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Exam 2: The Balance Sheet

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Question 51

True/False

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A summary of account names and account numbers is kept by a company in the table of contents of its annual report.

A) True
B) False

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Question 52

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The MegaBuck movie studio's name has become famous for adventure movies.Another studio once offered to buy the name for $20 million,but MegaBuck turned down the offer.The MegaBuck balance sheet will show:

A) The company's name under Other Assets,valued at $20 million.
B) The company's name under Other Assets,valued conservatively at $10 million.
C) The company's name under Accounts Receivable,valued at $20 million.
D) The company's name will not be shown as an asset on the balance sheet.

E) A) and B)
F) None of the above

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Question 53

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Any item on a balance sheet labelled payable is a liability of that company.

If total liabilities decreased by $25,000 and shareholders' equity increased by $5,000 during a period of time,then total assets must change by what amount and direction during the same time period?

For each of the following,indicate how the line item would be categorized on a classified balance sheet. CA (current asset) LTA (long-term asset) CL (current liability) LTL (long-term liability) SE (shareholders' equity) ____ Property and Equipment ____ Contributed Capital ____ Accrued Liabilities ____ Supplies ____ Deferred Revenue ____ Retained Earnings ____ Wages Payable ____ Accounts Receivable ____ Inventory ____ Bonds Payable ____ Accounts Payable

When dealing with claims on company assets,:

Under the rules governing ASPE and IFRS,companies must list liabilities in order of maturity.

A company receives $10 million cash from investors in exchange for new common stock.Several weeks later,the company buys a $25 million machinery using all of the cash from the stock issue and signing a promissory note for the remainder.The accounts involved in these two transactions are:

A public company following IFRS is entitled to set aside the cost principle.

Which of the following would not be recorded as an identifiable accounting transaction?

Consider the data in the Inventories T-account shown below and the partial listing of account balances at the end of the year. $\begin{array}{l}\text { Irventories }\\\begin{array} { | l | r | l | r | } \hline \text { Begirning } & & & \\\hline \text { Balarice } & 187,500 & & \\\hline & & & \\\hline & & & \\\hline & 104,900 & \\\hline & 63,900 & & 18,000 \\\hline & & & 5,400 \\\hline & & & 14,700 \\\hline & & & 19,200 \\\hline \end{array}\end{array}$ Partial listing of account balances at the end of the year: $\begin{array}{|l|r|}\hline \text { Cash } & \$ 28,000 \\\hline \text { Accounts Receivable } & 35,600 \\\hline \text { Inventories } & ? \\\hline \text { Other Current Assets } & 5,900\\\hline\end{array}$ The amount of Total Current Assets that would be reported on the company's balance sheet at the end of the year would be:

Assets are typically listed on the balance sheet in order of how soon they are used or quickly they can be turned into cash.

On January 1,2018,Yukon Inc.,had assets of $156,000 and shareholders's equity of $88,000.During the year assets increased by $35,000 and shareholders's equity decreased by $27,500.What were the liabilities on December 31,2018?

Use the following information as of December 31,2018 to calculate the amounts of cash and retained earnings.The company's total assets are $36,000.This company doesn't have other accounts.

When analyzing transactions and exploring their financial effects,journals are used to:

Transactions include which two types of events?

A credit to an asset account will cause a decrease in assets on the financial statements.

The Sweet Smell of Success Fragrance Company borrowed $60,000 from the bank and used all of the money to re-design its new store.Sweet Smell's balance sheet would show this as:

If no transactions were posted to a particular asset,liability,or shareholders' equity account during a period then:

If a company uses $100 million in cash to pay off debt,its shareholders' equity will increase by $100 million.