· Question 13
Solvency ratios measure the short-term ability of the company to pay its maturing
obligations.
· Question 14
The best definition of assets is the
· Question 15
The partnership form of business organization
· Question 16
Goods that have been purchased FOB destination but are in transit, should be excluded
from a physical count of goods by the buyer.
· Question 17
Management may choose any inventory costing method it desires as long as the cost flow
assumption chosen is consistent with the physical movement of goods in the company.
· Question 18
Which of the following would not be classified as a long-term liability?
· Question 19
The economic resources that are owned by a business are called stockholders‘ equity.
· Question 20
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 in the accounting
period in which the performance obligation is satisfied.
· Question 22
Lankston Company began the year by issuing $90,000 of common stock for cash. The
company recorded revenues of $825,000, expenses of $720,000, and paid dividends of
$45,000. What was Lankston‘s net income for the year?
· Question 23
The multiple-step income statement is considered more useful than the single-step income
statement because it highlights the components of net income.
· Question 24
Use the following data to calculate the current ratio.
Carne Auto Supplies
Balance Sheet
December 31, 2014