11. Information that is material means that an error or alternative method of handling a transaction A. Would possibly affect the judgment of someone relying on the financial statements B. Would not affect the decisions of users C. Might cause a company to understate its earnings for the accounting period D. Could increase the profitability of a company 12. An accountant is uncertain about the best estimate of an amount for a business transaction. If two amounts are about equally likely, the amount least likely to overstate assets and income is selected. Which of the following qualities is characterized by this action? A. Comparability B. Conservatism C. Materiality D. Neutrality 13. The qualitative characteristics of accounting data include A. Assets reported on the Balance Sheet B. All accounting information C. Cash flows D. Reliability 14. To determine the source of a company's assets, on financial statement will you look? A. Balance Sheet only B. Income Statement only C. Both the Balance Sheet and the Income Statement D. Both the Income Statement and the Statement of Retained Earnings 15. Bailey Company has provided the following information from its accounting records for the current year: Cash $ 50,000 Accounts Receivable $ 40,000 Inventory $ 60,000 Land $ 75,000 Accounts Payable $ 45,000 Payable (due 2020) $150,000 Retained Earnings ? ? ? Calculate Current Assets. A. $ 90,000 B. $ 150,000 C. $ 195,000 D. $ 225,000
11. Information that is material means that an error or alternative method of handling a transaction A. Would possibly affect the judgment of someone relying on the financial statements B. Would not affect the decisions of users C. Might cause a company to understate its earnings for the accounting period D. Could increase the profitability of a company 12. An accountant is uncertain about the best estimate of an amount for a business transaction. If two amounts are about equally likely, the amount least likely to overstate assets and income is selected. Which of the following qualities is characterized by this action? A. Comparability B. Conservatism C. Materiality D. Neutrality 13. The qualitative characteristics of accounting data include A. Assets reported on the Balance Sheet B. All accounting information C. Cash flows D. Reliability 14. To determine the source of a company's assets, on financial statement will you look? A. Balance Sheet only B. Income Statement only C. Both the Balance Sheet and the Income Statement D. Both the Income Statement and the Statement of Retained Earnings 15. Bailey Company has provided the following information from its accounting records for the current year: Cash $ 50,000 Accounts Receivable $ 40,000 Inventory $ 60,000 Land $ 75,000 Accounts Payable $ 45,000 Payable (due 2020) $150,000 Retained Earnings ? ? ? Calculate Current Assets. A. $ 90,000 B. $ 150,000 C. $ 195,000 D. $ 225,000
Test-Bank-Using-Financial-Accounting-Information-6th-Edition-Porter.docx