Grading Summary These are the automatically computed results of your exam Grades for essay questions and comments from your instructor are in the Details section below Date Taken Time Spent Points Received 1 h 41 min 28 secs 149 150 Of Questions Correct 30 2 30 N A Question Type Multiple Choice Essay Grade Details All Questions Page 1 2 3 1 Question TCO A B C External users want answers to all of the following questions except Student Answer Is the company earning satisfactory income Will the company be able to pay its debts as they come due Did the company use a budget to plan its expenses How does the company compare in profitability with competitors Instructor Explanation Chapter 1 page 6 Points Received 3 of 3 Comments 2 Question TCO C Borrowing money is an example of a n Student Answer delivering activity financing activity investing activity operating activity Instructor Explanation Chapter 1 page 9 Points Received 3 of 3 Comments 3 Question TCO C Buying and selling products are examples of Student Answer operating activities investing activities financing activities delivering activities Instructor Explanation Chapter 1 page 10 Points Received 3 of 3 Comments liabilities assets revenues Instructor Explanation Chapter 1 page 9 Points Received 3 of 3 Comments 4 Question TCO A Resources owned by a business are referred to as Student Answer stockholders equity 5 Question TCO C Jamie Company recorded the following cash transactions for the year Paid 70 000 for salaries Paid 20 000 to purchase office equipment Paid 6 000 for utilities Paid 7 000 in dividends Collected 130 000 from customers What was Jamie s net cash provided by operating activities Student Answer 47 000 54 000 27 000 33 000 Instructor Explanation 130 000 70 000 6 000 54 000 Chapter 1 page 10 Points Received 3 of 3 Comments 6 Question Student Answer TCO A In a classified balance sheet assets are usually classified as current assets long term assets property plant and equipment and tangible assets current assets long term investments property plant and equipment and common stocks current assets long term investments and tangible assets current assets long term investments property plant and equipment and intangible assets Instructor Explanation Chapter 2 page 49 Points Received 3 of 3 Comments 7 Question TCO A An intangible asset Student Answer may have the capacity to earn revenue for its owner is worthless because it has no physical substance is converted into a tangible asset during the operating cycle cannot be reported on the balance sheet because it lacks physical substance Instructor Explanation Chapter 2 page 51 Points Received 3 of 3 Comments 8 Question TCO A These are selected account balances on December 31 2010 Land location of the corporation s office building 50 000 Land held for future use 75 000 Corporate Office Building 300 000 Inventory 100 000 Equipment 225 000 Office Furniture 50 000 Accumulated Depreciation 150 000 What is the total NET amount of property plant and equipment that will appear on the balance sheet Student Answer 650 000 550 000 475 000 Instructor Explanation Gross cost of plant assets utilized accumulated depreciation Chapter 2 page 51 800 000 Points Received 3 of 3 Comments 9 Question Student Answer TCO B For 2010 Ford Corporation reported net income of 15 000 net sales 200 000 and average share outstanding 6 000 There were no preferred stock dividends What was the 2010 earnings per share Instructor Explanation 15 000 6 000 2 50 Chapter 2 page 56 Points Received 3 of 3 Comments 10 Question Student Answer TCO B Morten Corporation had beginning retained earnings of 764 000 and ending retained earnings of 833 000 During the year they issued common stock totaling 47 000 There were no dividends issued What was their net income for the year 2 33 0 10 2 50 33 34 69 000 22 000 116 000 91 000 Instructor Explanation 833 000 764 000 69 000 Chapter 2 page 57 Points Received 3 of 3 Comments 11 Question TCO D Is the purchase of equipment treated as an expense at the time of purchase Why or why not Student Answer No GAAP requires that 10 of the cost be expensed each year This minimizes attempts to mislead financial statement users Yes the matching principle requires that the cost be expensed in the period of purchase No the cost needs to be allocated to the years of expected use Yes the actual life of the asset is not known thus there is no acceptable way to allocate the cost Instructor Explanation Chapter 3 page 105 Points Received 3 of 3 Comments 12 Question TCO D The left side of an account is Student Answer blank a description of the account the debit side the balance of the account Instructor Explanation Chapter 3 page 111 Points Received 3 of 3 Comments 13 Question Student Answer TCO D A credit is not the normal balance for which account listed below Common Stock account Revenue account Liability account Dividends account Instructor Explanation Chapter 3 page 116 Points Received 3 of 3 Comments 14 Question TCO D A debit is not the normal balance for which account listed below Student Answer Dividends Cash Accounts Receivable Service Revenue Instructor Explanation Chapter 3 page 116 Points Received 3 of 3 Comments 15 Question Student Answer TCO D Which pair of accounts follows the rules of debit and credit in relation to increases and decreases in the same manner Dividends payable and rent expense Repair expense and notes payable Prepaid insurance and advertising expense Service revenues and equipment Instructor Explanation Chapter 3 page 116 Points Received 3 of 3 Comments Page 1 2 3 Times are displayed in GMT 07 00 Mountain Time US Canada Grading Summary These are the automatically computed results of your exam Grades for essay questions and comments from your instructor are in the Details section below Date Taken Time Spent Points Received 1 h 41 min 28 secs 149 150 Of Questions Correct 30 2 30 N A Question Type Multiple Choice Essay Grade Details All Questions Page 1 2 3 1 Question TCO E The time period assumption states that Student Answer a transaction can only affect one period of time estimates should not be made if a transaction affects more than one time period adjustments to the enterprise s accounts can only be made in the time period when the business terminates its operations the economic life of a business can be divided into artificial time Instructor Explanation Chapter 4 page 164 periods Points Received 3 of 3 Comments 2 Question TCO E The matching principle matches