Match the accounting terms with the description by entering the proper letter in the space provided.
A. Classified financial statement
B. Current assets
C. Current liabilities
D. Current ratio
E. Gross profit
F. Gross profit percentage
G. Inventory turnover
H. Liquidity
I. Long-term liabilities
J. Multiple-step income statement
K. Plant and equipment
L. Reversing entries
M. Single-step income statement_____
1. A type of income statement where only one computation is needed to determine the net income (total revenue - total expenses = net income)_____
2. The difference between net sales and the cost of goods sold _____
3. A format by which revenues and expenses on the income statement, and assets and liabilities on the balance sheet, are divided into groups of similar accounts and a subtotal is given for each group_____
4. A type of income statement on which several subtotals are computed before the net income is calculated_____
5. The amount of gross profit from each dollar of sales _____
6. The number of times inventory is purchased and sold during the accounting period _____
7. The ease with which an item can be converted into cash_____
8. Property that will be used in the business for longer than one year _____
9. Journal entries made to reverse the effect of certain adjusting entries involving accrued income or accrued expenses to avoid problems in recording future payments or receipts of cash in a new accounting period_____
10. A relationship between current assets and current liabilities that provides a measure of a firm's ability to pay its current debts _____
11. Assets consisting of cash, items that normally will be converted into cash within one year, or items that will be used up within one year_____
12. Debts of a business that are due more than one year in the future _____
13. Debts that must be paid within one year.
(1) M, (2) E, (3) A, (4) J, (5) F, (6) G, (7) H, (8) K (9) L, (10) D, (11) B, (12) I, (13) C
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For every dollar’s worth of goods and services bought at an earlier date, the amount of money it would take now to buy the same amount of goods and services after N years of inflation at rate p is called the ________ inflation discount factor.
A. future B. realized C. expected D. past
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Indicate whether the statement is true or false
In the statement of cash flows, the payment of interest would appear as part of:
a. financing activities. b. operating activities. c. a note related to the statement. d. investing activities.
If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off, the entry to record the write-off against the allowance account results in:
A. An increase in the expenses of the current period. B. No effect on the expenses of the current period. C. A reduction in equity. D. A reduction in current liabilities. E. An increase in current assets.