Question 1

For each item listed, select the section of the balance sheet in which the item would be reported.
-Computer available for resale

Accepted Answer

Computers available for resale by a company are considered inventory, which is classified under Current Assets on the balance sheet because they are expected to be sold within the company's normal operating cycle or within a year.

Question 2

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Interest expense

Accepted Answer

Interest expense is a financial charge associated with borrowing money, which can be reported on various tax forms, including Form 1065 for partnerships, either on the main form or on Schedule K.

Question 3

From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Borrowed cash using a six-month note

Accepted Answer

The answer of From the following choices, select the answer...

Question 4

From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Purchased inventory on account

Accepted Answer

Purchasing inventory on account increases inventory (an asset) and increases accounts payable (a liability) by the same amount, leaving working capital (current assets minus current liabilities) unchanged.

Question 5

For each item listed, select the section of the balance sheet in which the item would be reported.
-Computer used within the business

Accepted Answer

The computer used within the business would be reported under the Property, Plant, and Equipment section of the balance sheet as it is a long-term asset used to run the business.

Question 6

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Cost of goods sold

Accepted Answer

Cost of goods sold is a type of operating expense and would appear in the operating expenses section of the multiple-step income statement.

Question 7

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Capital stock

Accepted Answer

Capital stock is a component of Stockholders' Equity section of the balance sheet.

Question 8

From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Paid cash for supplies

Accepted Answer

The answer of From the following choices, select the answer...

Question 9

From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Borrowed cash using a long-term note

Accepted Answer

When cash is borrowed using a long-term note, it increases the current assets (cash) and the current liabilities (notes payable), but the increase in current assets is greater than the increase in current liabilities, resulting in an increase in working capital.

Question 10

From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Purchased land for cash

Accepted Answer

When purchasing land for cash, the cash balance will decrease and there will be no change in current liabilities. Therefore, the working capital will decrease.

Question 11

For each item listed, select the section of the balance sheet in which the item would be reported.
-Bonds payable

Accepted Answer

Bonds payable are a type of long-term liability and would be reported in the "Long-term Liabilities" section of the balance sheet.

Question 12

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Income taxes payable

Accepted Answer

The answer of Match the selected items from a classified...

Question 13

For each item listed, select the section of the balance sheet in which the item would be reported.
-Interest payable

Accepted Answer

Interest payable is a liability that is due in a short-term period, which would be reported in the Current Liabilities section of the balance sheet.

Question 14

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Land

Accepted Answer

Land is a tangible asset, which is a physical asset with a finite value and expected useful life.

Answer: J
 If land is not owned or leased by the company, it would not show up on the balance sheet.

Question 15

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Wages payable

Accepted Answer

Wages payable represents a current liability as it is money owed to employees for work already completed but not yet paid. Therefore, it would appear in the Current Liabilities section of the classified balance sheet. It would not appear on the income statement as it is not a revenue or expense item.

Question 16

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Consulting revenues

Accepted Answer

Consulting revenues would appear in the Operating Revenue section of the income statement.

Question 17

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Bonds payable

Accepted Answer

Bonds payable would appear in the Long-term Liabilities section of the classified balance sheet.

Question 18

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Service revenues

Accepted Answer

Service revenues would appear under the Operating Revenue section of the income statement.

Question 19

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Accounts receivable

Accepted Answer

Accounts receivable would be classified as a current asset on the balance sheet. It represents amounts owed to the company by customers for goods or services sold on credit.

Answer: F
 Operating revenue would appear as a line item on the income statement, reflecting revenue generated from the company's primary business activities. Examples might include sales revenue or service fees earned.

Answer: G
 Operating expenses would also appear on the income statement, representing the costs associated with the company's primary business activities. Examples might include wages and salaries, rent, utilities, and cost of goods sold.

Answer: I
 Income taxes would also appear on the income statement, reflecting the amount of taxes owed to the government on the company's taxable income. This line item would typically be included in the "Other Revenue & Expenses" section of the income statement.

Question 20

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Buildings

Accepted Answer

Buildings would belong under the Property, Plant, & Equipment section of the classified balance sheet because they are a long-term asset. They would not be listed under Current Assets because they are not expected to be converted into cash within a year. Buildings would also not be listed under Current Liabilities, Long-term Liabilities, Stockholders' Equity, Operating Revenue, Operating Expenses, Other Revenue & Expenses, or Income Taxes.

Quiz 2: Financial Statements and the Annual Report

For each item listed, select the section of the balance sheet in which the item would be reported. -Computer available for resale

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Interest expense

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Borrowed cash using a six-month note

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Purchased inventory on account

For each item listed, select the section of the balance sheet in which the item would be reported. -Computer used within the business

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Cost of goods sold

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Capital stock

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Paid cash for supplies

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Borrowed cash using a long-term note

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Purchased land for cash

For each item listed, select the section of the balance sheet in which the item would be reported. -Bonds payable

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Income taxes payable

For each item listed, select the section of the balance sheet in which the item would be reported. -Interest payable

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Land

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Wages payable

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Consulting revenues

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Bonds payable

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Service revenues

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Accounts receivable

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Buildings