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17. Which group of items would most Which company is most likely a retailer?
likely be included in the other assets a wholesaler? a manufacturer?
account on the balance sheet?
Company A Company B Company C
a. Land held for investment, start-up a. Wholesaler Manufacturer Retailer
costs, and long-term prepayments. b. Retailer Wholesaler Manufacturer
b. Inventories, marketable securities, c. Manufacturer Wholesaler Retailer
bonds. d. Manufacturer Retailer Wholesaler
c. One-year prepaid insurance policy,
stock investments, copyrights. 20. Which if the following items coyld
d. Inventories, franchies, patents. cause the recognition of accrued
liabilities?
18. What is the differeance between
notes payable – banks and current a. Sales, taxes, iterest income.
maturities of long-term debt? b. Sales, interest expense, rent.
c. Salaries, rent, insurance.
a. There is no difference. d. Salaries, interest expense, interest
b. Notes payable – banks are short-term income.
obligations, while current maturities of
long-term are the portio of long-term 21. Which of the items below need not
debt that will be prepaid during the be disclosed separately in the income
upcoming year. statement?
c. Notes payable- banks are usually
included under current liabilities, and a. Selling a major business segment.
current maturities of long-term debt are b. Salary expense.
included under long-term debt. c. Extraodinary transactions.
d. Notes payable- banks are long-term d. Cumulative effect of changes in
liabilities, and current maturities of long- accounting principles.
term debt are current liabilities.
22. What does the income statement
19. Companies A, B, C : measure for a firm?
A B C
Inventories 90,000 120,000 180,000 a. The financing and investment
Property, P & E 75,000 30,000 45,000 activities for a period.
Total Assets 300,000 300,000 300,000 b. The changes in assets and liabilities
that occurred during a pepriod.
c. The results of operations for a period.
d. The financial position of a firm for a
period.