A311 Ch2

A311 Ch2 - 1 Which of the following would be an example of...

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1. Which of the following would be an example of an external user of financial reports? A. Supermarket manager looking at the cost overrun report from the deli department B. Loan officer looking over the financial statements of a loan applicant C. An employee who takes financial data and compiles it into report form for use by his supervisor D. A manager of a company who requests that internal financial reports be presented to him in a specific format 2. At the end of an accounting period, Lackawaxen Co. has the following account balances listed on its Adjusted Trial Balance. Sales Revenue: $100,000 Cost of Goods Sold: 50,000 Administrative Expense: 25,000 Retained Earnings: 250,000 Assume there are no other revenue and expense accounts, and that revenues and expenses are closed with a single journal entry. Which of the following is the correct closing entry for Lackawaxen Co.? A. Administrative Expense $ 25,000; Cost of Goods Sold 50,000; Sales Revenue 100,000; Retained Earnings $175,000 B. Retained Earnings 250,000; Sales Revenue 250,000 C. Retained Earnings 25,000;Cost of Goods Sold 25,000 D. Sales Revenue 100,000; Cost of Goods Sold 50,000; Administrative Expense 25,000; Retained Earnings 25,000 3. Recording the purchase price of a wastebasket (with an estimated useful life of 10 years) as an expense of the current period is justified by the A. going concern assumption. B. materiality constraint . C. matching principle. D. comparability principle. 4. Max Wealth Financial Advisors has had large losses for the past 10 years. It also appears they’ll be unable to meet both current and long-term financial commitments. Which of the following traditional assumptions of the accounting model does Max
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A311 Ch2 - 1 Which of the following would be an example of...

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