Chapter 2 Quiz\t\t\t\t\t\t\t\t\tQuestion 1\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tCash and supplies are both classified as current assets.\t\t\t\t\t\t\t\t\tQuestion 2\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tEarnings per share measures the net income earned on each share of common stock.\t\t\t\t\t\t\t\t\tQuestion 3\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tNet cash provided by operating activities takes into account that a company must invest in capital expenditures just to maintain its current level of operations.\t\t\t\t\t\t\t\t\tQuestion 4\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tIn order for information to be relevant, it must be reported on a monthly basis.\t\t\t\t\t\t\t\t\tQuestion 5\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tFor accounting purposes, business transactions should be kept separate from the personal transactions of the stockholders of the business\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tQuestion 6\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tIn a classified balance sheet, assets are usually classified as\t\t\t\t\t\t\t\t\tQuestion 7\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tEquipment is classified on the balance sheet as\t\t\t\t\t\t\t\t\tQuestion 8\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tUse the following data to determine the total dollar amount of assets to be classified as current assets.\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tQuestion 9\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tN3 Corporation has assets of $3,000,000, common stock of $780,000, and retained earnings of $475,000. What are the creditors’ claims on their assets?\t\t\t\t\t\t\t\t\tQuestion 10\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tThe following information is available for Bradshaw Corporation and Newell Corporation:\t\t\t\t\t\t\t\t\tBased on this information, the earnings per share calculations (rounded to two decimals)\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tQuestion 11\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tReporting a net income of $95,000 will\t\t\t\t\t\t\t\t\tQuestion 12\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tBased on the following data, what is the amount of current assets?\t\t\t\t\tAccounts payable”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd.. \ufffd \ufffd\u00a0\u00a0 $62,000\t\t\t\t\tAccounts receivable”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd.. \ufffd \ufffd\u00a0\u00a0 100,000\t\t\t\t\tCash”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd. \ufffd \ufffd\u00a0\u00a0\u00a0 50,000\t\t\t\t\tIntangible assets”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd \ufffd \ufffd\u00a0\u00a0 100,000\t\t\t\t\tInventory”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd. \ufffd \ufffd\u00a0\u00a0 138,000\t\t\t\t\tLong-term investments”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd. \ufffd \ufffd\u00a0\u00a0 160,000\t\t\t\t\tLong-term liabilities”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd \ufffd \ufffd\u00a0 200,000\t\t\t\t\tShort-term investments”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd. \ufffd \ufffd\u00a0\u00a0\u00a0 80,000\t\t\t\t\tNotes payable”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd. \ufffd \ufffd\u00a0\u00a0\u00a0 56,000\t\t\t\t\tProperty, plant, and equipment”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd \ufffd 1,340,000\t\t\t\t\tPrepaid insurance”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd.. \ufffd \ufffd \ufffd 2,000\t\t\t\t\t\t\t\t\tQuestion 13\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tUsing the following balance sheet and income statement data, what is the debt to assets ratio?\t\t\t\t\tCurrent assets \ufffd \ufffd \ufffd \ufffd\u00a0 $\u00a0 14,000 \ufffd \ufffd \ufffd\u00a0\u00a0 Net income \ufffd \ufffd \ufffd \ufffd\u00a0 $\u00a0 21,000\t\t\t\t\tCurrent liabilities \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 8,000 \ufffd \ufffd \ufffd\u00a0\u00a0 Stockholders’ equity \ufffd \ufffd\u00a0 39,000\t\t\t\t\tAverage assets\u00a0\u00a0 \ufffd \ufffd \ufffd \ufffd80,000 \ufffd \ufffd \ufffd\u00a0\u00a0 Total liabilities \ufffd \ufffd \ufffd \ufffd\u00a0 21,000\t\t\t\t\tTotal assets \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 60,000 \ufffd \ufffd \ufffd\u00a0\u00a0\t\t\t\t\tAverage common shares outstanding was 10,000.\t\t\t\t\t\t\t\t\tQuestion 14 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tWhich of the following is not considered a measure of liquidity?\t\t\t\t\t\t\t\t\tQuestion 15\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tFree cash flow provides an indication of a company’s ability to\t\t\t\t\t\t\t\t\tQuestion 16\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tIf Morris Corporation has a negative $131 million free cash flow, which of the following statements is most likely true?\t\t\t\t\t\t\t\t\tQuestion 17\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tAccounting information should be neutral in order to enhance\t\t\t\t\t\t\t\t\tQuestion 18\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tThe principle that indicates that assets should be reported at the price received to sell an asset is the\t\t\t\t\t\t\t\t\tQuestion 19\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tGarrison Company prepares quarterly reports, which it distributes to all stockholders and other entities that rely on its accounting information. Which of the following is the best term for the key assumption in financial reporting that Garrison is following?\t\t\t\t\t\t\t\t\tQuestion 20\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tEach of the following statements is justified by a fundamental quality or an enhancing of quality accounting. Write the letter in the blank next to each statement corresponding to the quality involved.<\/p>\n","protected":false},"excerpt":{"rendered":"
Chapter 2 Quiz Question 1 \u00a0 Cash and supplies are both classified as current assets. Question 2 \u00a0 Earnings per share measures the net income earned on each share of common stock. Question 3 \u00a0 Net cash provided by operating 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-200193","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200193","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=200193"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200193\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=200193"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=200193"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=200193"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}