Question 1

Match the term to the appropriate definition.(There are more definitions than terms. )
-Income Statement

Accepted Answer

A) A procedure by which independent evaluators assess the accounting procedures and financial reports of a company. 
B) An example of external users of financial statements. 
C) Activities directly related to running the business to earn a profit. 
D) When a company acquires money from investors. 
E) A financial statement that summarizes a company's past and current cash situation.
F)Transactions with lenders (borrowing and repaying cash)and stockholders (selling company stock and paying dividends).
G)The total amount of profits that are kept by the company.
H)The idea that the financial statements of a company include the results of only that company's business activities.
I)The idea that a company should report its financial data in the relevant currency.
J)Borrowing money from lenders.
K)A financial statement showing a company's assets,liabilities and stockholders' equity.
L)A financial statement that shows a company's revenues and expenses.
M)An example of an internal user of financial statements. 
A) A procedure by which independent evaluators assess the accounting procedures and financial reports of a company. 
B) An example of external users of financial statements. 
C) Activities directly related to running the business to earn a profit. 
D) When a company acquires money from investors. 
E) A financial statement that summarizes a company's past and current cash situation.
F)Transactions with lenders (borrowing and repaying cash)and stockholders (selling company stock and paying dividends).
G)The total amount of profits that are kept by the company.
H)The idea that the financial statements of a company include the results of only that company's business activities.
I)The idea that a company should report its financial data in the relevant currency.
J)Borrowing money from lenders.
K)A financial statement showing a company's assets,liabilities and stockholders' equity.
L)A financial statement that shows a company's revenues and expenses.
M)An example of an internal user of financial statements.

Question 2

In order to be considered useful,information must have two fundamental characteristics: reliability and understandability.

Accepted Answer

A) True 
 B)False

Question 3

The owner is not responsible for the entity's taxes and debts if the entity is organized as a(n):

Accepted Answer

A) corporation 
B) sole proprietorship. 
C) unlimited liability corporation. 
D) limited liability corporation. 
A) corporation 
B) sole proprietorship. 
C) unlimited liability corporation. 
D) limited liability corporation.

Question 4

Which of the following would not represent a financing activity?

Accepted Answer

A) Paying dividends to stockholders. 
B) An investment of capital by the owners. 
C) Borrowing money from a bank to purchase new equipment. 
D) Buying supplies. 
A) Paying dividends to stockholders. 
B) An investment of capital by the owners. 
C) Borrowing money from a bank to purchase new equipment. 
D) Buying supplies.

Question 5

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

Accepted Answer

A) Accounts Receivable 
B) Accounts Payable 
C) Advertising Expense 
D) Cash 
A) Accounts Receivable 
B) Accounts Payable 
C) Advertising Expense 
D) Cash

Question 6

Characteristics that make information useful do not include:

Accepted Answer

A) relevance. 
B) detail. 
C) consistency. 
D) understandability. 
A) relevance. 
B) detail. 
C) consistency. 
D) understandability.

Question 7

Cash activity from the buying and selling of productive resources,such as land,buildings and equipment,are reported as cash flows from ________ activities on the statement of cash flows.

Accepted Answer

A) investing 
B) operating 
C) financing 
D) managing 
A) investing 
B) operating 
C) financing 
D) managing

Question 8

The Sarbanes-Oxley Act (SOX)requires top management of companies to sign a report certifying that the financial statements are free of error.

Accepted Answer

A) True 
 B)False

Question 9

Golden Enterprises started the year with the following: Assets $50,000;Liabilities $15,000;Common Stock $30,000;Retained Earnings $5,000.During the year,the company earned revenue of $2,500,all of which was received in cash,and incurred expenses of $1,500,all of which were unpaid as of the end of the year.In addition,the company paid dividends of $500 to owners.Assume no other activities occurred during the year. What was the amount of Golden's net income for the year?

Accepted Answer

A) $1,000 
B) $500 
C) $1,500 
D) $2,500 
A) $1,000 
B) $500 
C) $1,500 
D) $2,500

Question 10

Generally Accepted Accounting Principles (GAAP)require profitable companies to distribute some of their earnings to their stockholders.

Accepted Answer

A) True 
 B)False

Question 11

In the U.S. ,Generally Accepted Accounting Principles (GAAP)are established by the:

Accepted Answer

A) International Accounting Standards Board (IAS
B) . 
B) Public Company Accounting Oversight Board (PCAO
B) . 
C) Financial Accounting Standards Board (FAS
B) . 
D) American Institute of Certified Public Accountants (AICP
A) . 
A) International Accounting Standards Board (IAS
B) . 
B) Public Company Accounting Oversight Board (PCAO
B) . 
C) Financial Accounting Standards Board (FAS
B) . 
D) American Institute of Certified Public Accountants (AICP
A) .

Question 12

Cash paid for wages is an example of an operating activity on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 13

The Sarbanes-Oxley Act is a set of laws established to:

Accepted Answer

A) limit the amount of compensation received by executives in publicly traded companies. 
B) strengthen corporate reporting in the United States. 
C) enhance the conceptual framework of GAAP. 
D) redefine the display of financial statements. 
A) limit the amount of compensation received by executives in publicly traded companies. 
B) strengthen corporate reporting in the United States. 
C) enhance the conceptual framework of GAAP. 
D) redefine the display of financial statements.

Question 14

Which of the following items appear on more than one financial statement?

Accepted Answer

A) Ending Cash and ending Retained Earnings 
B) Ending Cash and beginning Retained Earnings 
C) Sales Revenue and ending Retained Earnings 
D) Beginning Cash and Sales Revenue 
A) Ending Cash and ending Retained Earnings 
B) Ending Cash and beginning Retained Earnings 
C) Sales Revenue and ending Retained Earnings 
D) Beginning Cash and Sales Revenue

Question 15

Match the acronym with the description that best reflects it.(There are more descriptions than acronyms. )
-SOX

Accepted Answer

A) The U.S.agency that must approve mergers between very large publicly owned corporations. 
B) The U.S.Board that approves the rules for auditing publicly owned companies. 
C) The organization that establishes business laws in the U.S. 
D) The Board that establishes the accounting rules that govern American owned corporations. 
E) This organization regulates activities associated with the stock market such as the reporting of financial data by publicly owned companies.
F)The national professional organization of accountants.
G)Rules of financial accounting created by the FASB for use in the United States.
H)A set of laws established to strengthen corporate reporting in the United States.
I)The Board that establishes international accounting standards.
J)The U.S.agency that certifies foreign accounting firms to practice in the U.S. 
A) The U.S.agency that must approve mergers between very large publicly owned corporations. 
B) The U.S.Board that approves the rules for auditing publicly owned companies. 
C) The organization that establishes business laws in the U.S. 
D) The Board that establishes the accounting rules that govern American owned corporations. 
E) This organization regulates activities associated with the stock market such as the reporting of financial data by publicly owned companies.
F)The national professional organization of accountants.
G)Rules of financial accounting created by the FASB for use in the United States.
H)A set of laws established to strengthen corporate reporting in the United States.
I)The Board that establishes international accounting standards.
J)The U.S.agency that certifies foreign accounting firms to practice in the U.S.

Question 16

Golden Enterprises started the year with the following: Assets $50,000;Liabilities $15,000;Common Stock $30,000;Retained Earnings $5,000.During the year,the company earned revenue of $2,500,all of which was received in cash,and incurred expenses of $1,500,all of which were unpaid as of the end of the year.In addition,the company paid dividends of $500 to owners.Assume no other activities occurred during the year. The amount of Golden's retained earnings at the end of the year is:

Accepted Answer

A) $7,500. 
B) $5,500. 
C) $6,000. 
D) $500. 
A) $7,500. 
B) $5,500. 
C) $6,000. 
D) $500.

Question 17

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

Accepted Answer

A) Accounts Payable 
B) Common Stock 
C) Notes Payable 
D) Salaries and Wages Payable 
A) Accounts Payable 
B) Common Stock 
C) Notes Payable 
D) Salaries and Wages Payable

Question 18

According to Generally Accepted Accounting Principles,which of the following is not a characteristic of useful financial information?

Accepted Answer

A) Comparable 
B) Verifiable 
C) Timely 
D) Ethical 
A) Comparable 
B) Verifiable 
C) Timely 
D) Ethical

Question 19

What is the main goal of GAAP?

Accepted Answer

A) To help ensure that financial decisions are made in a professional and ethical manner. 
B) To establish standards that help to prevent and detect fraudulent acts by management. 
C) To ensure that the financial information produced by companies is useful to present and potential investors and other parties in making decisions. 
D) To oversee the stock exchanges and financial reporting by public companies in the United States. 
A) To help ensure that financial decisions are made in a professional and ethical manner. 
B) To establish standards that help to prevent and detect fraudulent acts by management. 
C) To ensure that the financial information produced by companies is useful to present and potential investors and other parties in making decisions. 
D) To oversee the stock exchanges and financial reporting by public companies in the United States.

Question 20

The statement of cash flows shows the following information: Cash provided by operating activities of $33,000
Cash used by investing activities of $16,800
Cash used by financing activities of $5,800
The beginning cash was $28,000.What is the amount of cash at the end of the period?

Accepted Answer

A) $83,600. 
B) $61,000. 
C) $17,600. 
D) $38,400. 
A) $83,600. 
B) $61,000. 
C) $17,600. 
D) $38,400.

Match the term to the appropriate definition.(There are more definitions than terms. ) -Income Statement

In order to be considered useful,information must have two fundamental characteristics: reliability and understandability.

The owner is not responsible for the entity's taxes and debts if the entity is organized as a(n):

Which of the following would not represent a financing activity?

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

Characteristics that make information useful do not include:

Cash activity from the buying and selling of productive resources,such as land,buildings and equipment,are reported as cash flows from ________ activities on the statement of cash flows.

The Sarbanes-Oxley Act (SOX)requires top management of companies to sign a report certifying that the financial statements are free of error.

Generally Accepted Accounting Principles (GAAP)require profitable companies to distribute some of their earnings to their stockholders.

In the U.S. ,Generally Accepted Accounting Principles (GAAP)are established by the:

Cash paid for wages is an example of an operating activity on the statement of cash flows.

The Sarbanes-Oxley Act is a set of laws established to:

Which of the following items appear on more than one financial statement?

Match the acronym with the description that best reflects it.(There are more descriptions than acronyms. ) -SOX

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

According to Generally Accepted Accounting Principles,which of the following is not a characteristic of useful financial information?

What is the main goal of GAAP?

The statement of cash flows shows the following information: Cash provided by operating activities of $33,000 Cash used by investing activities of $16,800 Cash used by financing activities of $5,800 The beginning cash was $28,000.What is the amount of cash at the end of the period?

The Balance Sheet

The Income Statement

Adjustments,Financial Statements,and Financial Results

Fraud,Internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables,Bad Debt Expense,and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 1: Business Decisions and Financial Accounting

Match the term to the appropriate definition.(There are more definitions than terms. ) -Income Statement

In order to be considered useful,information must have two fundamental characteristics: reliability and understandability.

The owner is not responsible for the entity's taxes and debts if the entity is organized as a(n):

Which of the following would not represent a financing activity?

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

Characteristics that make information useful do not include:

Cash activity from the buying and selling of productive resources,such as land,buildings and equipment,are reported as cash flows from ________ activities on the statement of cash flows.

The Sarbanes-Oxley Act (SOX)requires top management of companies to sign a report certifying that the financial statements are free of error.

Generally Accepted Accounting Principles (GAAP)require profitable companies to distribute some of their earnings to their stockholders.

In the U.S. ,Generally Accepted Accounting Principles (GAAP)are established by the:

Cash paid for wages is an example of an operating activity on the statement of cash flows.

The Sarbanes-Oxley Act is a set of laws established to:

Which of the following items appear on more than one financial statement?

Match the acronym with the description that best reflects it.(There are more descriptions than acronyms. ) -SOX

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

According to Generally Accepted Accounting Principles,which of the following is not a characteristic of useful financial information?

What is the main goal of GAAP?

The statement of cash flows shows the following information: Cash provided by operating activities of $33,000 Cash used by investing activities of $16,800 Cash used by financing activities of $5,800 The beginning cash was $28,000.What is the amount of cash at the end of the period?

The Balance Sheet

The Income Statement

Adjustments,Financial Statements,and Financial Results

Fraud,Internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables,Bad Debt Expense,and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters