Question 1

Which of the following is considered to be an expense on the income statement?

Accepted Answer

A) Accounts payable. 
B) Notes payable. 
C) Wages payable. 
D) Cost of goods sold. 
A) Accounts payable. 
B) Notes payable. 
C) Wages payable. 
D) Cost of goods sold.

Question 2

A decision maker who wants to understand a company's financial statements must carefully read the notes to the financial statements because these disclosures provide useful supplemental information.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not an alternate title for the financial statement that reports revenues and expenses?

Accepted Answer

A) Income Statement. 
B) Statement of Net Income. 
C) Statement of Operations. 
D) Statement of Income. 
A) Income Statement. 
B) Statement of Net Income. 
C) Statement of Operations. 
D) Statement of Income.

Question 4

Which of the following is not a consequence to a company resulting from the issuance of their financial statements?

Accepted Answer

A) The effect on the selling price of their stock. 
B) The providing of information to their competitors. 
C) The effect of bonus payments to its employees. 
D) The providing of information to their auditors. 
A) The effect on the selling price of their stock. 
B) The providing of information to their competitors. 
C) The effect of bonus payments to its employees. 
D) The providing of information to their auditors.

Question 5

Which of the following accounts would not be reported on the balance sheet?

Accepted Answer

A) Retained earnings. 
B) Inventory. 
C) Accounts payable. 
D) Dividends. 
A) Retained earnings. 
B) Inventory. 
C) Accounts payable. 
D) Dividends.

Question 6

Parker Pool Supply,Inc.reported the following items for the year ended December 31,2019:
   Prepare an income statement for the year ended December 31,2019.

Accepted Answer

@#IMG-DLM& Accounts receivable

Question 7

An audit is an examination of the financial statements to ensure that they represent what they claim and to make sure that they are in compliance with generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 8

Madrid Company has provided the following data (ignore income taxes): 2019 revenues were $77,500.
2019 net income was $33,900.
Dividends declared and paid during 2019 totaled $5,700.
Total assets at December 31,2019 were $217,000.
Total stockholders' equity at December 31,2019 was $123,000.
Retained earnings at December 31,2019 were $83,000.
-
Which of the following is not correct?

Accepted Answer

A) 2019 expenses were $43,600. 
B) Total liabilities at December 31,2019 were $94,000. 
C) Retained earnings increased $33,900 during 2019. 
D) Common stock at December 31,2019 was $40,000. 
A) 2019 expenses were $43,600. 
B) Total liabilities at December 31,2019 were $94,000. 
C) Retained earnings increased $33,900 during 2019. 
D) Common stock at December 31,2019 was $40,000.

Question 9

Which of the following describes the operating activities section of a cash flow statement?

Accepted Answer

A) It provides information about how operations have been financed. 
B) It provides information pertaining to dividend payments to stockholders. 
C) It provides information with respect to a company's ability to generate cash flows that are directly related to earning income. 
D) It provides the net increase or decrease in cash during the period. 
A) It provides information about how operations have been financed. 
B) It provides information pertaining to dividend payments to stockholders. 
C) It provides information with respect to a company's ability to generate cash flows that are directly related to earning income. 
D) It provides the net increase or decrease in cash during the period.

Question 10

The International Accounting Standards Board has worked to develop global accounting standards known as:

Accepted Answer

A) Generally accepted accounting principles. 
B) Globally accepted financial standards. 
C) International financial reporting standards. 
D) Generally accepted international financial standards. 
A) Generally accepted accounting principles. 
B) Globally accepted financial standards. 
C) International financial reporting standards. 
D) Generally accepted international financial standards.

Question 11

For each of the following items that appear on the balance sheet,identify each as an asset (A),liability (L),or element of stockholders' equity (SE).For any item that would not appear on the balance sheet,write the letter,N.

Accepted Answer

The answer of For each of the following items that...

Question 12

Which of the following is not a formal requirement to become a licensed certified public accountant (CPA)?

Accepted Answer

A) A college education. 
B) Professional experience. 
C) Membership in the American Institute of Certified Public Accountants (AICP
A) . 
D) A professional examination. 
A) A college education. 
B) Professional experience. 
C) Membership in the American Institute of Certified Public Accountants (AICP
A) . 
D) A professional examination.

Question 13

Which of the following accounts is not a liability on the balance sheet?

Accepted Answer

A) Retained earnings. 
B) Notes payable. 
C) Accounts payable. 
D) Interest payable. 
A) Retained earnings. 
B) Notes payable. 
C) Accounts payable. 
D) Interest payable.

Question 14

The primary responsibility for the content of the financial statements lies with the external auditor.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following transactions increases both cash and net income?

Accepted Answer

A) Cash receipts from a bank loan. 
B) Cash receipts from sale of common stock. 
C) Cash receipts from customers for services provided. 
D) Cash receipts from cost of goods sold. 
A) Cash receipts from a bank loan. 
B) Cash receipts from sale of common stock. 
C) Cash receipts from customers for services provided. 
D) Cash receipts from cost of goods sold.

Question 16

Which of the following would not be reported in the operating activities section of a cash flow statement?

Accepted Answer

A) Cash paid for dividends to stockholders. 
B) Cash paid for interest expense. 
C) Cash paid for employee wages. 
D) Cash received from customers. 
A) Cash paid for dividends to stockholders. 
B) Cash paid for interest expense. 
C) Cash paid for employee wages. 
D) Cash received from customers.

Question 17

Which of the following is represented by elements of the statement of stockholders' equity?

Accepted Answer

A) Common stock reinvested in the business. 
B) Revenues plus dividends and expenses. 
C) Earnings not distributed to owners. 
D) Financing from creditors and stockholders. 
A) Common stock reinvested in the business. 
B) Revenues plus dividends and expenses. 
C) Earnings not distributed to owners. 
D) Financing from creditors and stockholders.

Question 18

Sparty Corporation has provided the following information for its most recent year of operation: Revenues earned were $97,000,of which $9,000 were uncollected at the end of the year.
Operating expenses incurred were $39,000,of which $7,000 were unpaid at the end of the year.
Dividends declared were $11,000,of which $3,000 were unpaid at the end of the year.
Income tax expense is $17,400.
What is the amount of net income reported on Sparty's income statement?

Accepted Answer

A) $32,900. 
B) $39,300. 
C) $33,600. 
D) $40,600. 
A) $32,900. 
B) $39,300. 
C) $33,600. 
D) $40,600.

Question 19

Which of the following is primarily responsible for the information provided in the financial statements?

Accepted Answer

A) Chief Executive Officer. 
B) External Auditors. 
C) Board of Directors. 
D) Internal Accounting Staff. 
A) Chief Executive Officer. 
B) External Auditors. 
C) Board of Directors. 
D) Internal Accounting Staff.

Question 20

Which of the following best describes the purpose of an audit?

Accepted Answer

A) To prove the accuracy of an entity's financial statements. 
B) To lend credibility to an entity's financial statements. 
C) To audit every transaction that an entity entered into. 
D) To establish that a corporation's stock is a sound investment. 
A) To prove the accuracy of an entity's financial statements. 
B) To lend credibility to an entity's financial statements. 
C) To audit every transaction that an entity entered into. 
D) To establish that a corporation's stock is a sound investment.

Which of the following is considered to be an expense on the income statement?

A decision maker who wants to understand a company's financial statements must carefully read the notes to the financial statements because these disclosures provide useful supplemental information.

Which of the following is not an alternate title for the financial statement that reports revenues and expenses?

Which of the following is not a consequence to a company resulting from the issuance of their financial statements?

Which of the following accounts would not be reported on the balance sheet?

Parker Pool Supply,Inc.reported the following items for the year ended December 31,2019: Prepare an income statement for the year ended December 31,2019.

An audit is an examination of the financial statements to ensure that they represent what they claim and to make sure that they are in compliance with generally accepted accounting principles.

Which of the following describes the operating activities section of a cash flow statement?

The International Accounting Standards Board has worked to develop global accounting standards known as:

For each of the following items that appear on the balance sheet,identify each as an asset (A),liability (L),or element of stockholders' equity (SE).For any item that would not appear on the balance sheet,write the letter,N.

Which of the following is not a formal requirement to become a licensed certified public accountant (CPA)?

Which of the following accounts is not a liability on the balance sheet?

The primary responsibility for the content of the financial statements lies with the external auditor.

Which of the following transactions increases both cash and net income?

Which of the following would not be reported in the operating activities section of a cash flow statement?

Which of the following is represented by elements of the statement of stockholders' equity?

Which of the following is primarily responsible for the information provided in the financial statements?

Which of the following best describes the purpose of an audit?

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments,financial Statements,and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue,receivables,and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property,plant,and Equipment;intangibles;and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters

Exam 1: Financial Statements and Business Decisions

Which of the following is considered to be an expense on the income statement?

A decision maker who wants to understand a company's financial statements must carefully read the notes to the financial statements because these disclosures provide useful supplemental information.

Which of the following is not an alternate title for the financial statement that reports revenues and expenses?

Which of the following is not a consequence to a company resulting from the issuance of their financial statements?

Which of the following accounts would not be reported on the balance sheet?

Parker Pool Supply,Inc.reported the following items for the year ended December 31,2019: Prepare an income statement for the year ended December 31,2019.

An audit is an examination of the financial statements to ensure that they represent what they claim and to make sure that they are in compliance with generally accepted accounting principles.

Which of the following describes the operating activities section of a cash flow statement?

The International Accounting Standards Board has worked to develop global accounting standards known as:

For each of the following items that appear on the balance sheet,identify each as an asset (A),liability (L),or element of stockholders' equity (SE).For any item that would not appear on the balance sheet,write the letter,N.

Which of the following is not a formal requirement to become a licensed certified public accountant (CPA)?

Which of the following accounts is not a liability on the balance sheet?

The primary responsibility for the content of the financial statements lies with the external auditor.

Which of the following transactions increases both cash and net income?

Which of the following would not be reported in the operating activities section of a cash flow statement?

Which of the following is represented by elements of the statement of stockholders' equity?

Which of the following is primarily responsible for the information provided in the financial statements?

Which of the following best describes the purpose of an audit?

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments,financial Statements,and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue,receivables,and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property,plant,and Equipment;intangibles;and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters