Indiana University Bloomington

Which answer is not a liability? A. Unearned Revenue B. Accounts Payable C. Prepaid Expense D. Salaries Payable - Answer C. Prepaid Expense J&J pays their employees at the end of June for work done in June. Which of the following is true? A. This is an operating activity that decreases Cash and decreases Liabilities. B. This is an operating activity that decreases Cash and decreases Retained Earnings. C. This is a financing activity that decreases Cash and increases Expenses. D. T...

What are the 2 fundamental qualities of financial reporting? - Answer Faithful representation and Relevant Historical Cost includes: - Answer Land, prepaid assets, intangible assets with indefinite life Adjusted Historical Cost includes: - Answer Buildings, equipment, intangibles with limited lives Market value/Fair value includes: - Answer Many investments Net Realizable Value includes: - Answer Inventory or Accounts Receivable What is the revenue recognition princ...

capital structure - Answer mixture of debt and equity to finance operations debt - Answer borrowed from creditors equity - Answer invested by owners debt is _______ than equity bc - Answer risker: -debt payments are legal obligations -creditors can force bankruptcy -creditors can require sale of assets liabilities recorded at - Answer current cash equivalent current cash equivalent - Answer cash amount a creditor would accept to settle the liability immediatel...

2 primary functions of financial accounting - Answer 1. measure business activities of a company 2. communicate information about those activities to investors and creditors and other outside users for decision making purposes who has claims to a company's resources? - Answer investors and creditors corporation - Answer company legally separate from its owners - advantage is limited liability from stockholders being held responsible for financial obligations of a company - d...

Revenue Recognition Principle - Answer requires for revenues be recorded when... the company transfers goods and services to customers in the amount the company expects to receive Revenue is recognized when the ____________ ____________ is satisfied - Answer performance obligation Common incentives to motivate customers to buy their products and pay quickly for purchases include... - Answer credit cards, discounts, and returns Unavoidable fee - Answer the fee to use a credit...

In order to provide financial statement users with the most __________ and ___________ information about the firm's assets, liabilities, and therefore equity, US GAAP requires firms to ____________________________ assets and liabilities in the financial statements - Answer Relevant; faithfully represented; use a variety of different approaches to value What are the fundamental qualities of financial reporting? - Answer Financial reporting must be relevant and faithfully represented ...

Which of the following is true? a. Total fixed costs plus total variable costs will always equal total sales b. The contribution margin will always equal fixed costs plus net income c. Variable costs per unit will vary depending on the level of production d. Fixed costs per unit always stay the same - Answer b. The contribution margin will always equal fixed costs plus net income Variable costs expressed on a per unit basis: a. Should be ignored in making decisions since they cannot ...

Which of the following statements are true regarding stockholders? A. They are creditors of the company. B. They are owners of the company. C. They expect to receive interest on their investment. D. They expect to receive their investment back at a specified point in time. - Answer B. They are owners of the company Which of the following is correctly classified? A. Selling stock to stockholders is an investing cash flow. B. Paying for operations of the business is an investing cash f...

Managerial Accounting - Answer accounting used to provide information and analyses to managers inside the organization to assist them in decision making What three categories go into Product Costs? - Answer 1. Direct Materials-raw materials that go directly into the product 2. Direct Labor-all wages and benefits for employees working on the product 3. Manufacturing Overhead-utilities, insurance What are examples of Period Costs? - Answer 1. selling expenses-advertising, marketin...

Debt-to-equity Ratio: Leverage - Answer Average Total Liabilities/Average Stockholders' Equity Return On Equity(ROE)Ratio: Profitability - Answer Net Income/Average Stockholders' Equity Current Ratio: Solvency - Answer Current Assets/Current Liabilities Inventory Turnover Ratio: Asset Turnover - Answer Costs of Goods Sold/Average Inventory Earnings per Share: Other - Answer Net Income/# of shares outstanding -- required to be on financial statements Accounts R...