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Exam 2: Financial Statements and the Annual Report

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Question 101

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Which one of the following is an investing activity of a business?

A) Paying for purchases of inventory
B) Issuing stock for cash
C) Borrowing money from a bank.
D) Purchasing a manufacturing plant for cash

E) B) and D)
F) None of the above

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Question 102

Multiple Choice

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Which one of the following is a financing activity of a business?

A) Paying for purchases of inventory
B) Issuing stock for cash
C) Paying salaries
D) Purchasing a manufacturing plant

E) A) and C)
F) B) and D)

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Question 103

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What information is provided in an annual report in addition to the financial statements?

Webb Company Selected data from the accounting records of Webb Company are listed below: Read the information about Webb Company.What is Webb's income from operations?

The preparation of financial statements requires that the information be understandable

Wood Company Wood Company has provided the following information from its accounting records for the current year: Read the information for Wood Corporation.What are Wood's current assets?

____________________ is the magnitude of an omission or misstatement in accounting information that will affect the judgment of someone relying on the information

Loren Corporation Listed below is information from the financial records of Loren Corporation at December 31,2014: Read the information about Loren Corporation. Required: Prepare the current liabilities section of the balance sheet for Loren Corp.at December 31,2014.You may omit the heading.If the amount of current liabilities were larger,what effect would this have on the current ratio?

Although businesses engage in a wide variety of activities,all of these activities can be categorized into three types.Which of the following choices best reflects these three types of business activities?