A100+Midterm%2BSpring%2BI%2C%2B2010

B it audits the financial statements of all publicly

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Unformatted text preview: not change. e None of the above 13 Which of the following is true regarding the SEC? a It prepares the financial statements of all publicly-held companies. b It audits the financial statements of all publicly-held companies. c Its requirements apply to all publicly and privately-held companies. d It was established in 1933. e It is another name for the FASB. 14 Which of the following is an example of accrual accounting? a When a sale is recorded on the company's books by increasing cash and increasing revenue. b When a cash payment for the purchase of land is shown on the company's statement of cash flows. c When a cash purchase of inventory is recorded as an exchange of one asset for another. d When the company's statement of cash flows is increased by the receipt of cash. e When a sale on account is recorded on the company's income statement. 15 The purpose of an end-of-the-period adjustment is to a correctly state the balance sheet and the income statement. b correctly state the statement of cash flows. c balance the statement of cash flows with the income statement. d correctly state the balance sheet and the statement of cash flows. e comply with the requirements of cash-basis accounting. 16 Sterling, Inc. had $80,000 in sales during 2009. The company purchased $32,000 in inventory and sold three-fourths of the inventory during the year. At December 31, 2009, Sterling still owed $2,000 for the inventory it had purchased during the year, and was owed $5,000 on sales made during 2009. What is the company's gross profit for 2009? a $47,000 b $53,000 c $45,000 d $48,000 e None of the above Use the following information to answer questions 17 through 24 : Shutter Company began business on December 1, 2009. During the month of December the company had the following transactions: 12/1 - Sold 100 shares of stock in Shutter Corporation to stockholders for $10,000. 12/1 - Borrowed $20,000, which is due back along with $1,200 in interest on December 1, 2010. 12/1 - Purchased insuranc...
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This note was uploaded on 09/11/2012 for the course BUS 100 taught by Professor Mo during the Spring '08 term at Indiana.

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