Question 1

In what order would the items on the balance sheet appear?

Accepted Answer

A)  Assets, retained earnings, liabilities, and common stock. 
B)  Common stock, retained earnings, liabilities, and assets. 
C) Assets, liabilities, common stock, and retained earnings. 
D) Common stock, assets, liabilities, and retained earnings. 
A)  Assets, retained earnings, liabilities, and common stock. 
B)  Common stock, retained earnings, liabilities, and assets. 
C) Assets, liabilities, common stock, and retained earnings. 
D) Common stock, assets, liabilities, and retained earnings.

Question 2

Alfred Company manufactures men's clothing. During 2014, the company reported the following items that affected cash. Indicate whether each of these items is a cash flow from operating activities (O), investing activities (I), or financing activities (F). $$\begin{array} { | l | l | } 
\hline \text { Purchased equipment by paying cash: } & \
\hline \text { Collected cash on account from customers: } & \
\hline \text { Paid dividends to stockholders: } & \
\hline \text { Paid cash for supplies: } & \
\hline \text { Paid suppliers for fabric: } & \
\hline \text { Borrowed money from bank on a note payable: } & \
\hline \text { Paid interest to bank on the note payable: } & \
\hline \text { Paid wages to employees: } & \
\hline \text { Sold shares of common stock to new stockholders: } & \
\hline
\end{array}$$

Accepted Answer

Purchased equipment by paying cash: I Co

Question 3

Larson Company ends its recent year of operations with $3,500,000 in retained earnings. During the year Larson's net income exceeded its dividend declarations by $200,000. Larson's dividend declarations were $25,000 greater than the dividend payments. How much was Larson Company's beginning retained earnings?

Accepted Answer

Beginning retained e

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

The accounting equation states that Assets = Liabilities + Stockholders' Equity.

Accepted Answer

A) True 
 B)False

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

Husky Company has provided the following information for its most recent year of operation: Cash collected from customers totaled $89,300.
Cash borrowed from banks totaled $31,700.
Cash paid to employees for salaries totaled $32,100.
Cash received from selling Husky common stock to stockholders totaled $41,000.
Cash payments to banks for repayment of money borrowed totaled $7,500.
Cash paid to suppliers totaled $9,600.
Land costing $25,000 was sold for $25,000 cash.
Cash paid for dividends to stockholders totaled $3,300.
How much was Husky's cash flow from financing activities?

Accepted Answer

A)  $72,700. 
B)  $59,000. 
C) $65,200. 
D) $61,900. 
A)  $72,700. 
B)  $59,000. 
C) $65,200. 
D) $61,900.

Question 8

During 2014, Canton Company's assets increased $95,500 and the liabilities decreased $17,300. Canton Company's stockholders' equity at December 31, 2014 was $211,500. What amount was stockholders' equity at January 1, 2014?

Accepted Answer

A)  $98,700. 
B)  $324,300. 
C) $133,300. 
D) $289,700. 
A)  $98,700. 
B)  $324,300. 
C) $133,300. 
D) $289,700.

Question 9

On January 1, 2014, Miller Corporation had retained earnings of $8,000,000. During 2014, Miller reported net income of $1,500,000, declared dividends of $500,000, and issued common stock for $1,000,000. What were Miller's retained earnings on December 31, 2014?

Accepted Answer

A)  $7,000,000. 
B)  $9,500,000. 
C) $9,000,000. 
D) $7,500,000. 
A)  $7,000,000. 
B)  $9,500,000. 
C) $9,000,000. 
D) $7,500,000.

Question 10

Which of the following has the legal authority to determine financial reporting in the United States?

Accepted Answer

A)  Financial Accounting Standards Board. 
B)  American Accounting Association. 
C) Securities & Exchange Commission. 
D) Public Company Accounting Oversight BoarD.The Securities and Exchange Commission is the government agency that determines the financial statements that public companies must provide to stockholders. 
A)  Financial Accounting Standards Board. 
B)  American Accounting Association. 
C) Securities & Exchange Commission. 
D) Public Company Accounting Oversight BoarD.The Securities and Exchange Commission is the government agency that determines the financial statements that public companies must provide to stockholders.

Question 11

Which private sector body was given the primary responsibility to determine detailed auditing standards?

Accepted Answer

A)  Financial Accounting Standards Board. 
B)  Securities & Exchange Commission. 
C) Public Company Accounting Oversight Board. 
D) American Institute of Certified Public Accountants. 
A)  Financial Accounting Standards Board. 
B)  Securities & Exchange Commission. 
C) Public Company Accounting Oversight Board. 
D) American Institute of Certified Public Accountants.

Question 12

During the fiscal year ended 2014, a company had revenues of $400,000, cost of goods sold of $280,000, and an income tax rate of 30 percent on income before income taxes. What was the company's 2014 net income?

Accepted Answer

A)  $120,000. 
B)  $36,000. 
C) $84,000. 
D) $400,000. 
A)  $120,000. 
B)  $36,000. 
C) $84,000. 
D) $400,000.

Question 13

Moss Company has provided the following data:
2014 revenues were $87,500.
2014 expenses were $43,900.
Dividends declared and paid by Moss during 2014 totaled $15,700.
Total assets on December 31, 2014 were $227,000.
Total stockholders' equity on December 31, 2014 was $133,000.
Common stock on December 31, 2014 was $93,000.
What was the beginning retained earnings balance?

Accepted Answer

Stockholders' equity ($133,000) = Contri

Question 14

Stockholders' equity on the balance sheet includes common stock and retained earnings.

Accepted Answer

A) True 
 B)False

Question 15

The financial statement that shows an entity's economic resources and claims against those resources is the balance sheet.

Accepted Answer

A) True 
 B)False

Question 16

The statement of stockholders' equity explains the change in the retained earnings balance caused by stockholder investments and dividend declarations.

Accepted Answer

A) True 
 B)False

Question 17

Why does a company hire independent auditors?

Accepted Answer

A)  To guarantee the accuracy of both annual and quarterly financial statements. 
B)  To verify the accounting accuracy of every transaction entered into. 
C) To report on the fairness of financial statement presentation. 
D) The auditors are responsible for the content of the financial statements. 
A)  To guarantee the accuracy of both annual and quarterly financial statements. 
B)  To verify the accounting accuracy of every transaction entered into. 
C) To report on the fairness of financial statement presentation. 
D) The auditors are responsible for the content of the financial statements.

Question 18

At the beginning of 2014, a corporation had assets of $270,000 and liabilities of $160,000. During 2014, assets increased $25,000 and liabilities increased $5,000. What was stockholders' equity on December 31, 2014?

Accepted Answer

A)  $140,000. 
B)  $130,000. 
C) $190,000. 
D) $80,000. 
A)  $140,000. 
B)  $130,000. 
C) $190,000. 
D) $80,000.

Question 19

Which of the following equations is the balance sheet equation?

Accepted Answer

A)  Assets + Liabilities = Stockholders' Equity. 
B)  Assets + Stockholder's Equity = Liabilities. 
C) Assets = Liabilities + Stockholders' Equity. 
D) Assets = Liabilities + Common Stock. 
A)  Assets + Liabilities = Stockholders' Equity. 
B)  Assets + Stockholder's Equity = Liabilities. 
C) Assets = Liabilities + Stockholders' Equity. 
D) Assets = Liabilities + Common Stock.

Question 20

Which of the following statements is correct?

Accepted Answer

A)  Revenues are reported on the income statement regardless of whether the customer has paid for the goods or services. 
B)  Expenses are reported on the income statement during the period that they are paid for. 
C) Net income includes a deduction for dividend payments made to stockholders. 
D) Net income normally equals the net cash generated by operations. 
A)  Revenues are reported on the income statement regardless of whether the customer has paid for the goods or services. 
B)  Expenses are reported on the income statement during the period that they are paid for. 
C) Net income includes a deduction for dividend payments made to stockholders. 
D) Net income normally equals the net cash generated by operations.

In what order would the items on the balance sheet appear?

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

The accounting equation states that Assets = Liabilities + Stockholders' Equity.

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

During 2014, Canton Company's assets increased $95,500 and the liabilities decreased $17,300. Canton Company's stockholders' equity at December 31, 2014 was $211,500. What amount was stockholders' equity at January 1, 2014?

On January 1, 2014, Miller Corporation had retained earnings of $8,000,000. During 2014, Miller reported net income of $1,500,000, declared dividends of $500,000, and issued common stock for $1,000,000. What were Miller's retained earnings on December 31, 2014?

Which of the following has the legal authority to determine financial reporting in the United States?

Which private sector body was given the primary responsibility to determine detailed auditing standards?

During the fiscal year ended 2014, a company had revenues of $400,000, cost of goods sold of $280,000, and an income tax rate of 30 percent on income before income taxes. What was the company's 2014 net income?

Stockholders' equity on the balance sheet includes common stock and retained earnings.

The financial statement that shows an entity's economic resources and claims against those resources is the balance sheet.

The statement of stockholders' equity explains the change in the retained earnings balance caused by stockholder investments and dividend declarations.

Why does a company hire independent auditors?

At the beginning of 2014, a corporation had assets of $270,000 and liabilities of $160,000. During 2014, assets increased $25,000 and liabilities increased $5,000. What was stockholders' equity on December 31, 2014?

Which of the following equations is the balance sheet equation?

Which of the following statements is correct?

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

Exam 1: Financial Statements and Business Decisions

In what order would the items on the balance sheet appear?

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

The accounting equation states that Assets = Liabilities + Stockholders' Equity.

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

During 2014, Canton Company's assets increased $95,500 and the liabilities decreased $17,300. Canton Company's stockholders' equity at December 31, 2014 was $211,500. What amount was stockholders' equity at January 1, 2014?

On January 1, 2014, Miller Corporation had retained earnings of $8,000,000. During 2014, Miller reported net income of $1,500,000, declared dividends of $500,000, and issued common stock for $1,000,000. What were Miller's retained earnings on December 31, 2014?

Which of the following has the legal authority to determine financial reporting in the United States?

Which private sector body was given the primary responsibility to determine detailed auditing standards?

During the fiscal year ended 2014, a company had revenues of $400,000, cost of goods sold of $280,000, and an income tax rate of 30 percent on income before income taxes. What was the company's 2014 net income?

Stockholders' equity on the balance sheet includes common stock and retained earnings.

The financial statement that shows an entity's economic resources and claims against those resources is the balance sheet.

The statement of stockholders' equity explains the change in the retained earnings balance caused by stockholder investments and dividend declarations.

Why does a company hire independent auditors?

At the beginning of 2014, a corporation had assets of $270,000 and liabilities of $160,000. During 2014, assets increased $25,000 and liabilities increased $5,000. What was stockholders' equity on December 31, 2014?

Which of the following equations is the balance sheet equation?

Which of the following statements is correct?

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