ACCOUNTING 101 MIDTERM EXAMINATION 1. Which of the following is the correct accounting equation? A) Assets + Liabilities = Owner’s equity B) Assets = Liabilities + Owner’s equity C) Assets + Revenue = Owner’s equity D) Assets + Revenue = Liabilities + Expenses 2. Which of the following financial statements shows the changes in capital during a period of time? A) Income statement B) Statement of owner’s equity C) Statement of cash flows D) Balance sheet 3
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Question 1 ________________ Linear Technologyâs payout policy can be observed from Exhibit 3. From Q1 93 onwards, Linear has been steadily paying out dividends every quarter. Over the years, the dividends paid out to shareholders have also increased. From the dividend payout ratio (Appendix, Table 1), it is evident that especially in 2002 to 2003, dividends being distributed have increased from its previously steady ratio of approximately 0.100. Dividends in both years have increased despite
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Conceptual Framework 1. Two of the fundamental qualitative characteristics of accounting information as outlined in conceptual framework are ‘relevance’ and ‘representational faithfulness’. Provide a brief description of the meaning of these two characteristics. Do you think faithful representation is more important than relevance for accounting information? [ 3+3=6 marks] [Word limit 300] Suggested solution: The fundamental qualitative characteristics identified in the New
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Quinniece Garrett Individual: Pro Forma Statements Comprehensive Problem: Landis Corporation The Landis Corporation had 2008 sales of $100 million. The balance sheet items that vary directly with sales and the profit margin are as follows: Percent Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5% Accounts receivable. . . . . . . . . . . . . . . . . . . . . . 15 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Net fixed assets . . . .
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Rob Oostendorp Ethics in Accounting Professor Ritsma 5/14/02 #79 Edvid, Inc. Analyzing Edvid’s situation with the 7-step ethical decision-making process: Facts: • Edvid wants to use the Modified Operating Method for accounting for its revenue. • Hutton wants to use Profit Recognition – New Method for accounting for Edvid’s revenue. • Edvid justifies their position with SFAS No. 48 & 53. • Hutton felt that neither SFAS No. 48 or 53 applied to Edvid’s position. Operational
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Investment Analysis Table of Contents UNIT 1 2 DQ1 2 DQ2: Describe the relationship between risk and return 4 DQ 3How can we use the Modified Altman and Modified Chanos algorithms to detect inflection points in determining leverage shifts? 5 UNIT 2 7 DQ 1: Describe the concept behind an efficient capital market. 7 DQ 2: Do you believe we have efficient capital markets? 8 DQ 3: What are the four required financial statements under IFRS and GAAP? 8 DQ 4: How do some managers
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* Basic principle Revenue principle The revenue principle, also known as the realization principle, states that revenue is earned when the sale is made, which is typically when goods or services are provided. A key component of the revenue principle, when it comes to the sale of goods, is that revenue is earned when legal ownership of the goods passes from seller to buyer. Note that revenue isn't earned when you collect cash for something. Expense principle The expense principle states that
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right to return expires. If the company has signed a long-term contract with the customer, revenue is recorded as progress is made on construction. All three exceptions conform to the general principle that revenue is recognized when it is “earned and receivable." In other words, the general principle always applies. AP22 11/30/13: Bob Brown started his business, Bob Brown Company, by
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Basic Accounting Quiz# 2 MCNP-ISAP Name : __________________________________________________ Date:____________ Score:____________ Directions: Encircle your final answer. Do not cheat. Good luck! 1. | The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the | balance sheet income statement statement of cash flows | 2. | The financial statement that reports the assets, liabilities, and stockholders'
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MEMO Date: August 13, 2013 To: Thomas Carroll, CEO From: Jose R. Pizarro Jaimin Modi George Triarchou Monica Balbuena Shuyuan Qiu RE: Mercury Athletic valuation and acquisition recommendations We believe that Mercury is an appropriate target for AGI since an acquisition can be an excellent growth opportunity. First, through the acquisition AGI can take the advantages of some existing synergies. Acquiring Mercury would expand AGI’s business size and consequently
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