FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 3: The Balance Sheet and Financial Disclosures

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

Multiple Choice

Review LaterAdd Note

Review Later

The following partial balance sheet ($ in thousands) for Paisano Seafood Inc. is shown below. - Working capital is:

A) $505 thousand.
B) $265 thousand.
C) $185 thousand.
D) $75 thousand.

E) All of the above
F) None of the above

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

Listed below are ten terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -MD&A

A) Asset recorded when an expense is paid for in advance.
B) Goods to be sold in the ordinary course of business.
C) Transactions with owners, managers, and affiliated companies.
D) An intangible asset.
E) Management's views on significant events.
F) Net income less dividends since inception of the corporation.
G) Amounts due from customers.
H) Material events that occur after the end of the fiscal year and before the statements are issued.
I) Obligations to suppliers of merchandise or of services purchased on account.
J) Cash received from a customer in advance of providing a good or service.

K) A) and F)
L) C) and H)

Correct Answer

verified

Show Answer

Question 53

True/False

Review LaterAdd Note

All illegal acts should be disclosed in the notes to the financial statements.

Horizontal analysis involves expressing each item in the financial statements as a percentage of an appropriate total, or base amount, within the same year.

Which of the following is not a characteristic that defines a reportable operating segment according to U.S. GAAP?

Indicate whether each of the actions listed below will immediately increase (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is greater than 1.0 before the action is taken. -

Assume a company's liquidity ratios all are less than 1.0 before it purchases inventory on credit. When it makes the purchase:

An example of vertical analysis would be stating each individual asset as a percentage of total assets.

Listed below are four terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Vertical analysis

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Inventories

The condensed balance sheet and income statement for Marjoram Company are presented below. -Compute the acid-test ratio for Marjoram Company. Round your answer to two decimal places.

The following is the 2018 report of the independent registered public accounting firm that audited The Great Food Company, Inc., a large supermarket chain: In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, stockholders' deficit and comprehensive loss, and cash flows present fairly, in all material respects, the financial position of The Great Food Company, Inc. and its subsidiaries (debtor-in-possession) at December 31, 2018, and December 31, 2017, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, the Company is currently operating pursuant to a Chapter 11 bankruptcy filing which, together with the uncertain outcomes of the matters discussed in Note 1 to the consolidated financial statements, raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for share lending arrangements during fiscal 2017. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, the Company is currently operating pursuant to a Chapter 11 bankruptcy filing which, together with the uncertain outcomes of the matters discussed in Note 1 to the consolidated financial statements, raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for share lending arrangements during fiscal 2017. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Required. Interpret the main points indicated in this report by Great Food’s auditors.

Working capital is equal to:

Assets do not include:

Spartan Sportswear's current assets consist of cash, marketable securities, accounts receivable, and inventories. The following data were abstracted from a recent financial statement: Required: Compute the following for Spartan: -Long-term liabilities

The following partial balance sheet ($ in thousands) for Paisano Seafood Inc. is shown below. - Quick assets total:

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Current liabilities

Which of the following is not used when analyzing long-term solvency?

Spartan Sportswear's current assets consist of cash, marketable securities, accounts receivable, and inventories. The following data were abstracted from a recent financial statement: Required: Compute the following for Spartan: -Shareholders' equity

The balance sheet for Altoid Co. is shown below. Required: Compute the following financial statement ratios for 2018: -Altoid Co.'s acid-test ratio. Round your answer to two decimal places.