Question 1

For each item listed, select the section of the balance sheet in which the item would be reported.
-Retained earnings
A)Current Assets
B)Property.Plant, and Equipment
C)Current Liabilities
D)Long-term Liabilities
E)Stockholders' Equity

Accepted Answer

Retained earnings is a component of Stockholders' Equity and represents the accumulated profits of the company that have not been distributed as dividends to shareholders.

Question 2

Match the following characteristics with the statements about each qualitative characteristic's importance.
-The accounting information must be information that could affect a decision.
A)Consistency
B)Materiality
C)Conservatism
D)Comparability
E)Reliability
F)Relevance
G)Understandability

Accepted Answer

The characteristic of relevance requires that accounting information should have the ability to influence the decision-making process.

Question 3

For each item listed, select the section of the balance sheet in which the item would be reported.
-Equipment
A)Current Assets
B)Property.Plant, and Equipment
C)Current Liabilities
D)Long-term Liabilities
E)Stockholders' Equity

Accepted Answer

Equipment would be reported in the Property, Plant, and Equipment section of the balance sheet, as it is a long-term asset used in the operation of the company.

Question 4

Matching
Identify whether the following investor questions are associated with (a) primary or (b) secondary financial reporting objectives.
-Based on the financial information, should I buy shares of Apple?
A)primary financial reporting objective
B)secondary financial reporting objective

Accepted Answer

This investor question is associated with the primary financial reporting objective of making investment decisions.

Question 5

Match the following characteristics with the statements about each qualitative characteristic's importance.
-Users must be able to compare accounting information of a firm with its prior year information.
A)Consistency
B)Materiality
C)Conservatism
D)Comparability
E)Reliability
F)Relevance
G)Understandability

Accepted Answer

The answer of Match the following characteristics with the statements...

Question 6

Matching
Identify whether the following investor questions are associated with (a) primary or (b) secondary financial reporting objectives.
-Based on the financial information, should I sell my shares of Apple next quarter?
A)primary financial reporting objective
B)secondary financial reporting objective

Accepted Answer

The answer of Matching
Identify whether the following investor questions are...

Question 7

Matching
Identify whether the following investor questions are associated with (a) primary or (b) secondary financial reporting objectives.
-How much revenue will Apple generate during the time period in which I own the shares?
A)primary financial reporting objective
B)secondary financial reporting objective

Accepted Answer

The answer of Matching
Identify whether the following investor questions are...

Question 8

Match the following characteristics with the statements about each qualitative characteristic's importance.
-This quality allows users to analyze two or more companies and look for similarities and differences.
A)Consistency
B)Materiality
C)Conservatism
D)Comparability
E)Reliability
F)Relevance
G)Understandability

Accepted Answer

Comparability is the quality that allows users to analyze two or more companies and look for similarities and differences. It is important for making informed decisions and assessments.

Question 9

For each item listed, select the section of the balance sheet in which the item would be reported.
-Accounts receivable
A)Current Assets
B)Property.Plant, and Equipment
C)Current Liabilities
D)Long-term Liabilities
E)Stockholders' Equity

Accepted Answer

Accounts receivable is a current asset, representing the amount of money owed to the company by its customers for goods or services sold on credit. Therefore, it would be reported in the current assets section of the balance sheet.

Question 10

For each item listed, select the section of the balance sheet in which the item would be reported.
-Notes payable-due within one year
A)Current Assets
B)Property.Plant, and Equipment
C)Current Liabilities
D)Long-term Liabilities
E)Stockholders' Equity

Accepted Answer

Notes payable that are due within one year are typically reported as current liabilities on the balance sheet.

Question 11

For each item listed, select the section of the balance sheet in which the item would be reported.
-Capital stock
A)Current Assets
B)Property.Plant, and Equipment
C)Current Liabilities
D)Long-term Liabilities
E)Stockholders' Equity

Accepted Answer

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

Question 12

Matching
Identify whether the following investor questions are associated with (a) primary or (b) secondary financial reporting objectives.
-If I buy 50 shares of Apple, how much cash will I receive in dividends each year?
A)primary financial reporting objective
B)secondary financial reporting objective

Accepted Answer

The question about dividends relates to the secondary financial reporting objective, which involves providing information useful for making decisions about providing resources to the entity, such as assessing future cash flows.

Question 13

Match the following characteristics with the statements about each qualitative characteristic's importance.
-Accounting information must be verifiable and faithfully represent actual transactions.
A)Consistency
B)Materiality
C)Conservatism
D)Comparability
E)Reliability
F)Relevance
G)Understandability

Accepted Answer

"Verifiability" and "faithful representation" are both related to reliability, as reliability requires information to be verifiable and faithfully represent events. Therefore, the qualitative characteristic that is most important in this statement is reliability, which is represented by option E.

Question 14

For each item listed, select the section of the balance sheet in which the item would be reported.
-Accounts payable
A)Current Assets
B)Property.Plant, and Equipment
C)Current Liabilities
D)Long-term Liabilities
E)Stockholders' Equity

Accepted Answer

Accounts payable is a form of short-term debt owed by a company to its suppliers or vendors. Hence, it is reported in the current liabilities section of the balance sheet.

Question 15

For each item listed, select the section of the balance sheet in which the item would be reported.
-Interest payable
A)Current Assets
B)Property.Plant, and Equipment
C)Current Liabilities
D)Long-term Liabilities
E)Stockholders' Equity

Accepted Answer

Interest payable is a liability that represents the amount of interest that a company owes but has not yet paid. It is reported in the current liabilities section of the balance sheet.

Question 16

For each item listed, select the section of the balance sheet in which the item would be reported.
-Cash
A)Current Assets
B)Property.Plant, and Equipment
C)Current Liabilities
D)Long-term Liabilities
E)Stockholders' Equity

Accepted Answer

Cash is a current asset, which represents the amount of money a company currently has on hand or in a bank account that can be readily used for its operations. Therefore, it would be reported in the Current Assets section of the balance sheet.

Question 17

Match the following characteristics with the statements about each qualitative characteristic's importance.
-Those willing to spend the time should be provided with comprehensible accounting information.
A)Consistency
B)Materiality
C)Conservatism
D)Comparability
E)Reliability
F)Relevance
G)Understandability

Accepted Answer

Understandability is the qualitative characteristic that emphasizes that financial information should be presented in a manner that is easily understandable to users who have a reasonable knowledge of business and economic activities. In this statement, the importance is given to providing comprehensible accounting information to those who are willing to spend time, which relates to the understandability characteristic.

Question 18

Match the following characteristics with the statements about each qualitative characteristic's importance.
-Accounting information should use the least optimistic estimate.
A)Consistency
B)Materiality
C)Conservatism
D)Comparability
E)Reliability
F)Relevance
G)Understandability

Accepted Answer

Conservatism emphasizes the need for caution in financial reporting and requires that accounting information avoids overstating assets and revenues and understating liabilities and expenses. This is achieved by using the least optimistic estimate.

Question 19

For each item listed, select the section of the balance sheet in which the item would be reported.
-Land
A)Current Assets
B)Property.Plant, and Equipment
C)Current Liabilities
D)Long-term Liabilities
E)Stockholders' Equity

Accepted Answer

Land is a long-term asset and would be reported under property, plant, and equipment on the balance sheet.

Question 20

Match the following characteristics with the statements about each qualitative characteristic's importance.
-This quality refers to an amount large enough to affect a decision.
A)Consistency
B)Materiality
C)Conservatism
D)Comparability
E)Reliability
F)Relevance
G)Understandability

Accepted Answer

Materiality is the characteristic that refers to an amount large enough to affect a decision.

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. -Retained earnings

Match the following characteristics with the statements about each qualitative characteristic's importance. -The accounting information must be information that could affect a decision.

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

Matching Identify whether the following investor questions are associated with (a) primary or (b) secondary financial reporting objectives. -Based on the financial information, should I buy shares of Apple?

Match the following characteristics with the statements about each qualitative characteristic's importance. -Users must be able to compare accounting information of a firm with its prior year information.

Matching Identify whether the following investor questions are associated with (a) primary or (b) secondary financial reporting objectives. -Based on the financial information, should I sell my shares of Apple next quarter?

Matching Identify whether the following investor questions are associated with (a) primary or (b) secondary financial reporting objectives. -How much revenue will Apple generate during the time period in which I own the shares?

Match the following characteristics with the statements about each qualitative characteristic's importance. -This quality allows users to analyze two or more companies and look for similarities and differences.

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

For each item listed, select the section of the balance sheet in which the item would be reported. -Notes payable-due within one year

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

Matching Identify whether the following investor questions are associated with (a) primary or (b) secondary financial reporting objectives. -If I buy 50 shares of Apple, how much cash will I receive in dividends each year?

Match the following characteristics with the statements about each qualitative characteristic's importance. -Accounting information must be verifiable and faithfully represent actual transactions.

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

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

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

Match the following characteristics with the statements about each qualitative characteristic's importance. -Those willing to spend the time should be provided with comprehensible accounting information.

Match the following characteristics with the statements about each qualitative characteristic's importance. -Accounting information should use the least optimistic estimate.

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

Match the following characteristics with the statements about each qualitative characteristic's importance. -This quality refers to an amount large enough to affect a decision.