F2 M5, M6, M7

Question 1

OCBOA stands for

Answer 1

other comprehensive basis of accounting

Question 2

T or F Keeping with the idea that financial statements need to be clear about the basis
they were prepared

Answer 2

T Keeping with the idea that financial statements need to be clear about the basis
they were prepared

Question 3

Current Ratio

Answer 3

Current assets/current liabilities

Question 4

If your numerator increase your ratio increases or decreases?

Answer 4

increases

Question 5

If your denominator increases your ratio increases or decreases

Answer 5

decreases

Question 6

Quick Ratio

Answer 6

Current Assets - Inventory - Prepaids/Current Liabilities

Question 7

Is short term marketable security an asset or equity?

Answer 7

its an asset

Question 8

Accounts receivable turnover formula

Answer 8

Sales(net)/AVERAGE accounts receivable (net) ex: 1,800,000/(300,000+390,000)/2=5.22 times - the balances that are being added are the beginning balances + ending balance/2

Question 9

Days outstanding formula

Answer 9

ending accounts receivable (net)/Sales(net)/365

Question 10

Days inventory formula

Answer 10

ending inventory (net)/COGS)/365

Question 11

Accounts payable turnover formula

Answer 11

COGS/AVERAGE accounts payable ex: 1,000,000/(150,000+125,000)/2=7.27 times; the balances that are being added are the beginning balances + ending balance/2

Question 12

Dupont return on assets

Answer 12

net income /sales (net)* sales(net)/average total assets

Question 13

Return on Equity

Answer 13

Net Income/Average Total Equity

Question 14

Return on Sales

Answer 14

EBIT/Sales(net)

Question 15

Operating cash flow ratio

Answer 15

cash flow from operations/current liabilities

Question 16

Total Debt Ratio

Answer 16

total liabilities/total assets

Question 17

Equity multiplier

Answer 17

Total assets/total equity

Question 18

Earnings per share

Answer 18

Income available to common shareholders/weight average common shares outstanding ex: $200,000/100,000 shares

Question 19

Earnings per share

Answer 19

Net income-preferred stock dividends/weight avg # of outstanding commons shares

Question 20

A weight average # of shares does not apply to what type of stock items?

Answer 20

stock dividend or stock split. these are treated as being outstanding the whole year so the weighting doesn’t apply

Question 21

Weight average # of shares is also known as basic what>

Answer 21

earnings per share

Question 22

What are the Other comprehensive income items 4 classifications?

Answer 22

Pension adjustments, unrealized gains and losses (available for sale debt securities and hedges), Foreign Currency Items, Instrument (specific credit risk)

Question 23

T or False The relationship between net income and retained earnings is similar to the relationship between other comprehensive income and accumulated other comprehensive income

Answer 23

T

Question 24

What is the purpose of reporting comphresenive income

Answer 24

To summarize all changes in equity from nonowner sources

Question 25

T or F Market participants are buyers and sellers activating in their economic interest who are not related parties, who are knowledgeable about an asset or liability and willing to transact

Answer 25

T A nonmarket participant, is the government, related parties, judges and courts

Question 26

T or F Fair Value includes transportation costs

Answer 26

T; fair value includes transportation costs but not transaction costs

Question 27

The price in the principal market for an asset or liability will be

Answer 27

the fair value measurement

Question 28

What level supports that is more reliable to go with a quoted price of an identical investment than a quote price for a similar investment

Answer 28

Level 2

Question 29

Accumulated other comprehensive activity includes?

Answer 29

Other comprehensive income is closed at the end of the accounting period, all current and previous accounting periods other comprehensive income is included in, accumulated other comprehensive income is a component of stockholders equity

Question 30

Prior period correction, loss from discontinued operations and unrealized loss on investments in no-current marketable equity securities is included in what type of income

Answer 30

comprehensive income

Question 31

What are modifications included in cash basis financial statements?

Answer 31

capitalizing inventory, depreciation, accruing revenue and expenses

Question 32

What SEC filings does not include a set of financial statements? Form 3, Form 11-k, Form 20-F, Form 10-k

Answer 32

Form 3

Question 33

If your in accrual accounting and your looking at cash basis accounting; if accounts receivable is increased you would do what to the pretax net income (increase/decrease)?

Answer 33

decrease net income, because under cash basis your net income is when you receive cash and since you didn’t receive cash then net income needs to be decreased

Question 34

Under Regulation S-X an entity’s annual financial statements must include a minimum of at least TWO of what financial statement?

Answer 34

balance sheets

Question 35

Tags define the data is part of what feature for accounting REPORTING language

Answer 35

XBRL (extensible business reporting language) utilizes a taxonomy with tags that identify and define data found within the FINANCIAL STATMENTS AND SUPPROTING FOOTNOTES