Acct 2000 Exam 1 LSU with verified detailed solutions

Acct 2000 Exam 1 LSU with verified detailed solutions ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




Classified Balance Sheet - correct answer✔✔Reports assets, liabilities, and equity at ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




specific point in time ||\\|//|| ||\\|//|| ||\\|//||




Operating Cycle - correct answer✔✔Average time it takes from purchase of inventory to ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




the collection of cash from customers
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Liquidity - correct answer✔✔Order in which assets are converted into cash ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




Order of Liquidity - correct answer✔✔cash, short term investments, acct receivable,
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inventory, supplies, prepaid insurance ||\\|//|| ||\\|//|| ||\\|//||




Accumulated depreciation - correct answer✔✔The total of depreciation that a company ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




has taken on assets (subtracted)
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Intangibles - correct answer✔✔Assets that do not have a physical substance yet ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




Ratio - correct answer✔✔Expresses the mathematical relationship between one quantity
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and another ||\\|//||




Probability ratio - correct answer✔✔Measures the income or operating success for a ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




company for given period of time ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




Working capital - correct answer✔✔Current assets minus current liabilities ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||

, Liquidity ratio - correct answer✔✔Measures the short-term ability of the company to pay ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




its maturing obligations and unexpected needs for cash
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Current ratio (liquidity) - correct answer✔✔Current assets/current liabilities
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Solvency ratio - correct answer✔✔Measures the ability of the company to survive over a ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




long period of time ||\\|//|| ||\\|//|| ||\\|//||




Debt to total assets - correct answer✔✔Total liabilities/total assets (lower number the
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better)



EPS (earnings per share) - correct answer✔✔Net income-preferred dividends/avg common
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shares



Generally Accepted Accounting Principles (GAAP) - correct answer✔✔Rules accountants ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




have to follow ||\\|//|| ||\\|//||




Securities and Exchange Commission (SEC) - correct answer✔✔Agency of US govt that ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




oversees US financial markets and accounting standard-setting bodies ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




Financial Accounting Standards Board (FASB) - correct answer✔✔Makes the rules that ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




appear on GAAP. Private organization ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




International Acct Standards Board (IASB) - correct answer✔✔Issues standards/makes the ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




rules for overseas countries ||\\|//|| ||\\|//|| ||\\|//||




Public Company Acct Oversight Board - correct answer✔✔Issue auditing standards and
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




review performance of audit firms ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||