1. Which of the following is not recorded in the SFP?A. AssetsB. EquityC. LiabilitiesD. Revenues2. Which of the following assets is NOT a current asset?A. CashB. EquipmentC. InventoriesD. Receivables3. What are the resources or things value owned by an enterprise?B. EquityC. ExpensesA. AssetsD. Liabilities4. What do you call the transferring of cost of asset to expense?A. Allowance for Bad debtsC. Accumulated DepreciationD. Accrued Interest PayableB. Accounts Payable 5. What is a Current Assets?A. It is cash or cash equivalent which is not restricted for current use.B. It is expected not to be realized or is held for sale or consumption in the normalcourse of the business operating cycle.C. t is held primarily for trading purposes or for the long term, and it is expected to berealized more than twelve months of the SFP date.D. It is expected to be settled in the normal course of the business operating cycle.6. What is a contra-validation account that refers to the amount estimated uncollectible?A. Accounts PayableB. Accrued Interest PayableC. Allowance for Bad DebtsD. Accumulated Depreciation7. Which of the following is an example of noncurrent liability?A. Accrued ExpensesB. Deferred IncomeC. Loans PayableD. Short-term Liabilities8. What accounts are reported in the SFP?A. AssetsC. LiabilityB. EquityD. Revenue9. What are these various materials which remain unused at the end of the accountingperiod?A. Accounts ReceivableC. Prepaid SuppliesB. Accounts PayableD. Withdrawal Account10. What pro forma of the SFP that presents its elements in horizontal order following theaccounting equation?A. Account FormB. Direct MethodC. Indirect Method D. Report Form

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Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 1RE

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Expenses represent outflows of assets or increases in liabilities as a result of efforts to produce revenues.
Which of the following would be classified as a cash outflow from an operating activity? a. Purchase of an investment b. Payment of dividends c. Purchase of equipment d. Payment of goods purchased from suppliers
That a business may only report activities on financial statements that are specifically related to company operations, not those activities that affect the owner personally, is known as which of the following? A. separate entity concept B. monetary measurement concept C. going concern assumption D. time period assumption
Which of the following terms is used when assuming a business will continue to operate in the foreseeable future? A. separate entity concept B. monetary measurement concept C. going concern assumption D. time period assumption
Which of the following is considered a constraint on useful information by Statement of Financial Accounting Concepts No. 8? a. benefits costs b. conservatism c. timeliness d. verifiability
Match the correct term with its definition. A. cost principle i. if uncertainty in a potential financial estimate, a company should err on the side of caution and report the most conservative amount B. full disclosure principle ii. also known as the historical cost principle, states that everything the company owns or controls (assets) must be recorded at their value at the date of acquisition C. separate iii. (also referred to as the matching principle) matches expenses with associated revenues in the period in which the revenues were generated. D. monetary iv. business must report any business activities that could affect what is reported on the financial statements E. conservatism v. system of using a monetary unit by which to value the transaction, such as the US dollar. F. revenue vi. period of time in which you performed the service or gave the customer the product is the period in which revenue is recognized. G. expense vii. business may only report activities on financial statements that are specifically related to company operations, not those activities that affect the owner personally.
Working capital is an indication of the firms ________. A. asset utilization B. amount of noncurrent liabilities C. liquidity D. amount of noncurrent assets
Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.
Which of the following statements is false? A. Noncash activities should be reported in accrual basis financial statements. B. Net cash flow from operating activities relates to normal business operations. C. Net income usually equals net cash flow from operating activities. D. The statement of cash flows is an essential part of the basic financial statements.
The accounting equation underlies the process used to capture the effect of economic events. The equation (Assets = Liabilities + Owners’ Equity) implies an equality between the total economic resourcesof an entity (its assets) and the total claims against the entity (liabilities and equity). It also implies thateach economic event affecting this equation will have a dual effect because resources always must equalclaims.
1. The following are the possible methods of measuring assets and liabilities other than historical cost: I) Current Cost, II) Realisable Value, III) Present Value IV) Replacement Cost. According to IASB’s Conceptual framework for financial reporting which of the measurement bases above can be used by an entity for measuring assets and liabilities shown in its statement of financial position. a. I and II only b. II and II only c. I, II and III only d. All four methods
Assets = Liability+ Capital where 'assets' are resources of the business; 'liabilities' are external claims against these resources; ' capital' is an internal or residual claim against these resources. Discuss the accounting equation considering the statement provided.

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1. Which of the following is not recorded in the SFP? A. Assets B. Equity C. Liabilities D. Revenues