ACC\u00a0556\u00a0–\u00a0Midterm\u00a0part\u00a01\t\t\t\u00a0\t\t\t\u00b7 Question\u00a01\t\t\tSource\u00a0documents\u00a0can\u00a0provide\u00a0evidence\u00a0that\u00a0a\u00a0transaction\u00a0has\u00a0occurred\t\t\t\u00a0\t\t\t\u00b7 Question\u00a02\t\t\tExpense\u00a0recognition\u00a0is\u00a0tied\u00a0to\u00a0revenue\u00a0recognition.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a03\t\t\tTo\u00a0obtain\u00a0maximum\u00a0benefit\u00a0from\u00a0a\u00a0bank\u00a0reconciliation,\u00a0the\u00a0reconciliation\u00a0should\u00a0be\u00a0prepared\u00a0by\u00a0the\u00a0employee\u00a0authorized\u00a0to\u00a0sign\u00a0checks.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a04\t\t\tAn\u00a0aging\u00a0of\u00a0accounts\u00a0receivable\u00a0schedule\u00a0is\u00a0based\u00a0on\u00a0the\u00a0premise\u00a0that\u00a0the\u00a0longer\u00a0the\u00a0period\u00a0an\u00a0account\u00a0remains\u00a0unpaid,\u00a0the\u00a0greater\u00a0the\u00a0probability\u00a0that\u00a0it\u00a0will\u00a0\t\t\teventually\u00a0be\u00a0collected.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a05\t\t\tA\u00a0concentration\u00a0of\u00a0credit\u00a0risk\u00a0is\u00a0a\u00a0threat\u00a0of\u00a0nonpayment\u00a0from\u00a0a\u00a0single\u00a0customer\u00a0or\u00a0class\u00a0of\u00a0customers\u00a0that\u00a0could\u00a0adversely\u00a0affect\u00a0the\u00a0financial\u00a0health\u00a0of\u00a0the\u00a0company.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a06\t\t\tWhich\u00a0of\u00a0the\u00a0following\u00a0is\u00a0not\u00a0a\u00a0common\u00a0way\u00a0that\u00a0managers\u00a0use\u00a0the\u00a0balance\u00a0sheet?\t\t\t\u00a0\t\t\t\u00b7 Question\u00a07\t\t\tFinancing\u00a0activities\u00a0include\u00a0the\u00a0purchase\u00a0or\u00a0sale\u00a0of\u00a0long-lived\u00a0assets\u00a0or\u00a0the\u00a0purchase\u00a0or\u00a0sale\u00a0of\u00a0investment\u00a0securities.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a08\t\t\tBathlinks\u00a0Corporation\u00a0has\u00a0a\u00a0debt\u00a0to\u00a0assets\u00a0ratio\u00a0of\u00a073%.\u00a0This\u00a0tells\u00a0the\u00a0user\u00a0of\u00a0Bathlinks’s\u00a0financial\u00a0statements\u00a0that\t\t\t\u00a0\t\t\t\u00b7 Question\u00a09\t\t\tOwners\u00a0of\u00a0business\u00a0firms\u00a0are\u00a0the\u00a0only\u00a0people\u00a0who\u00a0need\u00a0accounting\u00a0information.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a010\t\t\tMarvin\u00a0Services\u00a0Corporation\u00a0had\u00a0the\u00a0following\u00a0accounts\u00a0and\u00a0balances:\t\t\tIf\u00a0the\u00a0balance\u00a0of\u00a0the\u00a0Buildings\u00a0account\u00a0was\u00a0$45,000\u00a0and\u00a0the\u00a0equipment\u00a0was\u00a0sold\u00a0for\u00a0$21,000,\u00a0what\u00a0would\u00a0be\u00a0the\u00a0total\u00a0of\u00a0stockholders’\u00a0equity?\t\t\t\u00a0\t\t\t\u00b7 Question\u00a011\t\t\tConsistent\u00a0use\u00a0of\u00a0the\u00a0same\u00a0accounting\u00a0principles\u00a0and\u00a0methods\u00a0is\u00a0necessary\u00a0for\u00a0meaningful\u00a0analysis\u00a0of\u00a0trends\u00a0within\u00a0a\u00a0company.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a012\t\t\tRequiring\u00a0employees\u00a0to\u00a0take\u00a0vacations\u00a0is\u00a0a\u00a0weakness\u00a0in\u00a0the\u00a0system\u00a0of\u00a0internal\u00a0controls\u00a0because\u00a0it\u00a0does\u00a0not\u00a0promote\u00a0operational\u00a0efficiency.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a013\t\t\tSolvency\u00a0ratios\u00a0measure\u00a0the\u00a0short-term\u00a0ability\u00a0of\u00a0the\u00a0company\u00a0to\u00a0pay\u00a0its\u00a0maturing\u00a0obligations.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a014\t\t\tThe\u00a0best\u00a0definition\u00a0of\u00a0assets\u00a0is\u00a0the\t\t\t\u00a0\t\t\t\u00b7 Question\u00a015\t\t\tThe\u00a0partnership\u00a0form\u00a0of\u00a0business\u00a0organization\t\t\t\u00a0\t\t\t\u00b7 Question\u00a016\t\t\tGoods\u00a0that\u00a0have\u00a0been\u00a0purchased\u00a0FOB\u00a0destination\u00a0but\u00a0are\u00a0in\u00a0transit,\u00a0should\u00a0be\u00a0excluded\u00a0from\u00a0a\u00a0physical\u00a0count\u00a0of\u00a0goods\u00a0by\u00a0the\u00a0buyer.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a017\t\t\tManagement\u00a0may\u00a0choose\u00a0any\u00a0inventory\u00a0costing\u00a0method\u00a0it\u00a0desires\u00a0as\u00a0long\u00a0as\u00a0the\u00a0cost\u00a0flow\u00a0assumption\u00a0chosen\u00a0is\u00a0consistent\u00a0with\u00a0the\u00a0physical\u00a0movement\u00a0of\u00a0goods\u00a0in\u00a0the\u00a0company.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a018\t\t\tWhich\u00a0of\u00a0the\u00a0following\u00a0would\u00a0not\u00a0be\u00a0classified\u00a0as\u00a0a\u00a0long-term\u00a0liability?\t\t\t\u00a0\t\t\t\u00b7 Question\u00a019\t\t\tThe\u00a0economic\u00a0resources\u00a0that\u00a0are\u00a0owned\u00a0by\u00a0a\u00a0business\u00a0are\u00a0called\u00a0stockholders’\u00a0equity.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a020\t\t\tAn\u00a0advantage\u00a0of\u00a0using\u00a0the\u00a0periodic\u00a0inventory\u00a0system\u00a0is\u00a0that\u00a0it\u00a0requires\u00a0less\u00a0record\u00a0keeping\u00a0than\u00a0the\u00a0perpetual\u00a0inventory\u00a0system.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a021\t\t\tThe\u00a0revenue\u00a0recognition\u00a0principle\u00a0dictates\u00a0that\u00a0revenue\u00a0be\u00a0recognized\u00a0in\u00a0the\u00a0accounting\u00a0period\u00a0in\u00a0which\u00a0the\u00a0performance\u00a0obligation\u00a0is\u00a0satisfied.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a022\t\t\tLankston\u00a0Company\u00a0began\u00a0the\u00a0year\u00a0by\u00a0issuing\u00a0$90,000\u00a0of\u00a0common\u00a0stock\u00a0for\u00a0cash.\u00a0The\u00a0company\u00a0recorded\u00a0revenues\u00a0of\u00a0$825,000,\u00a0expenses\u00a0of\u00a0$720,000,\u00a0and\u00a0\t\t\tpaid\u00a0dividends\u00a0of\u00a0$45,000.\u00a0What\u00a0was\u00a0Lankston’s\u00a0net\u00a0income\u00a0for\u00a0the\u00a0year?\t\t\t\u00a0\t\t\t\u00b7 Question\u00a023\t\t\tThe\u00a0multiple-step\u00a0income\u00a0statement\u00a0is\u00a0considered\u00a0more\u00a0useful\u00a0than\u00a0the\u00a0single-step\u00a0income\u00a0statement\u00a0because\u00a0it\u00a0highlights\u00a0the\u00a0components\u00a0of\u00a0net\u00a0income.\t\t\t\u00a0\t\t\t\u00b7 Question\u00a024\t\t\tUse\u00a0the\u00a0following\u00a0data\u00a0to\u00a0calculate\u00a0the\u00a0current\u00a0ratio.\t\t\tCarne\u00a0Auto\u00a0Supplies\t\t\tBalance\u00a0Sheet\t\t\tDecember\u00a031,\u00a02014\t\t\t\t\t\u00a0\t\tCash \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0$\u00a0\u00a0\u00a0\u00a035,000 \ufffd \ufffdAccounts\u00a0payable \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0$\u00a0\u00a0\u00a065,000\t\tAccounts\u00a0receivable \ufffd \ufffd \ufffd \ufffd \ufffd50,000 \ufffd \ufffdSalaries\u00a0and\u00a0wages\u00a0payable \ufffd \ufffd \ufffd\u00a010,000\t\tInventory \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd70,000 \ufffd \ufffdMortgage\u00a0payable \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd90,000\t\tPrepaid\u00a0insurance \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a040,000 \ufffd \ufffdTotal\u00a0liabilities \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd$165,000\t\tStock\u00a0investments \ufffd \ufffd \ufffd \ufffd \ufffd\u00a080,000 \ufffd \ufffd\u00a0\u00a0\t\tLand \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a095,000 \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\t\tBuildings \ufffd \ufffd \ufffd\u00a0\u00a0$100,000 \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0Common\u00a0stock \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd$120,000\t\tLess:\u00a0Accumulated \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0Retained\u00a0earnings \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0250,000\t\t \ufffd\u00a0depreciation \ufffd\u00a0\u00a0\u00a0\u00a0(30,000) \ufffd\u00a0\u00a085,000 \ufffd \ufffd \ufffdTotal\u00a0stockholders’\u00a0equity \ufffd \ufffd$370,000\t\tTrademarks \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a070,000 \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0Total\u00a0liabilities\u00a0and\u00a0\t\tTotal\u00a0assets \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0$535,000 \ufffd \ufffd \ufffd \ufffdstockholders’\u00a0equity \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0$535\t\t\t\u00a0\t\t\t\u00b7 Question\u00a025\t\t\tWhich\u00a0of\u00a0the\u00a0following\u00a0is\u00a0the\u00a0least\u00a0likely\u00a0consideration\u00a0that\u00a0management\u00a0uses\u00a0when\u00a0deciding\u00a0whether\u00a0to\u00a0pay\u00a0a\u00a0dividend?<\/p>\n","protected":false},"excerpt":{"rendered":"
ACC\u00a0556\u00a0–\u00a0Midterm\u00a0part\u00a01 \u00a0 \u00b7 Question\u00a01 Source\u00a0documents\u00a0can\u00a0provide\u00a0evidence\u00a0that\u00a0a\u00a0transaction\u00a0has\u00a0occurred \u00a0 \u00b7 Question\u00a02 Expense\u00a0recognition\u00a0is\u00a0tied\u00a0to\u00a0revenue\u00a0recognition. \u00a0 \u00b7 Question\u00a03 To\u00a0obtain\u00a0maximum\u00a0benefit\u00a0from\u00a0a\u00a0bank\u00a0reconciliation,\u00a0the\u00a0reconciliation\u00a0should\u00a0be\u00a0prepared\u00a0by\u00a0the\u00a0employee\u00a0authorized\u00a0to\u00a0sign\u00a0checks. \u00a0 \u00b7 Question\u00a04 An\u00a0aging\u00a0of\u00a0accounts\u00a0receivable\u00a0schedule\u00a0is\u00a0based\u00a0on\u00a0the\u00a0premise\u00a0that\u00a0the\u00a0longer\u00a0the\u00a0period\u00a0an\u00a0account\u00a0remains\u00a0unpaid,\u00a0the\u00a0greater\u00a0the\u00a0probability\u00a0that\u00a0it\u00a0will\u00a0 eventually\u00a0be\u00a0collected. \u00a0 \u00b7 Question\u00a05 A\u00a0concentration\u00a0of\u00a0credit\u00a0risk\u00a0is\u00a0a\u00a0threat\u00a0of\u00a0nonpayment\u00a0from\u00a0a\u00a0single\u00a0customer\u00a0or\u00a0class\u00a0of\u00a0customers\u00a0that\u00a0could\u00a0adversely\u00a0affect\u00a0the\u00a0financial\u00a0health\u00a0of\u00a0the\u00a0company. \u00a0 \u00b7 Question\u00a06 Which\u00a0of\u00a0the\u00a0following\u00a0is\u00a0not\u00a0a\u00a0common\u00a0way\u00a0that\u00a0managers\u00a0use\u00a0the\u00a0balance\u00a0sheet? \u00a0 \u00b7 Question\u00a07 Financing\u00a0activities\u00a0include\u00a0the\u00a0purchase\u00a0or\u00a0sale\u00a0of\u00a0long-lived\u00a0assets\u00a0or\u00a0the\u00a0purchase\u00a0or\u00a0sale\u00a0of\u00a0investment\u00a0securities. \u00a0 \u00b7 Question\u00a08 Bathlinks\u00a0Corporation\u00a0has\u00a0a\u00a0debt\u00a0to\u00a0assets\u00a0ratio\u00a0of\u00a073%.\u00a0This\u00a0tells\u00a0the\u00a0user\u00a0of\u00a0Bathlinks’s\u00a0financial\u00a0statements\u00a0that \u00a0 \u00b7 Question\u00a09 Owners\u00a0of\u00a0business\u00a0firms\u00a0are\u00a0the\u00a0only\u00a0people\u00a0who\u00a0need\u00a0accounting\u00a0information. \u00a0 \u00b7 Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-200189","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200189","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=200189"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200189\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=200189"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=200189"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=200189"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}