Balance Sheet quiz

 

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Balance Sheet

30 questions in 30 minutes

Pass Score 70%

The questions change when you repeat the exam

1 / 30

The average number of days that it takes to turn raw materials into cash proceeds is a firm's :

2 / 30

Which of the following is most likely an essential characteristic of an asset ?

3 / 30

How should the proceeds received from the advance sale of tickets to a sporting event be treated by the seller, assuming the tickets are nonrefundable ?

4 / 30

Which of the following characteristics are required for recognition of a balance sheet asset ?

Characteristic #1: Future economic benefits to the firm are probable.

Characteristic #2: The asset is tangible and is obtained at a cost.

5 / 30

The balance sheet is most likely to provide an analyst with information about a firm's :

6 / 30

A key limitation of balance sheets in financial analysis is that :

7 / 30

Century Company’s balance sheet follows :

Century company Balance sheet  (in millions)
2023 2022
Current assets 340 280
Noncurrent assets 660 630
Total assets  1000 910
Current liabilities 170 110
Noncurrent liabilities 50 50
Total liabilities 220 160
Equity 780 750
Total liabilities and equity 1000 910

Century’s balance sheet presentation is known as :

8 / 30

Under U.S. GAAP, land owned by the firm is most likely to be reported on the balance sheet at :

9 / 30

Earlier this year, Ponca Corporation purchased non-dividend paying equity securities which it classified as trading securities. Information related to the securities follows :

Fair value at year-end Cost Security
$435,000 $400,000 
$545,000 $550,000 

What amounts should Ponca report in its year-end income statement and balance sheet as a result of its investment in securities X and Y ?

10 / 30

 Given the following income statement and balance sheet for a company :

Balance Sheet
Year 2023 Year 2022
 : Assets
450 500 Cash
660 600 Accounts Receivable
550 500 Inventory
1660 1600 Total CA
1250 1000 Plant, prop. equip
2910 2600 Total Assets
: Liabilities
550 500 Accounts Payable
1002 700 Long term debt
1552 1200 Total liabilities
: Equity
538 400 Common Stock
820 1000 Retained Earnings
2910 2600 Total Liabilities & Equity
Income Statement
3000 Sales
- 1000 Cost of Goods Sold
2000 Gross Profit
- 500 SG&A
- 151 Interest Expense
1349 EBT
- 405 Taxes (30%)
944 Net Income

What is the current ratio for 2023 ?

11 / 30

The following data is from Delta's common size financial statement:

Earnings after taxes 18 %
Equity 40 %
Current assets 60 %
Current liabilities 30 %
Sales $ 300
Total assets $ 1,400

What is Delta's total liabilities to equity ratio ?

12 / 30

Liabilities are best described as :

13 / 30

At the beginning of the year, Parent Company purchased all 500,000 shares of Sub Incorporated for $15 per share. Just before the acquisition date, Sub’s balance sheet reported net assets of $6 million. Parent determined the fair value of Sub’s property and equipment was $1 million higher than reported by Sub. What amount of goodwill should Parent report as a result of its acquisition of Sub ?

14 / 30

GTO Corporation purchased all of the common stock of Charger Company for $4 million. At the time, Charger reported total assets of $3 million and total liabilities of $1 million. At the acquisition date, the fair value of Charger's assets was $3.5 million and the fair value of Charger's liabilities was $1.3 million. What amount of goodwill should GTO report as a result of the acquisition and is it necessary for GTO to amortize the goodwill ?

15 / 30

Which of the following statements about analyzing the balance sheet is most accurate ?

16 / 30

Which of the following ratios are used to measure a firm’s liquidity and solvency ?

17 / 30

According to International Financial Reporting Standards, how do cash dividends received from trading securities and financial securities measured at fair value through OCI affect net income?

18 / 30

An analyst has gathered the following information about a company :

Balance Sheet
Assets :
100 Cash
750 Accounts Receivable
300 Marketable Securities
850 Inventory
900 Property, Plant & Equip
-150 Accumulated Depreciation
2750 Total Assets 
Liabilities and Equity :
300 Accounts Payable
130 Short-Term Debt
700 Long-Term Debt
1000 Common Stock
620 Retained Earnings
2750 Total Liab. and Stockholder's equity


Income Statement
1500 Sales
1100 COGS
400 Gross Profit
150 SG&A
250 Operating Profit
25 Interest Expense
75 Taxes
150 Net Income 

What is the quick ratio ?

19 / 30

Under IFRS, a firm may report the value of property, plant, and equipment using :

20 / 30

Two of the elements of a balance sheet are :

21 / 30

A classified balance sheet categorizes assets and liabilities based on whether they are :

22 / 30

At the beginning of the year, Alpha Corporation, which reports under U.S. GAAP, purchased 10,000 shares of Beta Corporation for $20 per share. During the year, Beta paid a $2,000 cash dividend to Alpha. At the end of the year, Beta's stock was selling for $22 per share. What amount should Alpha recognize in its year-end income statement if the investment is treated as an available-for-sale security and what amount should be recognized in the income statement if the investment is treated as a trading security ?

23 / 30

Duster Company reported the following financial information at the end of 2022 :

in millions
240 Unearned revenue
30 Common stock at par
440 Capital in excess of par
1,150 Accounts payable
2,000 Treasury stock
5,160 Retained earnings
830 Accrued expenses
210 Accumulated other comprehensive loss
1,570 Long-term debt

Calculate Duster's liabilities and stockholders' equity as of December 31, 2022.

24 / 30

A liquidity-based balance sheet, on which assets and liabilities are not classified as current or non-current, is permitted under :

25 / 30

Which of the following inventory valuation methods is required by the accounting standard setting bodies ?

26 / 30

Miller Corporation has 160,000 shares of common stock authorized. There are 92,000 shares issued and 84,000 shares outstanding. How many shares of treasury stock does Miller own ?

27 / 30

Galaxy Corporation manufactures custom motorcycles. Galaxy finances the motorcycles over 36 months for customers who make a minimum down payment of 10%. Historically, Galaxy has experienced bad debt losses equal to 1% of sales. Galaxy also provides a 24 month unlimited warranty on all new motorcycles. In the past, warranty expense has averaged 3% of sales. Ignoring taxes, how does the recognition of bad debt expense and warranty expense at the time of sale affect Galaxy's liabilities ?

28 / 30

A company that reports under IFRS has developed a new product which required research costs of $2 million and development costs of $3 million. The maximum amount the company can record as the value of the new product on its balance sheet is :

29 / 30

Earlier this year, Slayton Corporation repurchased 5% of its total shares outstanding. At the time, the book value of Slayton shares exceeded their market value. The shares are expected to be reissued in the future when the market price of Slayton's stock increases. Do Slayton's repurchased shares continue to have voting rights and to pay cash dividends ?

30 / 30

Carpenter Corporation reported the following statement of shareholders' equity as of December 31, 2022 :

$600,000 Common stock at par
900,000 Additional paid-in-capital
- 200,000 Treasury stock
10,500,000 Retained earnings
450,000 Accumulated other comprehensive income
$12,250,000

During 2023, Carpenter:

1- earned net income of $1,700,000.

2- declared dividends of $300,000. $75,000 of the dividends remain unpaid.

3- purchased held-to-maturity securities for $100,000. The securities have a fair value of $110,000 at year-end.

4- purchased available-for-sale securities for $250,000. The securities have a fair value of $225,000 at year-end.

5- translated the financial statements of a foreign subsidiary and calculated a $90,000 unrealized gain.

6- purchased treasury stock for $75,000. The stock was valued at $60,000 when issued.

Calculate Carpenter's accumulated other comprehensive income as of December 31, 2023.

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