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Acct |\ 2000 |\Exam |\ 1 |\LSU |\questions |\with |\answers
Classified |\Balance |\Sheet |- |\CORRECT |\ANSWERS |\✔✔Reports |\assets, |
liabilities, |\and |\equity |\at |\specific |\point |\in |\time Operating |\Cycle |- |\CORRECT |\ANSWERS |\✔✔Average |\time |\it |\takes |\from |\purchase |\of |\inventory |\to |\the |\collection |\of |\cash |\from |\customers Liquidity |- |\CORRECT |\ANSWERS |\✔✔Order |\in |\which |\assets |\are |
converted |\into |\cash Order |\of |\Liquidity |- |\CORRECT |\ANSWERS |\✔✔cash, |\short |\term |
investments, |\acct |\receivable, |\inventory, |\supplies, |\prepaid |\insurance Accumulated |\depreciation |- |\CORRECT |\ANSWERS |\✔✔The |\total |\of |
depreciation |\that |\a |\company |\has |\taken |\on |\assets |(subtracted) Intangibles |- |\CORRECT |\ANSWERS |\✔✔Assets |\that |\do |\not |\have |\a |
physical |\substance |\yet Ratio |- |\CORRECT |\ANSWERS |\✔✔Expresses |\the |\mathematical |
relationship |\between |\one |\quantity |\and |\another
Probability |\ratio |- |\CORRECT |\ANSWERS |\✔✔Measures |\the |\income |\or |
operating |\success |\for |\a |\company |\for |\given |\period |\of |\time Working |\capital |- |\CORRECT |\ANSWERS |\✔✔Current |\assets |\minus |
current |\liabilities Liquidity |\ratio |- |\CORRECT |\ANSWERS |\✔✔Measures |\the |\short-term |
ability |\of |\the |\company |\to |\pay |\its |\maturing |\obligations |\and |
unexpected |\needs |\for |\cash Current |\ratio |(liquidity) |- |\CORRECT |\ANSWERS |\✔✔Current |\assets/current |\liabilities Solvency |\ratio |- |\CORRECT |\ANSWERS |\✔✔Measures |\the |\ability |\of |\the |
company |\to |\survive |\over |\a |\long |\period |\of |\time Debt |\to |\total |\assets |- |\CORRECT |\ANSWERS |\✔✔Total |\liabilities/total |
assets |(lower |\number |\the |\better) EPS |(earnings |\per |\share) |- |\CORRECT |\ANSWERS |\✔✔Net |\income- preferred |\dividends/avg |\common |\shares Generally |\Accepted |\Accounting |\Principles |(GAAP) |- |\CORRECT |
ANSWERS |\✔✔Rules |\accountants |\have |\to |\follow
Comparability |- |\CORRECT |\ANSWERS |\✔✔Results |\when |\different |
companies |\use |\the |\same |\accounting |\principles Consistency |- |\CORRECT |\ANSWERS |\✔✔Results |\when |\a |\company |\uses |
the |\same |\principles |\and |\methods |\from |\year |\to |\year Verifiability |- |\CORRECT |\ANSWERS |\✔✔Info |\that |\can |\be |\proved |\that |
it's |\free |\from |\error Timeliness |- |\CORRECT |\ANSWERS |\✔✔Info |\that |\is |\available |\to |\decision |\makers |\before |\it |\loses |\capacity |\to |\influence |\decision |\makers Understandability |- |\CORRECT |\ANSWERS |\✔✔Info |\has |\this |\quality |\if |\it |
is |\presented |\in |\a |\clear |\and |\concise |\fashion Monetary |\unit |\assumption |- |\CORRECT |\ANSWERS |\✔✔Requires |\that |
only |\things |\that |\can |\be |\expressed |\in |\money |\are |\included |\in |\acct |
records Economic |\entity |\assumption |- |\CORRECT |\ANSWERS |\✔✔Every |
economic |\entity |\can |\be |\separately |\identified |\and |\accounted |\for Periodicity |\assumption |- |\CORRECT |\ANSWERS |\✔✔States |\that |\the |\life |
of |\a |\business |\can |\be |\divided |\into |\time |\periods
Going |\concern |\assumption |- |\CORRECT |\ANSWERS |\✔✔The |\business |
will |\remain |\in |\operation |\for |\foreseeable |\future Accrual |\accounting |- |\CORRECT |\ANSWERS |\✔✔Transactions |\that |
change |\a |\company's |\financial |\statements |\are |\recorded |\in |\the |
periods |\in |\which |\the |\events |\occur Cost |\principle |- |\CORRECT |\ANSWERS |\✔✔Dictates |\companies |\record |
assets |\at |\their |\cost. Fair |\value |\principle |- |\CORRECT |\ANSWERS |\✔✔If |\the |\value |\starts |
changing, |\you |\would |\change |\the |\value |\on |\balance |\sheet Accounting |- |\CORRECT |\ANSWERS |\✔✔The |\info |\system |\that |\identifies, |\records, |\and |\communicates |\the |\economic |\events |\of |\an |\organization |\to |\interested |\users Internal |\users |(inside |\the |\company) |- |\CORRECT |\ANSWERS |
✔✔Managers, |\supervisors, |\CEO, |\CFO, |\board |\members External |(outside |\the |\company) |- |\CORRECT |\ANSWERS |\✔✔Investors, |
stockholders, |\creditors, |\banks
Retained |\earnings |\statement |- |\CORRECT |\ANSWERS |\✔✔Beginning |\of |
r/e |+net |\income |-dividends. |\Covers |\time |\span Balance |\sheet |- |\CORRECT |\ANSWERS |\✔✔Point |\in |\time. |\Assets |\must |
equal |\stock |\holders |\Eq |\and |\liabilities Components |\of |\annual |\report |- |\CORRECT |\ANSWERS |\✔✔ 4 |\financial |
statements, |\MD&A, |\note |\to |\financial |\statements, |\auditors |\opinion Management |\discussion |\and |\analysis |(MD&A) |- |\CORRECT |\ANSWERS |
✔✔Part |\of |\report |\that |\management |\discusses |\its |\ability |\to |\pay |
debts |\and |\results |\of |\operations Note |\to |\FS |- |\CORRECT |\ANSWERS |\✔✔Clarify |\the |\financial |\statements |
and |\give |\additional |\details Auditor's |\opinion |- |\CORRECT |\ANSWERS |\✔✔Addresses |\fairness |\and |
accuracy |\of |\financial |\statements Unqualified |\opinion |- |\CORRECT |\ANSWERS |\✔✔When |\auditors |\like |
what |\they |\see |\in |\your |\financial |\statement
T-Account |- |\CORRECT |\ANSWERS |\✔✔Record |\of |\increases |\and |
decreases |\in |\a |\specific |\asset, |\liability, |\equity, |\revenue |\or |\expense |
item Assets |\have |\a |\normal |\balance |\of |- |\CORRECT |\ANSWERS |\✔✔Debit Liabilities |\and |\stockholders |\equity |\have |\a |\normal |\balance |\of |- |
CORRECT |\ANSWERS |\✔✔Credit Journal |- |\CORRECT |\ANSWERS |\✔✔Book |\of |\original |\entry. |\Chrono. |
order. Posting |- |\CORRECT |\ANSWERS |\✔✔The |\process |\of |\transferring |
amounts |\from |\journal |\to |\the |\ledger Trial |\balance |- |\CORRECT |\ANSWERS |\✔✔List |\of |\accounts |\and |\their |
balances |\at |\a |\given |\time. |\To |\prove |\debits=credits FASB |\enhancing |\qualities |- |\CORRECT |\ANSWERS |\✔✔Comparability, |
understandability, |\verifiability, |\consistency, |\timeliness
