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1. Creditors' claims on the assets of a company are called: (Points : 2)
 
Net losses
Expenses
Revenues
Equity
Liabilities
 
2. The primary objective of financial accounting is: (Points : 2)
 
To serve the decision-making needs of internal users
To provide financial statements to help external users analyze and interpret an organization's activities
To monitor and control company activitiesTo provide information on both the costs and benefits of managing products and services
To know what, when and how muchto produce
 
3. Assets created by selling goods and services on credit are: (Points : 2)
 
Accounts payable
Accounts receivable
Liabilities
Expenses
 
4. The debt ratio is used: (Points : 2)
 
To measure the amount of equity relative to the expenses
To reflect the risk associated with a company's debts
Only by banks when a business applies for a loan
To determine how much debt a firm should pay off
 
5. Net Income: (Points : 2)
 
Decreases equity
Represents the amount of assets owners put into a business
Equals assets minus liabilities
Is the excess of revenues over expenses
Represents the owners' claims against assets
 
6. Internal users of accounting information include: (Points : 2)
 
Shareholders
Customers
Creditors
Government regulators
Line Supervisor
 
7. Risk is: (Points : 2)
 
Net income divided by average total assets
The reward for investment
The uncertainty about the expected return that will be earned from an investment
Unrelated to expected return
 
8. An example of an operating activity is: (Points : 2)
 
Paying wages
Purchasing office equipment
Borrowing money from a bank
Selling stock
Paying off a loan
 
9. Which accounting assumption assumes that all accounting information is reported monthly or yearly? (Points : 2)
 
Business entity assumption
Monetary unit assumption
Value assumption
Cost assumption
Time period assumption
 
10. Distributions of assets by a business to its stockholders are called: (Points : 2)
 
Dividends
Expenses
Assets
Retained earnings
Net Income

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Kritika Krishnakumar
Kritika KrishnakumarLv10
30 Jan 2021

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Related questions

Consider the following balance sheet:

BestCare HMO

Balance Sheet

June 30, 2011

(in thousands)

Assets

Current Assets:

Cash $2,737

Net premiums receivable 821

Supplies 387

Total current assets $3,945

Net property and equipment $5,924

Total assets $9,869

Liabilities and Net Assets

Accounts payable—medical

Services $2,145

Accrued expenses 929

Notes payable 382

Total current liabilities $3,456

Long-term debt $4,295

Total liabilities $7,751

Net assets—unrestricted

(equity) $2,118

Total liabilities and net

Assets $9,869

Consider the following financial statements for Green Valley Nursing Home, Inc. a for profit long-term care facility:

Green Valley Nursing Home Inc.
Balance Sheet
December 31, 2011
Assets
Current assets:
Cash $105,737
Marketable securities 200,000
Net patient accounts receivables 215,600
Supplies 87,655
Total current assets $608,992
Property and equipment $2,250,000
Less accumulated depreciation 356,000
Net property and equipment $1,894,000
Total assets $2,502,992
Liabilities and Shareholder?s Equity
Current liabilities:
Accounts payable $72,250
Accrued expenses 192,900
Notes payable 100,000
Current portion of long-term debt 80,000
Total current liabilities $445,150
Long term debt $1,700,000
Shareholders? Equity:
Common stock, $10 par value $100,000
Retained earnings 257,842
Total shareholder?s equity $357,842
Total liabilities and shareholders? equity $2,502,992

A. WHAT IS THE PRIMARY DIFFERENCE BETWEEN THESE 2 STATEMENTS

c. What was Green Valley's total debt ratio?*************************************
Current liabilities
LT liabilities
Total liabilities (debt)
Total assets
Total debt ratio

EXERCISE 15-8 Selected Financial Ratios (L015-2, LO15-3, L015-4] The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash.. Accounts receivable, net ................ Merchandise inventory ................. Prepaid expenses ..................... Total current assets ...................... Property and equipment, net ............... Total assets $ 6,500 35,000 70,000 3,500 115,000 185,000 $300,000 $ 50,000 80,000 130,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities .......... Bonds payable, 10% .......... Total liabilities ................. Stockholders' equity: Common stock, $5 per value ............. Retained earnings .... Total stockholders' equity ................. Total liabilities and equity ................. $ 30,000 140,000 170,000 $300,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales ..... Cost of goods sold... Gross margin Selling and administrative expenses......... Net operating income ....... Interest expense......................... Net income before taxes .................. Income taxes (30%) Net income ............ ................ $420,000 292,500 127,500 89,500 38,000 8,000 30,000 9,000 $ 21,000 Account balances at the beginning of the year were: accounts receivable, $25,000; and inven tory, $60,000. All sales were on account. EXERCISE 15-9 Financial Ratios for Assessing Profitability and Managing Debt [L015-4, LO15-5] Refer to the financial statements for Castile Products, Inc., in Exercise 15-8. Assets at the begin- ning of the year totaled $280,000, and the stockholders' equity totaled $161,600. Required: Compute the following: 1. Gross margin percentage. 2. Net profit margin percentage. 3. Return on total assets. 4. Return on equity. 5. Was financial leverage positive or negative for the year? Explain.

20 Points The Clark W Grizwald Holiday Company reported thefollowing financial information for its most recent fiscalyear:
Income Statement, for Fiscal Year 2013 Complete the following table:
(in millions)
Revenues $2,500 Return on assets
Cost of goods sold $1,000 Return on equity
Selling, general, and administrative expenses $255 Gross profit margin
Earnings before interest and taxes $1,245 Net profit margin
Interest expense $75 Equity multiplier
Earnings before taxes $1,170 Dividend yield
Taxes $75 Debt-equity ratio
Net income $1,095 Days sales outstanding
Inventory turnover
Balance Sheet, as of December 31, 2013 Receivables turnover
(in millions)
Cash and cash equivalents $65
Accounts receivable $55
Inventory $195
Net plant, property, and equipment $1,250
Intangible assets $100
Total assets $1,665
Current liabilities $165
Long-term debt $500
Shareholders' equity $1,350
Total liabilities and shareholders' equity $2,015
Additonal information available for the company isalso available:
(in millions)
Market value of equity $700
Market value of debt $400
Dividends $30
Number of shares outstanding 10

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