An advantage of using the periodic inventory system is that it requires less record keeping than the perpetual inventory system.
· Question 21 The revenue recognition principle dictates that revenue be recognized i n the accounting period in which the performance obligation is satisfie d.
· Question 22 Lankston Company began the year by issuing $ 90,000 of common stoc k for cash. The company recorded revenues of $ 825,000, expenses of $ 720,000, and paid dividends of $ 45,000. What was Lankston‘ s net inco me for the year?
· Question 23 The multiplestep income statement is considered more useful than the singlestep income statement because it highlights the components of net inco me.
· Question 24 Use the following data to calculate the current ratio. Carne Auto Supplies Balance Sheet December 31, 2014
Cash |
$ |
35,000 |
Accounts payable |
$ 65,000 Accounts receivable |
50,000 |
Salaries and wages pa |
yable |
10,000 |
Inventory |
70,000 |
Mortgage payable |
90,000 Prepaid insurance |
40,000 |
Total liabilities |
$ 165,000 |
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