Question 1

A company began the year with Assets of $100,000,Liabilities of $20,000 and Stockholders' equity of $80,000.During the year Assets increased $55,000 and stockholders' equity increased $20,000.What was the change in Liabilities for the year?

Accepted Answer

A)  Increase of $75,000
B)  Increase of $35,000
C)  Decrease of $75,000
D)  Decrease of $35,000E) B) and C)
F) A) and D)

Question 2

In the U.S. ,generally accepted accounting principles are established:

Accepted Answer

A)  directly by the 1933 Securities Act.
B)  by the Public Company Accounting Oversight Board (PCAO
B)  .
C)  by the Financial Accounting Standards Board (FAS
B)  .
D)  by the American Institute of Certified Public Accountants (AICP
A)  .E) B) and C)
F) A) and C)

Question 3

What is the missing amount for Total Liabilities?

Accepted Answer

A)  $3,347,700
B)  $1,439,200
C)  $1,470,700
D)  $1,877,000E) None of the above
F) All of the above

Question 4

The income statement

Accepted Answer

A)  reports the assets,liabilities,and stockholders' equity of a company.
B)  reports cumulative earnings that have not been distributed to stockholders.
C)  reports the amount of profit distributed to owners during the period.
D)  reports the amount of revenues earned and expenses incurred during the period.E) A) and B)
F) A) and C)

Question 5

Accounting information systems:

Accepted Answer

A)  are summarized by reports that are published to the public.
B)  capture and report the results of a business's operating,investing,and financing activities.
C)  monitor business activities only in financial terms.
D)  capture only the information that is needed by the owners of the company.E) A) and B)
F) A) and C)

Question 6

What was the amount of the change in total stockholders' equity during the year?

Accepted Answer

A)  $350,000 increase
B)  $450,000 increase
C)  $250,000 increase
D)  $200,000 increaseE) A) and D)
F) B) and C)

Question 7

Assets reported on the balance sheet would include which of the following?

Accepted Answer

A)  Accounts receivable,sales revenue and cash
B)  Equipment,supplies expense and cash
C)  Accounts payable,retained earnings and cash
D)  Accounts receivable,equipment and cashE) C) and D)
F) None of the above

Question 8

In the United States,generally accepted accounting principles (GAAP)are established by the PCAOB (Public Company Accounting Oversight Board).

Accepted Answer

A) True 
 B)False

Question 9

Which of the following actions would be considered unethical?

Accepted Answer

A)  A company does not distribute any of its profits to stockholders.
B)  A company rounds the revenues and expenses that it reports on the income statement.
C)  An unintentional mistake made by a new accountant.
D)  The cousin of one of the business owners is hired to perform the annual audit.E) A) and D)
F) A) and B)

Question 10

Generally Accepted Accounting Standards require profitable companies to distribute some of their profits to their stockholders.

Accepted Answer

A) True 
 B)False

Question 11

What is the amount of retained earnings at the end of 2014?

Accepted Answer

A)  $37,000.
B)  $240,000.
C)  $29,000.
D)  $269,000.E) B) and C)
F) B) and D)

Question 12

To determine whether generally accepted accounting principles (GAAP) were followed in the preparation of financial statements,an examination of:

Accepted Answer

A)  tax documents would be performed by the IRS.
B)  the annual report would be performed by the SEC.
C)  the financial statements and related documents would be performed by an independent auditor.
D)  the financial statements and related documents would be performed by the FASB.E) B) and C)
F) C) and D)

Question 13

Which of the following statements is true?

Accepted Answer

A)  The "net change in cash" reported on the statement of cash flows is also reported on the statement of retained earnings.
B)  Both the income statement and the statement of cash flows show the result of a company's operating activities.
C)  The statement of cash flows is for a period of time while the income statement is at a point in time.
D)  The statement of cash flows is at a point of time while the income statement is for a period of time.E) A) and D)
F) None of the above

Question 14

In the above statement of cash flows,what amount is represented by letter J?

Accepted Answer

A)  ($42,000) 
B)  $42,000
C)  ($22,000) 
D)  $22,000E) None of the above
F) B) and C)

Question 15

What was the amount of net income for the year?

Accepted Answer

A)  $2,000
B)  $1,000
C)  $3,000
D)  $5,000E) B) and C)
F) A) and B)

Question 16

Stockholders are creditors of a company.

Accepted Answer

A) True 
 B)False

Question 17

Contributed Capital is an asset on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 18

A company's quarterly income statements show that in the last three quarters both sales revenue and net income have been falling.Which of the following conclusions drawn by users are valid,given this information?

Accepted Answer

A)  Creditors are likely to conclude that the risk of lending to the company is falling and might be willing to accept a lower interest rate on loans.
B)  Investors are likely to conclude that the stock price is likely to rise,making the company more attractive as a potential investment.
C)  Customers are likely to conclude that the company is struggling,therefore it is permissible to take longer to pay amounts they owe to the company.
D)  Owners may conclude that the company will be less likely to distribute dividends.E) None of the above
F) A) and D)

Question 19

Which one of the following statements regarding the balance sheet for Anonymous Inc.is true?

Accepted Answer

A)  The $207,100 shown on the balance sheet has been distributed to stockholders as dividends.
B)  Retained Earnings is misclassified.It should be reported as an Asset.
C)  Anonymous,Inc. ,is owed $310,500 from customers who have purchased goods or services from the company,but have not yet paid for them.
D)  The retained earnings reported represents the retained earnings at the beginning of the year.E) B) and C)
F) A) and B)

Question 20

What is the amount of total liabilities at the end of 2014?

Accepted Answer

A)  $7,075
B)  $10,075
C)  $9,075
D)  $12,975E) All of the above
F) B) and C)

Exam 1: Business Decisions and Financial Accounting

A company began the year with Assets of $100,000,Liabilities of $20,000 and Stockholders' equity of $80,000.During the year Assets increased $55,000 and stockholders' equity increased $20,000.What was the change in Liabilities for the year?

Correct AnswerverifiedShow Answer

Stockholders are creditors of a company.

Correct AnswerverifiedShow Answer

Contributed Capital is an asset on the balance sheet.

Correct AnswerverifiedShow Answer

Accounting information systems:

Correct AnswerverifiedShow Answer

Which of the following actions would be considered unethical?

Correct AnswerverifiedShow Answer

To determine whether generally accepted accounting principles (GAAP) were followed in the preparation of financial statements,an examination of:

Correct AnswerverifiedShow Answer

Which one of the following statements regarding the balance sheet for Anonymous Inc.is true?

Correct AnswerverifiedShow Answer

A company's quarterly income statements show that in the last three quarters both sales revenue and net income have been falling.Which of the following conclusions drawn by users are valid,given this information?

Correct AnswerverifiedShow Answer

In the above statement of cash flows,what amount is represented by letter J?

Correct AnswerverifiedShow Answer

In the U.S. ,generally accepted accounting principles are established:

Correct AnswerverifiedShow Answer

What is the amount of retained earnings at the end of 2014?

Correct AnswerverifiedShow Answer

What is the amount of total liabilities at the end of 2014?

Correct AnswerverifiedShow Answer

What was the amount of net income for the year?

Correct AnswerverifiedShow Answer

In the United States,generally accepted accounting principles (GAAP)are established by the PCAOB (Public Company Accounting Oversight Board).

Correct AnswerverifiedShow Answer

The income statement

Correct AnswerverifiedShow Answer

Assets reported on the balance sheet would include which of the following?

Correct AnswerverifiedShow Answer

What was the amount of the change in total stockholders' equity during the year?

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Generally Accepted Accounting Standards require profitable companies to distribute some of their profits to their stockholders.

Correct AnswerverifiedShow Answer

What is the missing amount for Total Liabilities?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified