." - ANSWER
Present Market Worth
This is the estimated cash that will be obtained through asset conversion in the
regular course of business. Accounts receivable is one example. customers
receivable are displayed on the balance sheet at the total amount billed less an
anticipated provision for questionable customers. Expected net realizable value
is the outcome. - ANSWER Value of Net Realisable
This is the total of net future cash inflows and outflows discounted at a suitable
interest rate to their present value. Long-term operating assets that have been
found to have a permanent impairment in value, long-term payables, and long-
term receivables are a few examples of such items. - ANSWER Current (or
Reduced) Worth
The relationship between particular financial statement data elements is
expressed by ____________________. - ANSWER Ratio Evaluation
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