Question 1

Public corporations are businesses:

Accepted Answer

A) owned by two or more people,each of whom is personally liable for the debts of the business. 
B) whose stock is bought and sold on a stock exchange. 
C) whose stock is bought and sold privately. 
D) where stock is not used as evidence of ownership. 
A) owned by two or more people,each of whom is personally liable for the debts of the business. 
B) whose stock is bought and sold on a stock exchange. 
C) whose stock is bought and sold privately. 
D) where stock is not used as evidence of ownership.

Question 2

Amounts earned by selling goods or services to customers are called:

Accepted Answer

A) revenues. 
B) expenses. 
C) dividends. 
D) common stocks. 
A) revenues. 
B) expenses. 
C) dividends. 
D) common stocks.

Question 3

The separate entity assumption assumes:

Accepted Answer

A) the financial reports of a business include only the results of that business's activities. 
B) assets equal liabilities plus stockholder's equity. 
C) revenues and expenses are reported in separate sections of a company's income statement. 
D) assets are reported in a separate financial statement from liabilities. 
A) the financial reports of a business include only the results of that business's activities. 
B) assets equal liabilities plus stockholder's equity. 
C) revenues and expenses are reported in separate sections of a company's income statement. 
D) assets are reported in a separate financial statement from liabilities.

Question 4

Directors of a corporation:

Accepted Answer

A) want to ensure they will be paid for the goods and services they deliver. 
B) oversee managers to ensure their decisions are in the best interests of its stockholders. 
C) assess the financial strength of a business and attempt to estimate its value. 
D) are responsible for the functioning of stock markets and ensuring that taxes are correctly computed. 
A) want to ensure they will be paid for the goods and services they deliver. 
B) oversee managers to ensure their decisions are in the best interests of its stockholders. 
C) assess the financial strength of a business and attempt to estimate its value. 
D) are responsible for the functioning of stock markets and ensuring that taxes are correctly computed.

Question 5

A sole proprietorship is:

Accepted Answer

A) a separate legal and accounting entity from its owner(s). 
B) owned and operated by one individual. 
C) considered a public company. 
D) can easily raise large amounts of capital for growth. 
A) a separate legal and accounting entity from its owner(s). 
B) owned and operated by one individual. 
C) considered a public company. 
D) can easily raise large amounts of capital for growth.

Question 6

Which of the following statements about financial statements is not correct?

Accepted Answer

A) Cash flows from financing activities would appear on the Statement of Cash Flows. 
B) Dividends would appear on the Statement of Retained Earnings. 
C) Assets would appear on the Income Statement. 
D) Revenues would appear on the Income Statement. 
A) Cash flows from financing activities would appear on the Statement of Cash Flows. 
B) Dividends would appear on the Statement of Retained Earnings. 
C) Assets would appear on the Income Statement. 
D) Revenues would appear on the Income Statement.

Question 7

Which of the following would be reported on the income statement for Year 2?

Accepted Answer

A) Supplies that were purchased and used in Year 1 but paid for in Year 2. 
B) Supplies that were purchased in Year 1,but used in Year 2. 
C) Dividends that were paid in Year 2. 
D) Accounts Receivable as of December 31,Year 2. 
A) Supplies that were purchased and used in Year 1 but paid for in Year 2. 
B) Supplies that were purchased in Year 1,but used in Year 2. 
C) Dividends that were paid in Year 2. 
D) Accounts Receivable as of December 31,Year 2.

Question 8

Which of the following is not an expense?

Accepted Answer

A) Wages of employees 
B) Interest incurred on a note payable 
C) Dividends 
D) Corporate income tax 
A) Wages of employees 
B) Interest incurred on a note payable 
C) Dividends 
D) Corporate income tax

Question 9

An economic resource that is owned by a company and will provide future benefits is referred to as:

Accepted Answer

A) revenue. 
B) an asset. 
C) retained earnings. 
D) net income. 
A) revenue. 
B) an asset. 
C) retained earnings. 
D) net income.

Question 10

Common Stock is reported as an asset on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 11

Use the following Year 3 data:
 $\begin{array}{lr}
\text { Other Selling and Administrative Expenses } & \$ 1,050,300 \
\text { Other Expenses } & 247,600 \
\text { Sales Revenue } & 4,885,300 \
\text { Advertising and Promotion Expenses } & 552,500 \
\text { Salaries and Wages Expense } & 2,524,400 \
\text { Income Tax Expense } & 166,500 \
\text { Interest Expense } & 113,900
\end{array}$ Required:
Prepare the annual income statement for Kvass,Inc.

Accepted Answer

The answer of Use the following Year 3 data:
 \(\begin{array}{lr}
\text...

Question 12

The amount of beginning retained earnings is equal to the:

Accepted Answer

A) beginning retained earnings of the prior year. 
B) ending retained earnings of the prior year. 
C) beginning retained earnings of the next year. 
D) ending retained earnings of the next year. 
A) beginning retained earnings of the prior year. 
B) ending retained earnings of the prior year. 
C) beginning retained earnings of the next year. 
D) ending retained earnings of the next year.

Question 13

Revenue is reported on the income statement only if cash was received at the point of sale.

Accepted Answer

A) True 
 B)False

Question 14

The main goal of both U.S.GAAP and IFRS is to:

Accepted Answer

A) ensure that companies produce useful information for capital providers. 
B) reduce the number of required financial statements. 
C) prevent all fraud and ensure the amounts reported are precise to the penny. 
D) ensure that companies become more profitable. 
A) ensure that companies produce useful information for capital providers. 
B) reduce the number of required financial statements. 
C) prevent all fraud and ensure the amounts reported are precise to the penny. 
D) ensure that companies become more profitable.

Question 15

The following accounts are taken from the December 31,Year 4 financial statements of a company.   What is the amount of net income for Year 4?

Accepted Answer

A) $3,825 
B) $1,825 
C) $10,300 
D) $5,625 
A) $3,825 
B) $1,825 
C) $10,300 
D) $5,625

Question 16

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

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 17

The first year of operations for a company was Year 1.The net income for Year 1 was $20,000 and dividends of $12,000 were paid.In Year 2,the company reported net income of $34,000 and paid dividends of $5,000.At the end of Year 1,the company had total assets of $150,000.At the end of Year 2,the company had total assets of $240,000. What is the amount of retained earnings at the end of Year 2?

Accepted Answer

A) $37,000 
B) $240,000 
C) $29,000 
D) $269,000 
A) $37,000 
B) $240,000 
C) $29,000 
D) $269,000

Question 18

Which of the following statements about a company's fiscal year is correct?

Accepted Answer

A) All companies have a December 31 year end. 
B) It usually corresponds to a company's slow period. 
C) It always corresponds to the calendar year. 
D) The Financial Accounting Standards Board assigns a year-end to each company. 
A) All companies have a December 31 year end. 
B) It usually corresponds to a company's slow period. 
C) It always corresponds to the calendar year. 
D) The Financial Accounting Standards Board assigns a year-end to each company.

Question 19

Find the missing data.

Accepted Answer

A) Total revenues are $3,810,200,other selling and administrative expenses are $1,051,500,and net income is $364,600. 
B) Total revenues are $2,495,300,other selling and administrative expenses are $1,051,500,and net income is ($950,300). 
C) Total revenues are $364,600,other selling and administrative expenses are $3,081,000,and net income is $7,255,800. 
D) Total revenues are $3,810,200,other selling and administrative expenses are $364,600,and net income is $7,255,800. 
A) Total revenues are $3,810,200,other selling and administrative expenses are $1,051,500,and net income is $364,600. 
B) Total revenues are $2,495,300,other selling and administrative expenses are $1,051,500,and net income is ($950,300). 
C) Total revenues are $364,600,other selling and administrative expenses are $3,081,000,and net income is $7,255,800. 
D) Total revenues are $3,810,200,other selling and administrative expenses are $364,600,and net income is $7,255,800.

Question 20

Information that always makes a difference in a decision is:

Accepted Answer

A) cash based. 
B) audited. 
C) provided by GAAP. 
D) relevant. 
A) cash based. 
B) audited. 
C) provided by GAAP. 
D) relevant.

Public corporations are businesses:

Amounts earned by selling goods or services to customers are called:

The separate entity assumption assumes:

Directors of a corporation:

A sole proprietorship is:

Which of the following statements about financial statements is not correct?

Which of the following would be reported on the income statement for Year 2?

Which of the following is not an expense?

An economic resource that is owned by a company and will provide future benefits is referred to as:

Common Stock is reported as an asset on the balance sheet.

The amount of beginning retained earnings is equal to the:

Revenue is reported on the income statement only if cash was received at the point of sale.

The main goal of both U.S.GAAP and IFRS is to:

The following accounts are taken from the December 31,Year 4 financial statements of a company. What is the amount of net income for Year 4?

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

Which of the following statements about a company's fiscal year is correct?

Find the missing data.

Information that always makes a difference in a decision is:

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

Public corporations are businesses:

Amounts earned by selling goods or services to customers are called:

The separate entity assumption assumes:

Directors of a corporation:

A sole proprietorship is:

Which of the following statements about financial statements is not correct?

Which of the following would be reported on the income statement for Year 2?

Which of the following is not an expense?

An economic resource that is owned by a company and will provide future benefits is referred to as:

Common Stock is reported as an asset on the balance sheet.

The amount of beginning retained earnings is equal to the:

Revenue is reported on the income statement only if cash was received at the point of sale.

The main goal of both U.S.GAAP and IFRS is to:

The following accounts are taken from the December 31,Year 4 financial statements of a company. What is the amount of net income for Year 4?

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

Which of the following statements about a company's fiscal year is correct?

Find the missing data.

Information that always makes a difference in a decision is:

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