Mathematics > QUESTIONS & ANSWERS > Midterm Exam Part 1and part 2 questions and answers (100% answered correctly) (All)

Midterm Exam Part 1and part 2 questions and answers (100% answered correctly)

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Question 1 2 out of 2 points To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by the employee authorized to sign checks. Selected Answer: Fals e Cor... rect Answer: Fals e  Question 2 2 out of 2 points The revenue recognition principle dictates that revenue be recognized in the accounting period in which the performance obligation is satisfied. Selected Answer: Tru e Correct Answer: Tru e  Question 3 2 out of 2 points The multiple-step income statement is considered more useful than the single-step income statement because it highlights the components of net income. Selected Answer: Tru e Correct Answer: Tru e  Question 4 0 out of 2 points Bathlinks Corporation has a debt to assets ratio of 73%. This tells the user of Bathlinks’s financial statements that Selected Answer: Bathlinks is getting a 27% return on its assets. Correct Answer: there is a risk that Bathlinks cannot pay its debts as they come due.  Question 5 2 out of 2 points An aging of accounts receivable schedule is based on the premise that the longer the period an account remains unpaid, the greater the probability that it will eventually be collected. Selected Answer: Fals e Correct Answer: Fals e  Question 6 2 out of 2 points Expense recognition is tied to revenue recognition. Selected Answer: Tru e Correct Answer: Tru e  Question 7 2 out of 2 points Which of the following would not be classified as a long-term liability? Selected Answer: Current maturities of longterm debt Correct Answer: Current maturities of longterm debt  Question 8 2 out of 2 points Which of the following is not a common way that managers use the balance sheet? Selected Answer: To analyze the balances of assets, liabilities, and stockholders’ equity throughout the accounting period Correct Answer: To analyze the balances of assets, liabilities, and stockholders’ equity throughout the accounting period  Question 9 2 out of 2 points Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company. Selected Answer: Fals e Correct Answer: Fals e  Question 10 2 out of 2 points Lankston Company began the year by issuing $90,000 of common stock for cash. The company recorded revenues of $825,000, expenses of $720,000, and paid dividends of $45,000. What was Lankston’s net income for the year? Selected Answer: $105,0 00 Correct Answer: $105,0 00  Question 11 2 out of 2 points The best definition of assets is the Selected Answer: resources belonging to a company that have future benefit to the company. Correct Answer: resources belonging to a company that have future benefit to the company.  Question 12 2 out of 2 points Marvin Services Corporation had the following accounts and balances: Accounts payable $18,000 Equipment $21,000 Accounts receivable 3,000 Land 21,000 Buildings ? Unearned service revenue 6,000 Cash 9,000 Total stockholders' equity ? If the balance of the Buildings account was $45,000 and the equipment was sold for $21,000, what would be the total of stockholders' equity? Selected Answer: $75,0 00 Correct Answer: $75,0 00 [Show More]

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