On what basis are direct expenses assigned to departments?
> Commuters who have more than one passenger in the car are permitted to drive in a special lane on some highways while all the other motorists have to contend with stop-and-go traffic. Does this have anything to do with ethics? If so, then assess this sit
> How does a business executive demonstrate virtue when dealing with a disgruntled shareholder at the annual meeting?
> Assume that Firm A is a publicly-traded company that puts its financial statements on the web. This information can be accessed and read by anyone, even those who do not own shares of Firm A. This a free-rider situation, where an investor can use Firm A
> 1. Identify and explain the conflicts of interest referred to in this case. 2. What additional rules should the SEC make? 3. What should be included in the investor education that the settlement funds are earmarked for? 4. Was it appropriate for the New
> In the absence of any agreement between the partners, how must profits and losses be shared? If the partnership agreement specifies how profits are to be shared, but there is no agreement as to how losses are to be shared, what must be true with respect
> Describe the process followed when estimating bad debt expense under the percentage of sales method.
> How does the balance in Allowance for Doubtful Accounts before adjustment affect the amount of the year-end adjustment under the percentage of sales method? Under the percentage of receivables method?
> Identify three advantages of a partnership as compared with a sole proprietorship.
> Identify 11 essential provisions of a partnership agreement.
> Describe the accounting procedures when using the direct write-off method to account for uncollectible accounts.
> What are the four most commonly used methods of calculating depreciation for financial reporting purposes? How do they differ in their application?
> Explain how to compute net realizable value.
> Describe the steps to follow when using the allowance method to account for uncollectible accounts.
> What method of accounting for uncollectible accounts is generally required for financial reporting purposes?
> Describe the four accounting entries for the liquidation of a partnership.
> In the formula for calculating interest, how is time computed?
> What is the function of the trial balance?
> What is a footing?
> What does a debit balance in the cash short and over account represent? What does a credit balance in this account represent?
> At what two times would an entry be made affecting the change fund?
> From what source is the information obtained for issuing a check to replenish the petty cash fund?
> Describe the steps followed by the Financial Accounting Standards Board when developing an accounting standard.
> At what two times should the petty cash fund be replenished?
> What should be prepared every time a petty cash payment is made?
> What is the purpose of a petty cash fund?
> Name five common uses of electronic funds transfer.
> What two kinds of items on a bank reconciliation require journal entries?
> What are the three steps to follow in preparing a bank reconciliation?
> What are the most common reasons for differences between the book and bank cash balances?
> What are the three steps to follow in preparing a check?
> Who are the three parties to every check?
> What is the left side of the T account called? the right side?
> Under the allowance method, what impact does the write-off of a customer’s account have on the financial statements?
> What are the three major parts of a T account?
> Why must Work in Process Inventory be adjusted for factory overhead applied at year-end?
> How does the use of a perpetual inventory system affect the accounts on the work sheet?
> Why is the accounting for a manufacturing business more complicated than that for a merchandising business?
> For what three reasons is product cost information needed by a manufacturing business?
> What are the main differences between the financial statements of a manufacturing and a merchandising business?
> Describe the flow of materials, labor, and overhead into Work in Process.
> Describe and give three examples of factory overhead.
> Distinguish between direct and indirect labor.
> What are the two major types of materials, and how do they differ?
> Describe the process followed when estimating uncollectible accounts under the percentage (aging) of receivables method.
> What are the three primary elements of manufacturing cost?
> Distinguish between departmental gross profit, departmental operating income, and departmental direct operating margin.
> Why must management be cautious in interpreting departmental operating income results?
> What information is contained in a departmental operating expense summary?
> On what basis are indirect expenses allocated to departments?
> What is the difference between direct and indirect operating expenses?
> Why was the increase in FCI’s operating income so much greater than the increase in its net sales?
> What is the difference between a cost center and a profit center?
> Explain the procedure for verifying the accuracy of the statement of cash flows.
> List four items of information about each cash payment entered in the cash payments journal.
> Briefly describe five limitations of financial statement analysis.
> Identify the two market measures calculated by FCI.
> Identify the three primary components of return on common stockholders’ equity.
> In what ways can an income statement showing departmental direct operating margin be used by management?
> For what purposes are departmental reports useful to management?
> Identify three measures of the extent of leverage calculated by FCI.
> Identify four measures of profitability calculated by FCI.
> Identify three activity measures calculated by FCI.
> Identify three measures of liquidity calculated by FCI.
> List five ratios that are automatically provided by the vertical analysis of income statements.
> List the three steps followed under the gross profit method of estimating inventory.
> What were the main causes of the decrease in FCI’s current liabilities?
> Name the four principal financial statements comprising a full set of financial statements.
> Identify the two primary components of return on assets.
> What is the primary purpose of the statement of cash flows?
> What information is needed to prepare a statement of cash flows?
> Where is cash received for interest reported on the statement of cash flows?
> If a company pays cash dividends, where on the statement of cash flows should the payment be reported?
> How is Premium on Bonds Payable shown on the balance sheet? How is Discount on Bonds Payable shown?
> What accounts are affected when bonds are issued at face value?
> Explain the meaning of a bond price quotation of 95. Of 102.
> A firm is preparing to make adjusting entries at the end of the accounting period. The balance of the merchandise inventory account is $100,000. If the firm is using the perpetual inventory system, what does this balance represent?
> What are the three categories of cash flows shown on a statement of cash flows?
> Under the indirect method of preparing a statement of cash flows, what adjustment is made to net income if accounts receivable increased from last year?
> Under the indirect method of preparing a statement of cash flows, what adjustment is made to net income if accounts payable increased from last year?
> Who usually administers a bond sinking fund?
> Describe the direct method of reporting cash flows from operating activities.
> How is the periodic interest expense affected by the amortization of the discount on bonds payable?
> How is the periodic interest expense affected by the amortization of the premium on bonds payable?
> How is the amount of bond premium or discount to be amortized in a period determined using the straight-line method?
> Will a bond sell at a discount or at a premium if the stated rate is greater than the market rate on the bond? If the stated rate is less than the market rate?
> What is goodwill? When is it recognized?
> What does the difference between the totals of the Income Statement columns represent? What does the difference between the Balance Sheet columns totals represent?
> What is the function of a statement of owner’s equity?
> What are the two major sources of capital for every type of business?
> What is a trademark?
> How should the unamortized portion of the cost of a copyright be reported on the balance sheet?
> Over what period of time the cost of a patent should be allocated if its economic life is expected to be less than its legal life?
> Which depreciation method is similar to the method used to compute depletion expense?
> What is the purpose of depletion?
> How should the bond sinking fund be reported on the corporation balance sheet?
> How should sinking fund earnings be reported on the corporation income statement?
> When bonds are redeemed before maturity, how is the gain or loss on redemption determined? Why does the calculation differ for bonds issued at face value, at a premium, and at a discount?
> List the five steps taken to prepare a work sheet.
> Describe the differences between corporate bonds and stock from the standpoint of the issuing corporation.
> What effect does a stock dividend have on the accounts of the corporation? A stock split?
