Which of the following is NOT true? A. The financial statement which reports information helpful in...
Which of the following is NOT true?
| A. |
The financial statement which reports information helpful in calculating the current ratio would be the balance sheet. |
|
| B. |
A gain on the sale of land is included in net income from operations in a multi-step income statement. |
|
| C. |
The governmental agency that has broad powers to prescribe accounting practices to public companies that trade on the major stock exchanges is the Securities Exchange Commission. |
|
| D. |
Current assets will be typically be converted to cash or sold/consumed in one year or less. |
|
|
. |
1 points
QUESTION 3
Which of the following is NOT true:
| A. |
Intangibles include Patents/Copyrights, Trademarks/Trade names, Franchises, and Goodwill. |
|
| B. |
Revenue is defined as an inflow of cash resulting from sale of products and services in business operations. |
|
| C. |
Comparability is the quality that allows a user to analyze two or more other companies and look for similarities and differences. |
|
| D. |
Dividends do not appear on the income statement since they are a distribution to the owners; dividends are a direct deduction from retained earnings. |
|
1 points
QUESTION 4
Which of the following would cause a company's current ratio to increase?
| A. |
The sale of a building for cash. |
|
| B. |
The sale of inventory for cash. |
|
| C. |
Selling inventory on credit. |
|
| D. |
None of the above. |
Homework Answers
Q2
Answer is option B. A gain on the sale of land is included in net income from operations in a multi-step income statement.
It doesn't include in income from operation since it is a investing activity.
Q3.
Answer is option B. Revenue is defined as an inflow of cash
resulting from sale of products and services in business
operations
Because revenue is reported at the time a sales transaction takes place and may not necessarily represent cash in hand. Revenue eventually impacts cash flow figures but does not automatically have an immediate effect on them.
Q4.
Answer is option A. The sale of a building for cash.
Sales of building will increase the current asset of cash which will result in increase in current ratio.
Add Answer to:
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