Question 1

Which of the following is a disadvantage of a corporation when compared to a partnership?

Accepted Answer

A) The stockholders have limited liability. 
B) The corporation is treated as a separate legal entity from the stockholders. 
C) The corporation and its stockholders are subject to double taxation. 
D) The corporation must account for the transactions of the business as separate and apart from those of the owners. 
A) The stockholders have limited liability. 
B) The corporation is treated as a separate legal entity from the stockholders. 
C) The corporation and its stockholders are subject to double taxation. 
D) The corporation must account for the transactions of the business as separate and apart from those of the owners.

Question 2

Which of the following would not be found within the investing activities section of the statement of cash flows?

Accepted Answer

A) Cash paid to purchase a building for manufacturing facilities. 
B) Cash received from the sale of common stock to stockholders. 
C) Cash received from the sale of equipment used in manufacturing a product. 
D) Cash paid to purchase land. 
A) Cash paid to purchase a building for manufacturing facilities. 
B) Cash received from the sale of common stock to stockholders. 
C) Cash received from the sale of equipment used in manufacturing a product. 
D) Cash paid to purchase land.

Question 3

Which of the following has primary responsibility to develop Generally Accepted Accounting Principles?

Accepted Answer

A) Financial Accounting Standards Board. 
B) Company Executives. 
C) Securities and Exchange Commission. 
D) Public Company Accounting Oversight Board. 
A) Financial Accounting Standards Board. 
B) Company Executives. 
C) Securities and Exchange Commission. 
D) Public Company Accounting Oversight Board.

Question 4

Atlantic Corporation reported the following amounts at the end of the first year of operations   What are the retained earnings of Atlantic at the end of the year,and what amount of expenses were incurred during the year?

Accepted Answer

A) Retained earnings are $80,000 and expenses incurred totaled $680,000. 
B) Retained earnings are $80,000 and expenses incurred totaled $720,000. 
C) Retained earnings are $280,000 and expenses incurred totaled $480,000. 
D) Retained earnings are $280,000 and expenses incurred totaled $520,000. 
A) Retained earnings are $80,000 and expenses incurred totaled $680,000. 
B) Retained earnings are $80,000 and expenses incurred totaled $720,000. 
C) Retained earnings are $280,000 and expenses incurred totaled $480,000. 
D) Retained earnings are $280,000 and expenses incurred totaled $520,000.

Question 5

Which of the following properly describes the impact on the financial statements when a company borrows $20,000 from a local bank?

Accepted Answer

A) Net income increases $20,000. 
B) Assets decrease $20,000. 
C) Stockholders' equity increases $20,000. 
D) Liabilities increase $20,000. 
A) Net income increases $20,000. 
B) Assets decrease $20,000. 
C) Stockholders' equity increases $20,000. 
D) Liabilities increase $20,000.

Question 6

Which of the following statements is true about a sole proprietorship?

Accepted Answer

A) The owner and the business are separate legal entities but not separate accounting entities. 
B) The owner and the business are separate accounting entities but not separate legal entities. 
C) The owner and the business are separate legal entities and separate accounting entities. 
D) Most large businesses in this country are organized as sole proprietorships. 
A) The owner and the business are separate legal entities but not separate accounting entities. 
B) The owner and the business are separate accounting entities but not separate legal entities. 
C) The owner and the business are separate legal entities and separate accounting entities. 
D) Most large businesses in this country are organized as sole proprietorships.

Question 7

What financial statement would you look at to determine the dividends declared by a business?

Accepted Answer

A) Income statement. 
B) Statement of stockholders' equity. 
C) Statement of cash flows. 
D) Balance sheet. 
A) Income statement. 
B) Statement of stockholders' equity. 
C) Statement of cash flows. 
D) Balance sheet.

Question 8

For the current year,net income of Carol Company is $20,000 and dividends declared are $6,000;therefore,retained earnings have increased $26,000 during the year.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following describes the amount of insurance expense reported on the income statement?

Accepted Answer

A) The amount of cash paid for insurance in the current period. 
B) The amount of cash paid for insurance in the current period less any unpaid insurance at the end of the period. 
C) The amount of insurance used up (incurred)in the current period to help generate revenue. 
D) The amount of cash paid for insurance that is reported within the statement of cash flows. 
A) The amount of cash paid for insurance in the current period. 
B) The amount of cash paid for insurance in the current period less any unpaid insurance at the end of the period. 
C) The amount of insurance used up (incurred)in the current period to help generate revenue. 
D) The amount of cash paid for insurance that is reported within the statement of cash flows.

Question 10

Within which of the following would you find the inventory method(s)being used by a business entity?

Accepted Answer

A) Balance sheet. 
B) Income statement. 
C) Notes to the financial statements. 
D) Headings of the financial statements. 
A) Balance sheet. 
B) Income statement. 
C) Notes to the financial statements. 
D) Headings of the financial statements.

Which of the following is a disadvantage of a corporation when compared to a partnership?

Which of the following would not be found within the investing activities section of the statement of cash flows?

Which of the following has primary responsibility to develop Generally Accepted Accounting Principles?

Atlantic Corporation reported the following amounts at the end of the first year of operations What are the retained earnings of Atlantic at the end of the year,and what amount of expenses were incurred during the year?

Which of the following properly describes the impact on the financial statements when a company borrows $20,000 from a local bank?

Which of the following statements is true about a sole proprietorship?

What financial statement would you look at to determine the dividends declared by a business?

For the current year,net income of Carol Company is $20,000 and dividends declared are $6,000;therefore,retained earnings have increased $26,000 during the year.

Which of the following describes the amount of insurance expense reported on the income statement?

Within which of the following would you find the inventory method(s)being used by a business entity?

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

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Exam 1: Financial Statements and Business Decisions

Which of the following is a disadvantage of a corporation when compared to a partnership?

Which of the following would not be found within the investing activities section of the statement of cash flows?

Which of the following has primary responsibility to develop Generally Accepted Accounting Principles?

Atlantic Corporation reported the following amounts at the end of the first year of operations What are the retained earnings of Atlantic at the end of the year,and what amount of expenses were incurred during the year?

Which of the following properly describes the impact on the financial statements when a company borrows $20,000 from a local bank?

Which of the following statements is true about a sole proprietorship?

What financial statement would you look at to determine the dividends declared by a business?

For the current year,net income of Carol Company is $20,000 and dividends declared are $6,000;therefore,retained earnings have increased $26,000 during the year.

Which of the following describes the amount of insurance expense reported on the income statement?

Within which of the following would you find the inventory method(s)being used by a business entity?

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