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(Solved) Robin Company reported cost of goods sold of $12,000 for the year. If the markup percentage was 25 percent, what was the revenue for the year?


Robin Company reported cost of goods sold of $12,000 for the year. If the markup percentage was 25 percent, what was the revenue for the year? Assume a tax rate of 10 percent.

Select one:

a. $9,600

b. $10,000

c. $14,400

d. $16,000

e. $18,500


Which of the following best represents the practice of conservatism?

Select one:

a. A company’s accountants try to make sure that its expenses are reported in the same period as the revenues they helped generate.

b. A company needs a loan, so it makes accounting choices that allow the company to look as good as possible.

c. An accountant is unsure if a cost should be reported as an expense or an asset. Even though it is most likely an asset, the accountant reports it as an expense.

d. An accountant purposefully understates a company’s revenues to make the company’s financial position look worse.

e. A company is faced with a cost that could be reported as an expense or an asset. Both choices face equally likely possibilities, so the company reports the cost as an expense.


Which of the following is a financial statement produced by companies?

Select one:

a. Assessment sheet

b. Statement of cash flows

c. Statement of gross Income

d. Expense statement

e. Tax statement


Which of the following is the name for state laws, which govern financial reporting?

Select one:

a. U.S. GAAP

b. FASB Accounting Standards Codification

c. Blue Sky Laws

d. Securities and Exchange Act

e. EDGAR


Which of the following is true of the EITF?

Select one:

a. It was founded in 1973.

b. It is a part of the PCAOB.

c. It determines the majority of U.S. GAAP.

d. It was created by the U.S. Congress.

e. It was created to assist the FASB.


Shields Corporation purchases 5 flashlights for $5 each and sells them to customers for $9 each. What is Shield’s total gross profit?

Select one:

a. $4

b. $20

c. $25

d. $45

e. $5


Which two organizations are coming together to form a single set of global standards over the next few years?

Select one:

a. The PCAOB and the EIFT

b. The AICPA and the FASB

c. The IASB and the GASB

d. The EDGAR and the EIFT

e. The IASB and the FASB


The SEC refers to:

Select one:

a. Shareholders and Emerging Investors Commission.

b. Securities and Employer Corporation.

c. Securities and Exchange Corporation.

d. Shares and Exchange Commission.

e. Securities and Exchange Commission.


The PCAOB refers to:

Select one:

a. Public Company Accounting Oversight Board.

b. Private Company Accounting Organization Bill.

c. Public Corporation Accounting Outlook Board.

d. Public Commission for Accounting for Over and Short Bills.

e. Private Commission for Availability of Balance Sheet.


Traylor Beauty Supply is in the business of selling hair care and other beauty products. It recently sold an old piece of equipment to Shaw Company for an amount more than what it had originally paid. Traylor should record a(an) _____ on the sale of the equipment.

Select one:

a. revenue

b. expense

c. gain

d. loss

e. gross profit


Which of the following states that if a company faces two equally likely possibilities, the one which makes the company look worse should be chosen?

Select one:

a. Matching principle

b. Practice of conservatism

c. Materiality convention

d. Principle of consistency

e. Principle of continuity


Which of the following financial statements classify business activities into operating, investing, and financing activities?

Select one:

a. Income statement

b. Trial balance

c. Balance sheet

d. Statement of cash flows

e. Profitability statement


A company’s gross profit percentage is its gross profit divided by its:

Select one:

a. net sales.

b. cost of goods sold.

c. net income.

d. total expenses.

e. total assets.


International Financial Reporting Standards (IFRS) are set by:

Select one:

a. the SEC.

b. the GASB.

c. the FASB.

d. the IASB.

e. the PCAOB.


The SEC has delegated the development of authoritative accounting principles to the:

Select one:

a. IASB.

b. AICPA.

c. FASB.

d. EDGAR.

e. EIFT.


Which of the following is the system, which allows investors to access financial information about publicly traded companies?

Select one:

a. FASB Accounting Standards Codification

b. EITF

c. U.S. GAAP

d. EDGAR

e. Securities and Exchange Act


Which of the following organizations produces accounting standards for state and local governments in the U.S.?

Select one:

a. The SEC

b. The EITF

c. The GASB

d. The FASB

e. The IASB


The difference between a company’s sales and cost of goods sold is referred to as the:

Select one:

a. gross profit.

b. net income.

c. retained earnings.

d. gain on sale.

e. operating profit.


A detailed examination of a company’s financial statements is called a(n):

Select one:

a. certification.

b. test.

c. audit.

d. report.

e. opinion.


Which of the following describes the "blue sky laws"?

Select one:

a. The financial information reported by publicly traded companies must conform to U.S. GAAP.

b. The form and distribution of financial information of companies that do not issue securities to the public must conform to state laws.

c. The financial reports must be prepared using the guidelines produced by the IASB.

d. The new financial reporting guidelines produced with the joint efforts of the IASB and the FASB should be applied by companies that do not issue shares to the public.

e. The state and local governments should follow accounting standards produced by the Governmental Accounting Standards Board.


For the year 2014, Thompson, Inc. reported cost of goods sold of $2,300. Revenue during the same period was $4,200. Thompson’s accountant mistakenly recorded cost of goods sold as $3,200 instead of $2,300. Which of the following statements is true?

Select one:

a. Thompson’s gross profit would be overstated.

b. Thompson’s net income would be understated.

c. Thompson’s retained earnings would be overstated.

d. Thompson’s reported expenses would be understated.

e. Thompson’s revenues would be understated.


Which of the following organizations examines new problems when they initially arise in hopes of coming to quick agreement as to an appropriate method of reporting based on existing U.S. GAAP?

Select one:

a. The SEC

b. The IASB

c. The EITF

d. The PCAOB

e. The GASB


Jenkins Corporation made sales of $900 during the month of October. Cost of goods sold for the month was $540. What was Jenkins gross profit percentage for the month?

Select one:

a. 40%

b. 45%

c. 50%

d. 55%

e. 60%


Which of the following statements is also called the statement of financial position?

Select one:

a. Income statement

b. Statement of retained earnings

c. Balance sheet

d. Statement of cash flows

e. Profitability statement


Which of the following is reported on the income statement?

Select one:

a. Dividends Paid

b. Salaries Expense

c. Prepaid Insurance

d. Supplies

e. Bank Overdraft


Which of the following Forms must be submitted each year that includes financial statements as well as a substantial amount of additional data?

Select one:

a. Form 10-K

b. Form 10-Q

c. Form 10-AD

d. Form 10-BC

e. Form 15-QA


Which of the following statements is true of income tax expense?

Select one:

a. It is reported at the top of income statement.

b. It is reported in the statement of retained earnings.

c. It is incurred to generate revenue.

d. It is recognized only on payment of cash.

e. It is caused by a company’s revenues.


Foreign companies, whose securities are traded publicly within the United States fall under the jurisdiction of the:

Select one:

a. SEC.

b. EITF.

c. GASB.

d. PCAOB.

e. AICPA.


Elenor Corporation sold goods that originally cost $605,000 for $1,100,000. What is Elenor’s gross profit?

Select one:

a. $605,000

b. $1,100,00

c. $495,000

d. $1,705,000

e. $-0-


Cost of sales refers to the cost of the merchandise that:

Select one:

a. company purchased during the period.

b. customers returned during the period.

c. company have at the end of the period.

d. customers purchased during the period.

e. company have at the beginning of the period.


Which of the following is the U.S. organization, which has ultimate responsibility for the availability of complete and reliable information about every organization that issues publicly traded securities?

Select one:

a. The SEC

b. The EDGAR

c. The FASB

d. The EITF

e. The AICPA


Which of the following is a reason for the SEC to let the FASB produce U.S. GAAP?

Select one:

a. The FASB is a government organization; therefore, there is no abdication of an important responsibility by the federal government.

b. The FASB is formed under the same guidelines as IASB.

c. The SEC and FASB were established by the Securities Exchange Act of 1934.

d. The members of the FASB are also the members of the SEC; therefore, there is no argument between the two organizations.

e. The members of the FASB can be trusted to study each reporting issue meticulously before arriving at a reasoned resolution.


Which of the following organizations was created in 1984 to assist FASB?

Select one:

a. The PCAOB

b. The SEC

c. The AICPA

d. The IASB

e. The EITF


Which of the following organizations has the primarily authority for producing GAAP in the U.S.?

Select one:

a. The IASB

b. The FASB

c. The EITF

d. The AICPA

e. The EDGAR


The conclusions rendered by the EITF are considered to be authoritative until the:

Select one:

a. SEC provides its own formal guidance.

b. EDGAR provides its own formal guidance.

c. AICPA provides its own formal guidance.

d. FASB provides its own formal guidance.

e. IASB provides its own formal guidance.


Which of the following, released by the FASB, is the single source for U.S. GAAP?

Select one:

a. The EDGAR

b. FASB Accounting Standards Codification

c. FASB’s Securities Exchange Act

d. FASB’s Blue Sky Laws

e. The SEC


Which of the following is an account found on the income statement?

Select one:

a. Dividends Paid

b. Gains

c. Equipment

d. Retained Earnings

e. Goodwill


On which financial statement should income tax expense be reported?

Select one:

a. Statement of cash flows

b. Balance sheet

c. Statement of retained earnings

d. Income statement

e. Statement of working capital


The practice of conservatism while preparing financial statements usually results in:

Select one:

a. lower net income.

b. lower expense.

c. higher dividends.

d. higher stockholders’ equity.

e. lower liabilities.


A gain created by an occurrence that is outside a company’s primary or central operations is reported on the:

Select one:

a. income statement.

b. statement of retained earnings.

c. balance sheet.

d. statement of working capital.

e. cost sheet.

 


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