Question 1

Which of the following are the three basic elements of the balance sheet?

Accepted Answer

A) Assets,liabilities,and retained earnings. 
B) Assets,liabilities,and common stock. 
C) Assets,liabilities,and revenues. 
D) Assets,liabilities,and stockholders' equity. 
A) Assets,liabilities,and retained earnings. 
B) Assets,liabilities,and common stock. 
C) Assets,liabilities,and revenues. 
D) Assets,liabilities,and stockholders' equity.

Question 2

Paying a cash dividend to stockholders is a(n):

Accepted Answer

A) operating activity. 
B) investing activity. 
C) financing activity. 
D) expense. 
A) operating activity. 
B) investing activity. 
C) financing activity. 
D) expense.

Question 3

The Statement of Cash Flows for the current year contained the following:   The change in cash for the current year was an increase of $14,000.
What was the amount of cash flows from (used in)investing activities?

Accepted Answer

A) ($1,000) 
B) ($40,000) 
C) ($10,000) 
D) $10,000 
A) ($1,000) 
B) ($40,000) 
C) ($10,000) 
D) $10,000

Question 4

When faced with an ethical dilemma,an accountant should:

Accepted Answer

A) identify who will be affected by the situation,identify and evaluate the alternative courses of action,and choose the alternative that is the most ethical. 
B) report the matter to the SEC. 
C) report the matter to the IRS. 
D) resign. 
A) identify who will be affected by the situation,identify and evaluate the alternative courses of action,and choose the alternative that is the most ethical. 
B) report the matter to the SEC. 
C) report the matter to the IRS. 
D) resign.

Question 5

Net income that has been paid out to the company's stockholders for their own personal use is referred to as:

Accepted Answer

A) dividends. 
B) equities. 
C) revenues. 
D) retained earnings. 
A) dividends. 
B) equities. 
C) revenues. 
D) retained earnings.

Question 6

Which of the following would not affect a company's net income?

Accepted Answer

A) A change in the company's income taxes 
B) Changing the selling price of a company's product 
C) Paying a dividend to stockholders 
D) Advertising a new product 
A) A change in the company's income taxes 
B) Changing the selling price of a company's product 
C) Paying a dividend to stockholders 
D) Advertising a new product

Question 7

A company incurred $5,000 for rent for the last month of Year 5.The company paid the bill during the first month of Year 6.Which of the following statements is correct?

Accepted Answer

A) The related $5,000 should be reported on the income statement for Year 5 as Rent Expense. 
B) Since it has not been paid,this bill would not be reported in the financial statements for Year 5. 
C) The related $5,000 should be included in Accounts Receivable on the balance sheet at the end of Year 5. 
D) The related $5,000 should be included in Rent Expense on the balance sheet at the end Year 5. 
A) The related $5,000 should be reported on the income statement for Year 5 as Rent Expense. 
B) Since it has not been paid,this bill would not be reported in the financial statements for Year 5. 
C) The related $5,000 should be included in Accounts Receivable on the balance sheet at the end of Year 5. 
D) The related $5,000 should be included in Rent Expense on the balance sheet at the end Year 5.

Question 8

Ace Electronics paid $8,000 of the $10,000 its employees had earned during the period.Ace Electronics should report Salaries and Wages Expense of ________ on the income statement,Salaries and Wages Payable of ________ on the balance sheet,and a reduction in Cash of ________.

Accepted Answer

A) $0;$10,000;$0 
B) $8,000;$2,000;$0 
C) $2,000;$2,000;$0 
D) $10,000;$2,000;$8,000 
A) $0;$10,000;$0 
B) $8,000;$2,000;$0 
C) $2,000;$2,000;$0 
D) $10,000;$2,000;$8,000

Question 9

Stockholders' equity is the difference between a company's assets and its liabilities.

Accepted Answer

A) True 
 B)False

Question 10

When several parties can reach similar values in financial statements by using similar methods,the information is said to be:

Accepted Answer

A) comparable. 
B) understandable. 
C) verifiable. 
D) timely. 
A) comparable. 
B) understandable. 
C) verifiable. 
D) timely.

Question 11

Which of the following statements is prepared as of a point in time?

Accepted Answer

A) Income Statement 
B) Statement of Retained Earnings 
C) Balance Sheet 
D) Statement of Cash Flows 
A) Income Statement 
B) Statement of Retained Earnings 
C) Balance Sheet 
D) Statement of Cash Flows

Question 12

Which of the following financial statements shows how net income (loss)and dividends impacted a stockholders' equity account?

Accepted Answer

A) Statement of Retained Earnings 
B) Balance Sheet 
C) Statement of Cash Flows 
D) Income Statement 
A) Statement of Retained Earnings 
B) Balance Sheet 
C) Statement of Cash Flows 
D) Income Statement

Question 13

A company owes $200,000 on a bank loan.It will be reported by the company as Accounts Payable.

Accepted Answer

A) True 
 B)False

Question 14

Choose the appropriate letter to match the terms to the blanks below to complete the relevant equation for each financial statement.
FINANCIAL STATEMENT EQUATION
   TERM
A.Cash at beginning of year
B.Net cash flow from operating activities
C.Balance of retained earnings from previous year
D.Net cash flow from investing activities
E.Liabilities
F.Net cash flow from financing activities
G.Balance of retained earnings at end of year
H.Net income
I.Revenue
J.Assets
K.Stockholders' equity
L.Expenses
M.Cash at end of year
N.Dividends paid

Accepted Answer

Balance Sheet:J = E + K,Income

Question 15

A net loss for a period arises when:

Accepted Answer

A) assets are greater than liabilities. 
B) revenues are less than expenses. 
C) liabilities are greater than stockholder's equity. 
D) revenues are greater than expenses. 
A) assets are greater than liabilities. 
B) revenues are less than expenses. 
C) liabilities are greater than stockholder's equity. 
D) revenues are greater than expenses.

Question 16

The purpose of a statement of retained earnings is to:

Accepted Answer

A) estimate the current value of a company's assets. 
B) report the way that net income and dividends affected the financial position of the company during the period. 
C) show where the cash is flowing into and out of a company. 
D) report the specific revenues and expenses arising during the period. 
A) estimate the current value of a company's assets. 
B) report the way that net income and dividends affected the financial position of the company during the period. 
C) show where the cash is flowing into and out of a company. 
D) report the specific revenues and expenses arising during the period.

Question 17

If Boward Co.has Common Stock of $40,000,total assets of $85,000,and total liabilities of $35,000,its Retained Earnings equals:

Accepted Answer

A) $10,000. 
B) $45,000. 
C) $50,000. 
D) $55,000. 
A) $10,000. 
B) $45,000. 
C) $50,000. 
D) $55,000.

Question 18

The separate entity assumption means:

Accepted Answer

A) a company's financial statements reflect only the business activities of that company. 
B) each separate owner's finances must be revealed in the financial statements. 
C) each separate entity that has a claim on a company's assets must be shown in the financial statements. 
D) if the business is a sole proprietorship,the owners' personal activities are included in the company's financial statements. 
A) a company's financial statements reflect only the business activities of that company. 
B) each separate owner's finances must be revealed in the financial statements. 
C) each separate entity that has a claim on a company's assets must be shown in the financial statements. 
D) if the business is a sole proprietorship,the owners' personal activities are included in the company's financial statements.

Question 19

Which of the following descriptions about a note payable is correct?

Accepted Answer

A) Written promise to repay a loan 
B) A type of long-term asset 
C) Generally informal in nature 
D) Reported as part of stockholders' equity on the balance sheet 
A) Written promise to repay a loan 
B) A type of long-term asset 
C) Generally informal in nature 
D) Reported as part of stockholders' equity on the balance sheet

Question 20

Assets reported on the balance sheet include:

Accepted Answer

A) Accounts Receivable,Sales Revenue,and Cash. 
B) Equipment,Supplies Expense,and Cash. 
C) Accounts Payable,Retained Earnings,and Cash. 
D) Accounts Receivable,Equipment,and Cash. 
A) Accounts Receivable,Sales Revenue,and Cash. 
B) Equipment,Supplies Expense,and Cash. 
C) Accounts Payable,Retained Earnings,and Cash. 
D) Accounts Receivable,Equipment,and Cash.

Which of the following are the three basic elements of the balance sheet?

Paying a cash dividend to stockholders is a(n):

The Statement of Cash Flows for the current year contained the following: The change in cash for the current year was an increase of $14,000. What was the amount of cash flows from (used in)investing activities?

When faced with an ethical dilemma,an accountant should:

Net income that has been paid out to the company's stockholders for their own personal use is referred to as:

Which of the following would not affect a company's net income?

A company incurred $5,000 for rent for the last month of Year 5.The company paid the bill during the first month of Year 6.Which of the following statements is correct?

Ace Electronics paid $8,000 of the $10,000 its employees had earned during the period.Ace Electronics should report Salaries and Wages Expense of on the income statement,Salaries and Wages Payable of on the balance sheet,and a reduction in Cash of .

Stockholders' equity is the difference between a company's assets and its liabilities.

When several parties can reach similar values in financial statements by using similar methods,the information is said to be:

Which of the following statements is prepared as of a point in time?

Which of the following financial statements shows how net income (loss)and dividends impacted a stockholders' equity account?

A company owes $200,000 on a bank loan.It will be reported by the company as Accounts Payable.

A net loss for a period arises when:

The purpose of a statement of retained earnings is to:

If Boward Co.has Common Stock of $40,000,total assets of $85,000,and total liabilities of $35,000,its Retained Earnings equals:

The separate entity assumption means:

Which of the following descriptions about a note payable is correct?

Assets reported on the balance sheet include:

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

Which of the following are the three basic elements of the balance sheet?

Paying a cash dividend to stockholders is a(n):

The Statement of Cash Flows for the current year contained the following: The change in cash for the current year was an increase of $14,000. What was the amount of cash flows from (used in)investing activities?

When faced with an ethical dilemma,an accountant should:

Net income that has been paid out to the company's stockholders for their own personal use is referred to as:

Which of the following would not affect a company's net income?

A company incurred $5,000 for rent for the last month of Year 5.The company paid the bill during the first month of Year 6.Which of the following statements is correct?

Ace Electronics paid $8,000 of the $10,000 its employees had earned during the period.Ace Electronics should report Salaries and Wages Expense of ________ on the income statement,Salaries and Wages Payable of ________ on the balance sheet,and a reduction in Cash of ________.

Stockholders' equity is the difference between a company's assets and its liabilities.

When several parties can reach similar values in financial statements by using similar methods,the information is said to be:

Which of the following statements is prepared as of a point in time?

Which of the following financial statements shows how net income (loss)and dividends impacted a stockholders' equity account?

A company owes $200,000 on a bank loan.It will be reported by the company as Accounts Payable.

A net loss for a period arises when:

The purpose of a statement of retained earnings is to:

If Boward Co.has Common Stock of $40,000,total assets of $85,000,and total liabilities of $35,000,its Retained Earnings equals:

The separate entity assumption means:

Which of the following descriptions about a note payable is correct?

Assets reported on the balance sheet include:

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

Ace Electronics paid $8,000 of the $10,000 its employees had earned during the period.Ace Electronics should report Salaries and Wages Expense of on the income statement,Salaries and Wages Payable of on the balance sheet,and a reduction in Cash of .