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The balance sheet reports:

C. Assets and equities at a point in time.

Current assets include cash and all other assets expected to become cash or be consumed:

D. Within one year or one operating cycle, whichever is longer.

Red Onion Restaurant classifies a six-month prepaid insurance policy as a current asset. Its rationale is based on:

C. Definition.

An asset that is not expected to be converted to cash or consumed within one year or the operating cycle is:

A. Goodwill.

Which of the following accounts are closed at the end of the accounting period?

D. Income tax expense.

Which is a shareholders' equity account in the balance sheet?

B. Paid-in capital.

Rent collected in advance is:

B. A liability account in the balance sheet.

Notes payable:

D. Cannot determine its classification without additional information.

Which of the following is never a current liability account?

C. Prepaid rent

New Oaks Winery requires two months to make wine, two years to age it, one month to bottle it, two months to sell it, and one month to collect the receivable. Its operating cycle is:

B. Thirty months.

Noncurrent assets include:

D. Land held for a possible future plant site.

What would Symphony report as total current assets?

A. $823.

What would Symphony report as total assets?

D. $2,303.

What would Symphony report as total shareholders' equity?

B. $808.

What is the amount of working capital for Symphony?

C. $128.

Assets do not include:

C. Paid-in capital.

Cash equivalents would not include:

A. Cash not available for current operations.

Cash equivalents would include:

D. Debt instruments with maturity dates of less than three months from the date of the purchase.

Accrued expenses:

C. Result from services received before payment.

Janson Corporation Co.'s trial balance included the following account balances at December 31, 2011:
A/R 12,000
Inventories 40,000
Patent 12,000
Investments 30,000
PrePd insur. 6,000
Note/R due 2014 50,000

Investments consist of treasury bills that were purchased in November and mature in January. Prepaid insurance is for the next two years. What amount should be included in the current asset section of Janson's December 31, 2011, balance sheet?

B. $85,000.

Janson Corporation Co.'s trial balance included the following account balances at December 31, 2011:
A/P 25,000
Bond/ P due 2020 22,000
Salaries/P 16,000
Note/ P due 2012 20,000
Note/ P 2016 40,000
What amount should be included in the current liability section of Janson's December 31, 2011, balance sheet?

C. $61,000.

The usual difference between accounts payable and notes payable is:

D. Explicitly stated interest.

Which of the following would be disclosed in the summary of significant accounting policies disclosure note?

A. Option A (Composition of Long-term debt: No / Depreciation Method: Yes

Which of the following is not a required disclosure for related party transactions?

D. The impact of the transactions on current year's income.

Disclosure notes would not include:

D. Data to adjust the financial statements so that they are not misleading.

The principal concern with accounting for related party transactions is:

B. Differences between economic substance and legal form.

A subsequent event for an entity with a December 31, 2011, year-end would not include:

A. A change in the estimated useful lives of equipment in January 2012.

How are management's responsibility and the auditors' opinion on internal controls represented in the standard auditor's report?
Management's Responsibility?
Auditor's Responsibility?

B. Option B (Management: Explicitly / Auditor's: Explicitly

The final paragraph of the audit report:

B. Provides the auditor's opinion on the effectiveness of internal control.

The Management Discussion and Analysis section of the annual report can best be described as:

D. Biased but informative.

An example of fraud would be:

C. Knowingly classifying a material non-current receivable as a current receivable.

An example of an error would be:

B. Counting an inventory item twice when taking a physical inventory.

An exception that is so serious that even a qualified opinion is not justified would result in:

C. An adverse opinion.

Liquidity refers to:

B. The readiness of an asset to be converted to cash.

Lack of long-term solvency refers to:

A. Risk of non-payment relative to liabilities in the capital structure.

The current ratio is given by:

C. Current assets divided by current liabilities.

The acid-test ratio is also known as the:

D. Quick ratio.

The quick ratio is:

C. Current assets minus inventory and prepaid items divided by current liabilities.

Working capital is equal to:

D. Current assets minus current liabilities.

Which of the following is not a financing ratio?

C. The current ratio.

When a company pays its bill from a plumber for previous services on account:

A. Its debt to equity ratio always decreases.

When a company accrues federal income taxes at the end of the accounting period:

D. Its debt to equity ratio increases.

Assume a company's liquidity and financing ratios all are less than 1.0 before it purchases inventory on credit. When it makes the purchase:

B. Its quick ratio decreases.

When a company sells land for cash and recognizes a $25,000 gain:

C. Its debt to equity ratio decreases.

Paisano Seafood Inc. The current ratio is (rounded):

B. 1.58.

Paisano Seafood Inc. Working capital is:

C. $185.

Paisano Seafood Inc.Quick assets total

C. $280.

The acid-test ratio is (rounded):

B. 0.88.

quick assets

Current assets minus inventory and prepaid items

Harmony Health Foods (HHF) HHF's debt-to-equity ratio is (rounded):

B. 1.13.

HHF's times interest earned ratio is (rounded):

A. 3.47.

HHF's long term debt-to-equity ratio equity is:

B. 75%.

Which of the following is not a required segment reporting disclosure according to U.S. GAAP?

C. Segment liabilities.

Which of the following is not a required segment reporting disclosure according to International Financial Reporting Standards?
A. Segment profit or loss.
B. Segment assets.
C. Segment liabilities.
D. All are required disclosures.

D. All are required disclosures.

Which of the following is not a characteristic that defines a reportable operating segment according to U.S. GAAP?

D. Represents more than 20% of total company revenues, assets, or net income.

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