ACC 201 Exam Prep | Questions with 100%
Correct Solutions
long term investments - Answer are expected to be held for more than one year or the
operating cycle.
Examples: notes receivable and investments in stocks and bonds expected to be held for
more than the longer of one year or the operating cycle.
plant assets - Answer are tangible long-lived assets used to produce or sell products and
services.
Examples: equipment, machinery, buildings, and land that are used to sell products and
services.
Also called property, plant, and equipment (PP&E) or fixed assets.
tangible assets - Answer are long-term assets used to produce or sell products and
services and that lack physical form.
Examples: patents, trademarks, copyrights, franchises, and goodwill.
current liabilities - Answer are liabilities due within the longer of one year or the
company's operating cycle.
Examples: accounts payable, wages payable, taxes payable, interest payable, and
unearned revenues.
long term liabilities - Answer are liabilities not due within the longer of one year or the
company's operating cycle.
Examples: notes payable, mortgages payable, bonds payable, and lease obligations.
equity - Answer owner's claim on the assets.
, For a corporation, reported in retained earnings and common stock accounts.
Equity is not separated into current and noncurrent categories.
profit margin ratio definition - Answer ____________ measures the company's net
income to net sales.
profit margin calculation - Answer Net income
____________________________
Net sales
current ratio definition - Answer Helps assess the company's ability to pay its debts in
the near future
current ratio calculation - Answer Current assets
-------------------------
Current liabilities
Service companies sell_____________ to earn revenue. - Answer time
Merchandising companies sell _________ to earn revenue. - Answer products
Operating Cycle for a Merchandiser - Answer purchases
merchandise invintory
credit sales
accounts recievable
cash collection
Correct Solutions
long term investments - Answer are expected to be held for more than one year or the
operating cycle.
Examples: notes receivable and investments in stocks and bonds expected to be held for
more than the longer of one year or the operating cycle.
plant assets - Answer are tangible long-lived assets used to produce or sell products and
services.
Examples: equipment, machinery, buildings, and land that are used to sell products and
services.
Also called property, plant, and equipment (PP&E) or fixed assets.
tangible assets - Answer are long-term assets used to produce or sell products and
services and that lack physical form.
Examples: patents, trademarks, copyrights, franchises, and goodwill.
current liabilities - Answer are liabilities due within the longer of one year or the
company's operating cycle.
Examples: accounts payable, wages payable, taxes payable, interest payable, and
unearned revenues.
long term liabilities - Answer are liabilities not due within the longer of one year or the
company's operating cycle.
Examples: notes payable, mortgages payable, bonds payable, and lease obligations.
equity - Answer owner's claim on the assets.
, For a corporation, reported in retained earnings and common stock accounts.
Equity is not separated into current and noncurrent categories.
profit margin ratio definition - Answer ____________ measures the company's net
income to net sales.
profit margin calculation - Answer Net income
____________________________
Net sales
current ratio definition - Answer Helps assess the company's ability to pay its debts in
the near future
current ratio calculation - Answer Current assets
-------------------------
Current liabilities
Service companies sell_____________ to earn revenue. - Answer time
Merchandising companies sell _________ to earn revenue. - Answer products
Operating Cycle for a Merchandiser - Answer purchases
merchandise invintory
credit sales
accounts recievable
cash collection
