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Exam 5: Communicating and Interpreting Accounting Information

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Question 51

Multiple Choice

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Which of the following is not included as a primary part of the financial disclosure in Form 10-K?

A) Summarized financial data for a 5-year period.
B) Management's opinion of the financial statements.
C) Business operations and strategy.
D) Four basic financial statements.

E) C) and D)
F) A) and B)

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Question 52

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The primary responsibility for the information in a corporation's financial statements lies with the chief executive officer (CEO)and the chief financial officer (CFO).

A) True
B) False

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Question 53

Multiple Choice

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Which of the following is not reported as an operating expense on the income statement?

Anthony Inc.reported the following amounts on its 2018 and 2019 income statements: A.Compute the gross profit percentage for years 2018 and 2019. B.Provide at least two potential causes for the change in Anthony's gross profit percentage.

The Nellie Company has provided the following information: Operating expenses were $115,000; Gross profit was $629,000; Cost of goods sold was $470,000; Interest expense was $17,000; Income tax expense was $199,000. - What was Nellie's income before taxes?

Twin Lakes,Inc.reported the following December 31 amounts in its financial statements: Compute the following for the 2019 ratios: A.Gross profit percentage B.Net profit margin C.Total asset turnover D.Return on assets

The return on assets ratio is affected by both the net profit margin ratio and the total asset turnover ratio.

Anjou Company had 10,000 shares of common stock outstanding at December 31,2018 and 14,000 shares of common stock outstanding at December 31,2019.Anjou had sales of $3,600,000 in 2019 and net income of $280,000 in 2019.What is the earnings per share amount reported for Anjou in 2019?

Which of the following statements is true?

Which of the following would be reported in the supplemental cash flows disclosure section of the statement of cash flows?

Information disclosed in a balance sheet about shares of common stock includes the number of shares that are:

Marino Company has provided the following information: Net sales,$480,000 Net income,$24,000 Average total assets,$200,000 - What is Marino's return on assets?

The mission of the Securities & Exchange Commission (SEC)is to develop generally accepted accounting principles.

The Willie Company has provided the following information: Operating expenses were $345,000; Income from operations was $415,000; Net sales were $1,100,000; Interest expense was $71,000; Loss from sale of investments was $87,000; Income tax expense was $58,000. - What was Willie's gross profit?

The essence of reporting the gains on sales of investments separately on an income statement is that they are not part of the primary operations of the reporting company.

The Securities & Exchange Commission (SEC)oversees the work of the Financial Accounting Standards Board (FASB).

The gross profit percentage decreases when operating expenses increase.

The Willie Company has provided the following information: Operating expenses were $345,000; Income from operations was $415,000; Net sales were $1,100,000; Interest expense was $71,000; Loss from sale of investments was $87,000; Income tax expense was $58,000. - What was Willie's income before taxes?

Complete the following balance sheet by entering the appropriate amounts in the blanks provided.

Components of other comprehensive income can be reported in combination with the: