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Exam 2: Investing and Financing Decisions and the Accounting System

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Question 51

True/False

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An objective of preparing the trial balance is to test the equality of debits and credits.

A) True
B) False

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Question 52

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Which of the following journal entries is correct when a business entity pays cash for advertising to be used next year?

A)
B)
C)
D)

E) A) and B)
F) A) and C)

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Question 53

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Assets are reported on the balance sheet in the order of liquidity.

In order for information to be relevant,the information needs to be complete,neutral,and free from error.

The continuity assumption states that a business will continue to operate into the foreseeable future.

Which of the following would result when a company sells additional shares of common stock for cash?

The Pioneer Company has provided the following account balances: Cash $38,000; Short-term investments $4,000; Accounts receivable $48,000; Supplies $6,000; Long-term notes receivable $2,000; Equipment $96,000; Factory Building $180,000; Intangible assets $6,000; Accounts payable $30,000; Accrued liabilities payable $4,000; Short-term notes payable $14,000; Long-term notes payable $92,000; Common stock $180,000; Retained earnings $60,000. - What is Pioneer's current ratio?

Which of the following describes the impact on the balance sheet of purchasing supplies for cash?

The Superior Company has provided the following account balances: Cash $152,000; Short-term investments $18,000; Accounts receivable $36,000; Inventory $116,000; Long-term notes receivable $44,000; Equipment $174,000; Factory Building $270,000; Intangible assets $33,000; Accounts payable $130,000; Accrued liabilities payable $19,000; Short-term notes payable $84,000; Long-term notes payable $169,000. What is Superior's stockholders' equity?

Assets,liabilities,and stockholders' equity are all found within which of the following financial statements?

In order for information to be relevant,the information should have both predictive and/or feedback value.

Which of the following liability accounts does not usually require a future cash payment?

Borrowing cash from a bank would result in which of the following?

Which of the following assumptions implies that the assets and liabilities of the business are accounted for separately from the assets and liabilities of the owners?

Additional paid-in capital is reported on the balance sheet as a component of shareholders' equity.

Which of the following transactions would result in a decrease in the current ratio?

For each of the accounts listed below,indicate whether the typical or normal balance is a debit or credit. A.Supplies B.Notes payable C.Retained earnings D.Equipment E.Prepaid insurance expense F.Accounts receivable G.Land H.Additional paid-in capital I.Accounts payable J.Unearned revenue

Which of the following statements is false?

On December 31,2019,the accounting records for Mountain Trail Corp.showed the following amounts: 1.Prepare a balance sheet using GAAP as of December 31,2019. 2.Prepare a balance sheet using IFRS as of December 31,2019.

Which of the following describes the impact on the balance sheet of paying a current liability using cash?