Accounting Crash Course, Latest Expert Premium Update()|Brand New Exam Questions And (100%) Correct Answers, All Graded A+|Guaranteed Success

ACCOUNTING CRASH COURSE, LATEST EXPERT PREMIUM UPDATE()|BRAND NEW EXAM QUESTIONS AND (100%) CORRECT ANSWERS, ALL GRADED A+|GUARANTEED SUCCESS The regulating body that oversees the development of accounting standards in the U.S. is: SFAS GAAP FASB IASB - ANSWERFASB formulates accounting standards through the issuance of Statements of Financial Accounting Standards (SFAS). These statements make up the body of accounting rules known as the Generally Accepted Accounting Principles (GAAP). IASB oversees international financial reporting standards (IFRS). Which of the following statements is TRUE? GAAP requires that firms show recorded values for acquired intangible assets such as patents and trademarks on their financial statements. GAAP requires that firms show recorded values for intangible assets such as employee and customer loyalty. GAAP requires that financial statements accurately reflects the market value of internally-developed trademarks such as the value of the Coca-Cola brand name. All of the above. - ANSWERGAAP requires that firms show recorded values for acquired intangible assets such as patents and trademarks on their financial statements. GAAP requires that firms only show measurable activities, such as the value of acquired intangible assets. Assets such as employee, customer loyalty and internally-developed trademarks are not shown on financial statements because they're difficult to quantify. Which of the following statements is TRUE? Publicly traded US companies are required to file four 10-Q's and one 10-K annually. All US companies are required to file three 10-Q's and one 10-K annually. Publicly traded US companies are required to file three 10-Q's and one 10-K annually. Publicly traded US companies are required to file one 10-K annually; 10-Q's are typically filed but are technically voluntary. - ANSWERPublicly traded US companies are required to file three 10-Q's and one 10-K annually. Publicly-traded US companies must file three quarterly (10-Q) reports at the end of their 1Q, 2Q and 3Q, and a 10-K at the end of their fiscal year. he income statement is designed to measure: The liquidity of a firm. How solvent a company has been. The income of a firm at a point in time. Cash inflows/outflows generated over a period of time. The profits of a firm over a period of time. - ANSWERThe profits of a firm over a period of time. The income statement is designed to show the profitability of a business (revenues less expenses) over a period of time (usually a quarter or year). The income statement is an accrual measure of profits and thus not the best measure of cash flows. It is also a poor measure of a company's liquidity or solvency, which involves an analysis of a company's short term and long term assets and liabilities, respectively. The balance sheet is designed to show a firm's financial position, while the cash flow statement shows the amount of cash generated by a firm. The "matching principle" states that: Costs associated with making a product must be recognized at the end of the production process. Costs associated with making a product must be recognized immediately as incurred. Costs associated with making a product must be recognized during the same period as revenue generated from that product. Costs associated with making a product must be recorded during the same period as the sales, general, and administrative expenses that are also associated with the product. - ANSWERCosts associated with making a product must be recognized during the same period as revenue generated from that product. Jones Company has provided the following information: Cash sales totaled $255,000. Credit sales totaled $479,000. Interest income was $7,700. Interest expense was $19,900. Cost of goods sold was $336,000. Rent expense was $36,000. Salaries expense was $49,000. Other operating expenses totaled $79,000. How much was Jones' operating income? - ANSWER234,000 Operating revenues = $734,000 = $255,000 + $479,000. Operating expenses = $500,000 = $336,000 + $36,000 + $49,000 + $79,000. Operating income = $234,000 = $734,000 - $500,000. Which of the following statements is FALSE? Revenue is not recognized at the time of delivery of goods and services if cash is received after delivery of the goods and services. Collecting cash after delivery of a good or service does not create revenue on the income statement on the date of collection. Revenue is recognized at the time of delivery of the goods or services regardless of if cash is received. A liability is created when cash is received prior to delivery of the goods or services. - ANSWERRevenue is not recognized at the time of delivery of goods and services if cash is received after delivery of the goods and services. Revenue is recognized at the time of delivery of goods and services regardless of when the cash is received. Clayton Corp. has provided the following information: Gross profit was $620,000; Cost of goods sold was $380,000; Net income was $400,000. What was Clayton's gross profit margin? 40% 61.3% 62% 155% - ANSWER62% Gross profit ($620,000) equals sales (X) minus cost of goods sold ($380,000). Therefore, Sales = Gross profit ($620,000) plus Cost of goods sold ($380,000). Sales = $1,000,000. Gross profit percentage = Gross profit divided by Sales = $620,000 ÷ $1,000,000 = 62%.