Question 1

The purpose of a statement of retained earnings is to:

Accepted Answer

A)  estimate the current value of a company's assets.
B)  report the way that net income and dividends affected the financial position of the company during the period.
C)  show where the cash is flowing into and out of a company.
D)  report the specific revenues and expenses arising during the period.E) A) and B)
F) A) and C)

Question 2

If Boward Co.has Common Stock of $40,000,total assets of $85,000,and total liabilities of $35,000,its Retained Earnings equals:

Accepted Answer

A)  $10,000.
B)  $45,000.
C)  $50,000.
D)  $55,000.E) A) and B)
F) C) and D)

Question 3

Paying a cash dividend to stockholders is a(n) :

Accepted Answer

A)  operating activity.
B)  investing activity.
C)  financing activity.
D)  expense.E) A) and C)
F) All of the above

Question 4

Stockholders' equity is the difference between a company's assets and its liabilities.

Accepted Answer

A) True 
 B)False

Question 5

Assets reported on the balance sheet include:

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 Cash.E) B) and C)
F) A) and D)

Question 6

When several parties can reach similar values in financial statements by using similar methods,the information is said to be:

Accepted Answer

A)  comparable.
B)  understandable.
C)  verifiable.
D)  timely.E) B) and D)
F) A) and B)

Question 7

Choose the appropriate letter to match the terms to the blanks below to complete the relevant equation for each financial statement.
FINANCIAL STATEMENT EQUATION
  TERM
A.Cash at beginning of year
B.Net cash flow from operating activities
C.Balance of retained earnings from previous year
D.Net cash flow from investing activities
E.Liabilities
F.Net cash flow from financing activities
G.Balance of retained earnings at end of year
H.Net income
I.Revenue
J.Assets
K.Stockholders' equity
L.Expenses
M.Cash at end of year
N.Dividends paid

Accepted Answer

Balance Sheet:J = E + K,Income...

Question 8

Which of the following descriptions about a note payable is correct?

Accepted Answer

A)  Written promise to repay a loan
B)  A type of long-term asset
C)  Generally informal in nature
D)  Reported as part of stockholders' equity on the balance sheetE) None of the above
F) B) and D)

Question 9

Which of the following financial statements shows how net income (loss) and dividends impacted a stockholders' equity account?

Accepted Answer

A)  Statement of Retained Earnings
B)  Balance Sheet
C)  Statement of Cash Flows
D)  Income StatementE) B) and C)
F) A) and D)

Question 10

Ace Electronics paid $8,000 of the $10,000 its employees had earned during the period.Ace Electronics should report Salaries and Wages Expense of ________ on the income statement,Salaries and Wages Payable of ________ on the balance sheet,and a reduction in Cash of ________.

Accepted Answer

A)  $0;$10,000;$0
B)  $8,000;$2,000;$0
C)  $2,000;$2,000;$0
D)  $10,000;$2,000;$8,000E) C) and D)
F) B) and D)

Question 11

Which of the following are the three basic elements of the balance sheet?

Accepted Answer

A)  Assets,liabilities,and retained earnings.
B)  Assets,liabilities,and common stock.
C)  Assets,liabilities,and revenues.
D)  Assets,liabilities,and stockholders' equity.E) A) and D)
F) None of the above

Question 12

When faced with an ethical dilemma,an accountant should:

Accepted Answer

A)  identify who will be affected by the situation,identify and evaluate the alternative courses of action,and choose the alternative that is the most ethical.
B)  report the matter to the SEC.
C)  report the matter to the IRS.
D)  resign.E) None of the above
F) A) and B)

Question 13

A company owes $200,000 on a bank loan.It will be reported by the company as Accounts Payable.

Accepted Answer

A) True 
 B)False

Question 14

The Statement of Cash Flows for the current year contained the following:  The change in cash for the current year was an increase of $14,000.
What was the amount of cash flows from (used in) investing activities?

Accepted Answer

A)  ($1,000) 
B)  ($40,000) 
C)  ($10,000) 
D)  $10,000E) B) and C)
F) A) and C)

Question 15

Which of the following statements is prepared as of a point in time?

Accepted Answer

A)  Income Statement
B)  Statement of Retained Earnings
C)  Balance Sheet
D)  Statement of Cash FlowsE) C) and D)
F) A) and B)

Question 16

The separate entity assumption means:

Accepted Answer

A)  a company's financial statements reflect only the business activities of that company.
B)  each separate owner's finances must be revealed in the financial statements.
C)  each separate entity that has a claim on a company's assets must be shown in the financial statements.
D)  if the business is a sole proprietorship,the owners' personal activities are included in the company's financial statements.E) A) and B)
F) A) and C)

Question 17

Which of the following would not affect a company's net income?

Accepted Answer

A)  A change in the company's income taxes
B)  Changing the selling price of a company's product
C)  Paying a dividend to stockholders
D)  Advertising a new productE) B) and D)
F) B) and C)

Question 18

A company incurred $5,000 for rent for the last month of Year 5.The company paid the bill during the first month of Year 6.Which of the following statements is correct?

Accepted Answer

A)  The related $5,000 should be reported on the income statement for Year 5 as Rent Expense.
B)  Since it has not been paid,this bill would not be reported in the financial statements for Year 5.
C)  The related $5,000 should be included in Accounts Receivable on the balance sheet at the end of Year 5.
D)  The related $5,000 should be included in Rent Expense on the balance sheet at the end Year 5.E) All of the above
F) A) and B)

Question 19

Net income that has been paid out to the company's stockholders for their own personal use is referred to as:

Accepted Answer

A)  dividends.
B)  equities.
C)  revenues.
D)  retained earnings.E) B) and C)
F) None of the above

Question 20

A net loss for a period arises when:

Accepted Answer

A)  assets are greater than liabilities.
B)  revenues are less than expenses.
C)  liabilities are greater than stockholder's equity.
D)  revenues are greater than expenses.E) A) and B)
F) B) and D)

Exam 1: Business Decisions and Financial Accounting

Which of the following descriptions about a note payable is correct?

Correct Answer
verified

If Boward Co.has Common Stock of $40,000,total assets of $85,000,and total liabilities of $35,000,its Retained Earnings equals:

Correct Answer
verified

Ace Electronics paid $8,000 of the $10,000 its employees had earned during the period.Ace Electronics should report Salaries and Wages Expense of on the income statement,Salaries and Wages Payable of on the balance sheet,and a reduction in Cash of .

Correct Answer
verified

The Statement of Cash Flows for the current year contained the following: The change in cash for the current year was an increase of $14,000. What was the amount of cash flows from (used in) investing activities?

Correct Answer
verified

A company incurred $5,000 for rent for the last month of Year 5.The company paid the bill during the first month of Year 6.Which of the following statements is correct?

Correct Answer
verified

Which of the following statements is prepared as of a point in time?

Correct Answer
verified

Stockholders' equity is the difference between a company's assets and its liabilities.

Correct Answer
verified

Correct Answer
verified
Balance Sheet:J = E + K,Income...
View Answer

A company owes $200,000 on a bank loan.It will be reported by the company as Accounts Payable.

Correct Answer
verified

The separate entity assumption means:

Correct Answer
verified

Assets reported on the balance sheet include:

Correct Answer
verified

Which of the following would not affect a company's net income?

Correct Answer
verified

Which of the following financial statements shows how net income (loss) and dividends impacted a stockholders' equity account?

Correct Answer
verified

A net loss for a period arises when:

Correct Answer
verified

Which of the following are the three basic elements of the balance sheet?

Correct Answer
verified

The purpose of a statement of retained earnings is to:

Correct Answer
verified

Net income that has been paid out to the company's stockholders for their own personal use is referred to as:

Correct Answer
verified

Paying a cash dividend to stockholders is a(n) :

Correct Answer
verified

When several parties can reach similar values in financial statements by using similar methods,the information is said to be:

Correct Answer
verified

When faced with an ethical dilemma,an accountant should:

Correct Answer
verified

Exam 1: Business Decisions and Financial Accounting

Which of the following descriptions about a note payable is correct?

Correct AnswerverifiedShow Answer

If Boward Co.has Common Stock of $40,000,total assets of $85,000,and total liabilities of $35,000,its Retained Earnings equals:

Correct AnswerverifiedShow Answer

Ace Electronics paid $8,000 of the $10,000 its employees had earned during the period.Ace Electronics should report Salaries and Wages Expense of ________ on the income statement,Salaries and Wages Payable of ________ on the balance sheet,and a reduction in Cash of ________.

Correct AnswerverifiedShow Answer

The Statement of Cash Flows for the current year contained the following: The change in cash for the current year was an increase of $14,000. What was the amount of cash flows from (used in) investing activities?

Correct AnswerverifiedShow Answer

A company incurred $5,000 for rent for the last month of Year 5.The company paid the bill during the first month of Year 6.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Which of the following statements is prepared as of a point in time?

Correct AnswerverifiedShow Answer

Stockholders' equity is the difference between a company's assets and its liabilities.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedBalance Sheet:J = E + K,Income...View AnswerShow Answer

A company owes $200,000 on a bank loan.It will be reported by the company as Accounts Payable.

Correct AnswerverifiedShow Answer

The separate entity assumption means:

Correct AnswerverifiedShow Answer

Assets reported on the balance sheet include:

Correct AnswerverifiedShow Answer

Which of the following would not affect a company's net income?

Correct AnswerverifiedShow Answer

Which of the following financial statements shows how net income (loss) and dividends impacted a stockholders' equity account?

Correct AnswerverifiedShow Answer

A net loss for a period arises when:

Correct AnswerverifiedShow Answer

Which of the following are the three basic elements of the balance sheet?

Correct AnswerverifiedShow Answer

The purpose of a statement of retained earnings is to:

Correct AnswerverifiedShow Answer

Net income that has been paid out to the company's stockholders for their own personal use is referred to as:

Correct AnswerverifiedShow Answer

Paying a cash dividend to stockholders is a(n) :

Correct AnswerverifiedShow Answer

When several parties can reach similar values in financial statements by using similar methods,the information is said to be:

Correct AnswerverifiedShow Answer

When faced with an ethical dilemma,an accountant should:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Ace Electronics paid $8,000 of the $10,000 its employees had earned during the period.Ace Electronics should report Salaries and Wages Expense of on the income statement,Salaries and Wages Payable of on the balance sheet,and a reduction in Cash of .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Balance Sheet:J = E + K,Income...
View 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