11. Information that is material means that an error or alternative method of handling a transaction A. Would possibly affect the judgment of someone relying on the financial statements B. Would not affect the decisions of users C. Might cause a company to understate its earnings for the accounting period D. Could increase the profitability of a company 12. An accountant is uncertain about the best estimate of an amount for a business transaction. If two amounts are about equally likely, the amount least likely to overstate assets and income is selected. Which of the following qualities is characterized by this action? A. Comparability B. Conservatism C. Materiality D. Neutrality 13. The qualitative characteristics of accounting data include A. Assets reported on the Balance Sheet B. All accounting information C. Cash flows D. Reliability 14. To determine the source of a company's assets, on financial statement will you look? A. Balance Sheet only B. Income Statement only C. Both the Balance Sheet and the Income Statement D. Both the Income Statement and the Statement of Retained Earnings 15. Bailey Company has provided the following information from its accounting records for the current year: Cash $ 50,000 Accounts Receivable $ 40,000 Inventory $ 60,000 Land $ 75,000 Accounts Payable $ 45,000 Payable (due 2020) $150,000 Retained Earnings ? ? ? Calculate Current Assets. A. $ 90,000 B. $ 150,000 C. $ 195,000 D. $ 225,000
980,908 634,509 Loss (4,085) (5,489) $1,344,375 $ 930,044 $2,039,271 ======= ======= a
112,971 98,081 $1,546,605 $ 1,566 $ 1,541 365,986 299,483 980,908 634,509 Loss (4,085) (5,489) a
REQUIRED: Using the information provided for Mardis Company, answer the following questions: A) How much did debt investors provide to Mardis Company? B) On which financial statement would an investor look to see if any stock was issued during the year? A) $30,000 ($7,000 Accounts Payable +$23,000 Bond Payable) B) The primary source for seeing whether any was issued during the year would be the Statement of Stockholders’ Equity. While the Balance Sheet may show an amount for “Capital Stock,” this amount is an ending balance, and would not show the results of any transactions involving new issuances of stock during the period. 137. Listed below are several accounts from the financial records of David Corporation at December 31. 2010: Retained Earnings $ 37,000 Payable - Due July 1, 2011 $ 12,000 Accumulated Depreciation $ 13,000 Interest Payable $ 1,000 Income Payable $ 24,000 Office Supplies $ 2,000 Buildings $ 48,000 Accounts Payable $ 36,000 Cash $ 11,000 Inventory $ 33,000 Accounts Receivable $ 35,000 Land $ 50,000 Capital Stock $ 60,000 Prepaid Rent $ 4,000 REQUIRED: Prepare the current assets section of the Balance Sheet for David Corp. at December 31, 2010. You may omit the heading. How does the concept of liquidity apply? Cash $ 11,000 Accounts 35,000 Inventory 33,000 Prepaid Rent 4,000 Office Supplies 2,000 Total $ 85,000 ===== Liquidity is an indicator of how close to cash the company’s assets are. Those assets that are most liquid are listed first. Current assets are expected to be converted into cash or used up within the next accounting period. 138. Listed below are several accounts from the financial records of David Corporation at December 31. 2010: Retained Earnings $ 37,000 Payable - Due July 1, 2011 $ 12,000