ACTG 210 Ch 2 Test With
Correct Answers
Using the following balance sheet and income statement data, what is the
current ratio?
Current Assets: $21,000
Current Liabilities: $12,000
Average assets: $132,000
Total assets: $90,000
Average common shares outstanding was: $15,000
Net Income: $45,000
Stockholders' Equity: $63,000
Total Liabilities: $27,000 - ANSWER 1.75:1
The economic entity assumption states that economic events ... ? - ANSWER
of every entity can be separately identified and accounted for
An item is considered material if...? - ANSWER Its size is likely to influence
the decision of an investor or creditor
Use the data to determine the total dollar amount of assets to be classified as
current assets
Cash $126,000
, A/R $120,000
Inventory $210,000
Prepaid insurance 90000
Stock investments 255,000
land 285,000
buildings 339,000
Building depreciation (60,000) --> total = 279,000
trademarks 210,000
Total assets = $1,050,000
A/P 165,000
salaries payable 30,000
mortgage payable 270,000
total liabilities= $465,000
Common Stock 360,000
retained earnings 750,000
total stockholders equity: $1,110,000
Total liabilities and stockholders equity: 1,575,000 - ANSWER $546,000
Correct Answers
Using the following balance sheet and income statement data, what is the
current ratio?
Current Assets: $21,000
Current Liabilities: $12,000
Average assets: $132,000
Total assets: $90,000
Average common shares outstanding was: $15,000
Net Income: $45,000
Stockholders' Equity: $63,000
Total Liabilities: $27,000 - ANSWER 1.75:1
The economic entity assumption states that economic events ... ? - ANSWER
of every entity can be separately identified and accounted for
An item is considered material if...? - ANSWER Its size is likely to influence
the decision of an investor or creditor
Use the data to determine the total dollar amount of assets to be classified as
current assets
Cash $126,000
, A/R $120,000
Inventory $210,000
Prepaid insurance 90000
Stock investments 255,000
land 285,000
buildings 339,000
Building depreciation (60,000) --> total = 279,000
trademarks 210,000
Total assets = $1,050,000
A/P 165,000
salaries payable 30,000
mortgage payable 270,000
total liabilities= $465,000
Common Stock 360,000
retained earnings 750,000
total stockholders equity: $1,110,000
Total liabilities and stockholders equity: 1,575,000 - ANSWER $546,000
