Bcor 3010 - Exam 1 100% Complete Solution

BCOR 3010 - Exam 1 100% COMPLETE SOLUTION Which branch of accounting focuses on providing information to investors and creditors to support investment and lending decisions? a. financial b. managerial c. tax d. audit e. accounting information systems - ANSWER a. Financial Companies in the United States follow accounting rules issued by the International Accounting Standards Board, as do other companies from most countries around the world. a. true b. false - ANSWER a. True Accounts Receivable represents: a. amounts owed by the company to vendors for products purchased b. amounts owed to the company by employees for payroll advances c. amounts owed to the company by customers for purchases on account d. cash payments in advance received from customers - ANSWER c. Amounts owed to the company by customers for purchases on account An obligation to deliver a product to a customer following a payment in advance is reported in the financial statement as: a. accounts payable b. revenue c. product liability d. unearned revenue e. prepaid expense - ANSWER d. Unearned Revenue During 2020, Acme Corp. paid $8,000 to a supplier for a purchase Acme made on account during the prior year. What effect will this $8,000 payment have one Acme's total assets in 2020? a. increase total assets b. decrease total assets c. no effect on total assets - ANSWER b. decrease total assets During 2020, Acme Corp. borrowed $10,000 from a bank. This loan will affect Acme's 2020 financial statements by increasing cash and a. increasing loans payable b. decreasing loans payable c. increasing loans receivable d. decreasing loans receivable - ANSWER a. increasing loans payable Which financial statement describes a company's financial position at a particular point in time? a. balance sheet b. income statement c. statement of cash flows - ANSWER a. balance sheet During 2020, Acme Corp. made $150,000 in cash payments to shareholders as dividends. In which section of the statement of cash flows will this cash flow appear? a. operating section b. investing section c. financing section - ANSWER c. financing section Total Liabilities Equation - ANSWER =Total liabilities and Equity - Contributed Capital - Retained Earnings Cash paid to suppliers for current and past inventory purchases equation - ANSWER =Cost of Goods Solds - (2020 inventory - 2019 inventory) + (2020 accounts payable - 2019 accounts payable) Cash received from customers - ANSWER =Sales Revenue + (2019 accounts receivable - 2020 accounts receivable) Cash paid to employees for wages - ANSWER =Wages Expense + (2019 Wages Payable - 2020 Wages Payable) Days Sales Outstanding Ratio - ANSWER Average of Accounts Receivable from 2019 and 2020 (add both numbers, divide by 2) * 365/Sales Revenue On Dec. 28, 2020, a customer called Acme, Inc., to order a shipment of 1,000 items for $10,000. Acme had 300 of the items already in stock and planned to manufacture the remaining 700 items in January 2021, before delivering the entire order on January 28, 2021. How much revenue will Acme recognize for this order during 2020? - ANSWER $0 (revenues when earned, have not been earned because order has not been delivered