Question 1

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.Cash received from the sale of common stock is a financing activity. Investing activities involve the purchase of the company's productive assets. 
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.Cash received from the sale of common stock is a financing activity. Investing activities involve the purchase of the company's productive assets. B

Question 2

Willie Company's retained earnings increased $20,000 during 2014. What was Willie's 2014 net income or loss given that Willie declared $25,000 of dividends during 2014?

Accepted Answer

A)  Net income was $5,000. 
B)  Net income was $45,000. 
C) Net loss was $45,000. 
D) Net loss was $5,000. 
A)  Net income was $5,000. 
B)  Net income was $45,000. 
C) Net loss was $45,000. 
D) Net loss was $5,000. B

Question 3

Which of the following transactions affects both the income statement and the statement of cash flows?

Accepted Answer

A)  Selling stock in exchange for cash. 
B)  Declaring and paying a cash dividend. 
C) Selling a product to a customer which creates an account receivable. 
D) Paying employee wages as they are earneD.Paying an employee wages as they are earned results in an expense being recognized (income statement) and a cash outflow (statement of cash flows). 
A)  Selling stock in exchange for cash. 
B)  Declaring and paying a cash dividend. 
C) Selling a product to a customer which creates an account receivable. 
D) Paying employee wages as they are earneD.Paying an employee wages as they are earned results in an expense being recognized (income statement) and a cash outflow (statement of cash flows). D

Question 4

For a business organized as a general partnership, which statement is true?

Accepted Answer

A)  The owners and the business are separate legal entities. 
B)  Each partner is potentially responsible for the debts of the business. 
C) Formation of a partnership requires getting a charter from the state of incorporation. 
D) A partnership is not considered to be a separate accounting entity. 
A)  The owners and the business are separate legal entities. 
B)  Each partner is potentially responsible for the debts of the business. 
C) Formation of a partnership requires getting a charter from the state of incorporation. 
D) A partnership is not considered to be a separate accounting entity.

Question 5

Which of the following statements describes the balance sheet?

Accepted Answer

A)  It reports a company's revenues and expenses. 
B)  Assets are generally reported on the balance sheet at the cost incurred to acquire them. 
C) Stockholders' equity includes only retained earnings. 
D) It reports a company's cash flow from operations. 
A)  It reports a company's revenues and expenses. 
B)  Assets are generally reported on the balance sheet at the cost incurred to acquire them. 
C) Stockholders' equity includes only retained earnings. 
D) It reports a company's cash flow from operations.

Question 6

What is the objective of the cash flow statement? Describe the three cash flow classifications that are reported within the cash flow statement.

Accepted Answer

The objective of the cash flow statement

Question 7

A calendar year reporting company preparing its annual financial statements should use the phrase "As of December 31,2014" in the heading of which financial statements?

Accepted Answer

A)  On all of the required financial statements. 
B)  On only the income statement. 
C) On the income statement and balance sheet, but not the statement of cash flows. 
D) On the balance sheet only. 
A)  On all of the required financial statements. 
B)  On only the income statement. 
C) On the income statement and balance sheet, but not the statement of cash flows. 
D) On the balance sheet only.

Question 8

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 on 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 on bonus payments to its employees. 
D) The providing of information to their auditors.

Question 9

What are the categories of cash flows that appear on a statement of cash flows?

Accepted Answer

A)  Cash flows from investing, financing, and service activities. 
B)  Cash flows from operating, production, and internal activities. 
C) Cash flows from financing, production, and growth activities. 
D) Cash flows from operating, investing, and financing activities. 
A)  Cash flows from investing, financing, and service activities. 
B)  Cash flows from operating, production, and internal activities. 
C) Cash flows from financing, production, and growth activities. 
D) Cash flows from operating, investing, and financing activities.

Question 10

Describe the role of a company's management and the external auditors in the accounting communication process.

Accepted Answer

Management is primarily responsible for

Question 11

Which of the following would be reported in the financing 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 to acquire equipment. 
D) Cash received from sale of investments. 
A)  Cash paid for dividends to stockholders. 
B)  Cash paid for interest expense. 
C) Cash paid to acquire equipment. 
D) Cash received from sale of investments.

Question 12

Which of the following would be reported in the investing activities section of a cash flow statement?

Accepted Answer

A)  Cash received from customers. 
B)  Cash received from the issue of common stock. 
C) Cash paid to repay a bank loan. 
D) Cash paid to acquire common stock of another company. 
A)  Cash received from customers. 
B)  Cash received from the issue of common stock. 
C) Cash paid to repay a bank loan. 
D) Cash paid to acquire common stock of another company.

Question 13

Gail's Greenhouse, Inc., a small retail store that sells houseplants, started business on January 1, 2014. At the end of January 2014, the following information was available: $$\begin{array} { | l | r | r | } 
\hline \text { Sales of plants for cash } & & \$ 75,000 \
\hline \text { Sales of plants for credit (not yet collected) } & & 15,000 \
\hline \text { Cost of plants which were sold and paid for during January } & & 45,000 \
\hline \begin{array} { l } 
\text { Expenses during January incurred, and paid for, during } \
\text { January unless otherwise noted: }
\end{array} & & \
\hline \text { Salaries } & & \
\hline \text { Telephone } & \$ 5,000 & \
\hline \text { Office supplies (all used) } & 250 & \
\hline \text { Electricity } & 150 & \
\hline \text { Rent on the store for January, 2014 (will not be paid until } & 300 & \
\hline \text { February, 2014) } & 1,000 & \
\hline
\end{array}$$ Requirements: 
A. Using the above information, prepare the income statement for Gail's Greenhouse for the month ended January 31, 2014.
B. What is the amount of cash flows provided by operating activities to be presented on the statement of cash flows?

Accepted Answer

A. @#IMG-DLM& B. $38,300 - 15,

Question 14

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

Accepted Answer

A)  Income taxes payable. 
B)  Common stock. 
C) Accounts payable. 
D) Dividends declareD.Common stock is a component of stockholders' equity on the balance sheet. 
A)  Income taxes payable. 
B)  Common stock. 
C) Accounts payable. 
D) Dividends declareD.Common stock is a component of stockholders' equity on the balance sheet.

Question 15

During 2014, Rock Company's cash balance increased from $79,000 to $91,300. Rock's net cash flow from operating activities was $37,300 and its net cash flow from financing activities was $11,100. How much was Rock's net cash flow from investing activities?

Accepted Answer

A)  A net cash flow of $42,900. 
B)  A net cash flow of ($36,100). 
C) A net cash flow of $60,700. 
D) A net cash flow of ($60,700). 
A)  A net cash flow of $42,900. 
B)  A net cash flow of ($36,100). 
C) A net cash flow of $60,700. 
D) A net cash flow of ($60,700).

Question 16

Which of the following is not an alternate title for the Statement of Income?

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 17

An audit is an examination of the financial statements provided by management 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 18

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 19

Which of the following statements is true?

Accepted Answer

A)  The statement of stockholders' equity always reports the same amount of dividend payments, as does the statement of cash flows. 
B)  The statement of cash flows has a relationship with the balance sheet. 
C) Dividends paid are reported on the statement of cash flows as an operating cash flow and on the income statement as a financing cash flow. 
D) Net income is reported on the income statement but not on the statement of stockholders' equity. 
A)  The statement of stockholders' equity always reports the same amount of dividend payments, as does the statement of cash flows. 
B)  The statement of cash flows has a relationship with the balance sheet. 
C) Dividends paid are reported on the statement of cash flows as an operating cash flow and on the income statement as a financing cash flow. 
D) Net income is reported on the income statement but not on the statement of stockholders' equity.

Question 20

Which of the following items is reported as an expense on the income statement?

Accepted Answer

A)  Dividends declared. 
B)  Cost of goods sold. 
C) Dividends paid. 
D) Accounts payable. 
A)  Dividends declared. 
B)  Cost of goods sold. 
C) Dividends paid. 
D) Accounts payable.

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

Willie Company's retained earnings increased $20,000 during 2014. What was Willie's 2014 net income or loss given that Willie declared $25,000 of dividends during 2014?

Which of the following transactions affects both the income statement and the statement of cash flows?

For a business organized as a general partnership, which statement is true?

Which of the following statements describes the balance sheet?

What is the objective of the cash flow statement? Describe the three cash flow classifications that are reported within the cash flow statement.

A calendar year reporting company preparing its annual financial statements should use the phrase "As of December 31,2014" in the heading of which financial statements?

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

What are the categories of cash flows that appear on a statement of cash flows?

Describe the role of a company's management and the external auditors in the accounting communication process.

Which of the following would be reported in the financing activities section of a cash flow statement?

Which of the following would be reported in the investing activities section of a cash flow statement?

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

During 2014, Rock Company's cash balance increased from $79,000 to $91,300. Rock's net cash flow from operating activities was $37,300 and its net cash flow from financing activities was $11,100. How much was Rock's net cash flow from investing activities?

Which of the following is not an alternate title for the Statement of Income?

An audit is an examination of the financial statements provided by management 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 would not be reported in the operating activities section of a cash flow statement?

Which of the following statements is true?

Which of the following items is reported as an expense on the income statement?

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 Bonds

Reporting and Interpreting Owners 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 would not be found within the investing activities section of the statement of cash flows?

Willie Company's retained earnings increased $20,000 during 2014. What was Willie's 2014 net income or loss given that Willie declared $25,000 of dividends during 2014?

Which of the following transactions affects both the income statement and the statement of cash flows?

For a business organized as a general partnership, which statement is true?

Which of the following statements describes the balance sheet?

What is the objective of the cash flow statement? Describe the three cash flow classifications that are reported within the cash flow statement.

A calendar year reporting company preparing its annual financial statements should use the phrase "As of December 31,2014" in the heading of which financial statements?

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

What are the categories of cash flows that appear on a statement of cash flows?

Describe the role of a company's management and the external auditors in the accounting communication process.

Which of the following would be reported in the financing activities section of a cash flow statement?

Which of the following would be reported in the investing activities section of a cash flow statement?

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

During 2014, Rock Company's cash balance increased from $79,000 to $91,300. Rock's net cash flow from operating activities was $37,300 and its net cash flow from financing activities was $11,100. How much was Rock's net cash flow from investing activities?

Which of the following is not an alternate title for the Statement of Income?

An audit is an examination of the financial statements provided by management 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 would not be reported in the operating activities section of a cash flow statement?

Which of the following statements is true?

Which of the following items is reported as an expense on the income statement?

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 Bonds

Reporting and Interpreting Owners Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters