ACG 3131 Q&A Exam Bundle

NRV less normal profit margin The floor to be used in applying the lower-of-cost-or-market method to inventory is determined as the NRV When inventory declines in value below original (historical) cost, and this decline is considered other than temporary, what is the maximum amount that the invento...

The income statement can be used to assess liquidity. solvency. creditworthiness. all of these answer choices are correct. C Which of the following occur from peripheral or incidental transactions? Operating expenses. Gain on the sale of equipment. Sales revenue. Cost of goods sold. B Whic...

Additions increase or extension of existing assets, such as adding a wing to a hospital. Companies capitalize any addition to plant assets because a new asset is created. Avoidable interest the amount of interest cost in a period that a company could theoretically avoid if it had not made expenditu...

Avg days to sell inv A measure that represents the average number of days' sales for which inventory is on hand. A variant of the inventory turnover, it is computed by dividing the inventory turnover by the number of days in the year (365 or sometimes for simplicity, 360). Conv retail inv method A...

Cash -Most liquid asset -Standard medium of exchange -Basis for measuring and accounting for all items -Current asset -Examples: coin, currency, available funds on deposit at the bank, money orders, certified checks, cashier's checks, personal checks, bank drafts and savings accounts. Cash equival...

Cash -Most liquid asset -Standard medium of exchange -Basis for measuring and accounting for all items -Current asset -Examples: coin, currency, available funds on deposit at the bank, money orders, certified checks, cashier's checks, personal checks, bank drafts and savings accounts Cash equivale...

Relevance/Faithful Representation Two fundamental qualities that make accounting information useful for decision making purposes. Relevance Information that is capable of making a difference in a decision is said to have this fundamental quality. Faithful Representation Information that is complet...

Events that directly affect the company: economic event Exchange between a company and another entity: (Example: purchase inventory, borrow from bank, pay salaries to EE). external event Customized software systems that integrates all departments and functions across a company into one system: Ent...

The income statement can be used to assess A. liquidity. B. solvency. C. creditworthiness. D. All of these answer choices are correct. C. The business and investment community uses the income statement to determine profitability, investment value, and creditworthiness. The ________ approach focuse...

Amount/timing/uncertainty The income statement is important because it provides investors and creditors with information that helps them predict the _______, ________, and ___________ of future cash flows. It helps investors and creditors predict future cash flows in a number of different ways. Inc...

1. Income Statement 2. Balance Sheet 3. Statement of Cash Flows 4. Statement of Shareholder's Equity Name the (4) financial statements: Cash basis accounting measurement of cash receipts and cash payments. The difference is the *net operating cash flow.* Accrual basis accounting measurement of re...

During 2017, Bay Co. constructed machinery for its own use and for sale to customers. Bank loans financed these assets both during construction and after construction was complete. How much of the interest incurred should be reported as interest expense in the 2017 Income Statement? Interest incurr...

Faithful Representation One of the qualitative characteristics of accounting information that is complete, free from error, and neutral. Confirmatory Value One of the ingredients of the fundamental quality of relevance which helps to confirm or correct prior expectations based on previous evaluatio...

Accounting Principles Board (APB) Private standard-setting organization from 1959 to 1973, whose mission was to develop an overall conceptual framework. Its official pronouncements, called APB Opinions, were to be based mainly on research studies and be supported by reasons and analysis. The APB iss...