Question 1

Which of the following would not  be included under the account category of expenses within the chart of accounts?

Accepted Answer

A) Cost of goods sold. 
B) Interest expense. 
C) Prepaid insurance expense. 
D) Income tax expense. 
A) Cost of goods sold. 
B) Interest expense. 
C) Prepaid insurance expense. 
D) Income tax expense.

Question 2

At the beginning of April,Warren Corporation's assets totaled $240,000 and liabilities totaled $60,000.During April the following summarized transactions occurred: Additional shares of stock were sold for $20,000 cash.
A building costing $95,000 was purchased using $10,000 cash and by signing an $85,000 long-term note payable.
Short-term investments costing $9,000 were purchased using cash.
$10,000 was paid to an employee as a loan;the employee signed a six-month note in exchange for the loan.
How much are Warren's total liabilities at the end of April?

Accepted Answer

A) $145,000. 
B) $155,000. 
C) $165,000. 
D) $135,000. 
A) $145,000. 
B) $155,000. 
C) $165,000. 
D) $135,000.

Question 3

Which of the following would be classified as financing cash flows on a statement of cash flows? 
1.Paying cash dividends.
2.Lending cash to others.
3.Issuing stock for cash.
4.Purchasing long-term assets for cash.

Accepted Answer

A) 1,2,3. 
B) 2,3,4. 
C) 1,3. 
D) 2,4. 
A) 1,2,3. 
B) 2,3,4. 
C) 1,3. 
D) 2,4.

Question 4

Which of the following transactions would not  be considered an external exchange?

Accepted Answer

A) The purchase of supplies on credit. 
B) Cash received from the issuance of common stock. 
C) Cash paid to a bank for interest on a loan. 
D) Using up insurance,which had been paid for in advance. 
A) The purchase of supplies on credit. 
B) Cash received from the issuance of common stock. 
C) Cash paid to a bank for interest on a loan. 
D) Using up insurance,which had been paid for in advance.

Question 5

The following journal entries with the amounts omitted were taken from the records of Lena Company:
   Write a brief explanation for each of the above transactions.

Accepted Answer

1.Stockholders invested cash into the co

Question 6

Financial reporting focuses on reporting the impact of transactions on an entity's financial position.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following direct effects on the accounting equation is not possible as a result of a single business transaction which impacts only two accounts?

Accepted Answer

A) An increase in an asset and a decrease in another asset. 
B) An increase in an asset and an increase in stockholders' equity. 
C) A decrease in stockholders' equity and an increase in an asset. 
D) An increase in a liability and an increase in an asset. 
A) An increase in an asset and a decrease in another asset. 
B) An increase in an asset and an increase in stockholders' equity. 
C) A decrease in stockholders' equity and an increase in an asset. 
D) An increase in a liability and an increase in an asset.

Question 8

Purchasing supplies for cash results in an increase in total assets for the purchasing company.

Accepted Answer

A) True 
 B)False

Question 9

Issuing stock in exchange for cash creates an increase in cash from a financing activity.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following transactions will cause both the left and right side of the accounting equation to decrease?

Accepted Answer

A) Collecting cash from a customer who owed us money. 
B) Paying a supplier for inventory we previously purchased on account. 
C) Borrowing money from a bank. 
D) Purchasing equipment using cash. 
A) Collecting cash from a customer who owed us money. 
B) Paying a supplier for inventory we previously purchased on account. 
C) Borrowing money from a bank. 
D) Purchasing equipment using cash.

Question 11

The current ratio is current assets divided by current liabilities.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following account balances would not be included in the calculation of the current ratio?

Accepted Answer

A) Accounts receivable. 
B) Short-term investments. 
C) Equipment. 
D) Supplies. 
A) Accounts receivable. 
B) Short-term investments. 
C) Equipment. 
D) Supplies.

Question 13

Stockholders' equity reflects the financing provided by owners.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following transactions would create an increase in cash from a financing activity?

Accepted Answer

A) Issuing shares of common stock to stockholders in exchange for cash. 
B) Selling a short-term stock investment in exchange for cash. 
C) Selling used equipment,which was a part of property and equipment,for cash. 
D) The payment of an account payable. 
A) Issuing shares of common stock to stockholders in exchange for cash. 
B) Selling a short-term stock investment in exchange for cash. 
C) Selling used equipment,which was a part of property and equipment,for cash. 
D) The payment of an account payable.

Question 15

Which of the following journal entries is correct when a business entity purchases a building by paying cash and by signing a note payable for the balance?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 16

Which of the following describes the impact on the balance sheet when cash is received from the collection of an account receivable?

Accepted Answer

A) Current assets will not change. 
B) Current assets will increase. 
C) Stockholders' equity will increase. 
D) Total assets will increase. 
A) Current assets will not change. 
B) Current assets will increase. 
C) Stockholders' equity will increase. 
D) Total assets will increase.

Question 17

What is the primary objective of financial reporting?

Accepted Answer

The primary objective of financial repor

Question 18

Which of the following would not be considered a current asset?

Accepted Answer

A) Inventory. 
B) Prepaid expenses. 
C) Land used in daily operations. 
D) Accounts receivable. 
A) Inventory. 
B) Prepaid expenses. 
C) Land used in daily operations. 
D) Accounts receivable.

Question 19

In what order are current assets listed on a balance sheet?

Accepted Answer

A) By dollar amount (largest first). 
B) By date of acquisition (earliest first). 
C) By liquidity. 
D) By relevance to the operation of the business. 
A) By dollar amount (largest first). 
B) By date of acquisition (earliest first). 
C) By liquidity. 
D) By relevance to the operation of the business.

Question 20

On January 1,2019,Dr.Beth Hill started a new professional corporation,Beth Hill,P.C. ,to practice medicine with an initial investment of $100,000 in exchange for 20,000 shares of $2 par value common stock.On June 30,2019,the accounting records showed the following amounts:
   1.Calculate the amounts for common stock and additional paid-in capital.
2.Prepare a balance sheet as of June 30,2019.

Accepted Answer

1.Total investment $100,000 ÷ 20,000 sha

Which of the following would not be included under the account category of expenses within the chart of accounts?

Which of the following would be classified as financing cash flows on a statement of cash flows? 1.Paying cash dividends. 2.Lending cash to others. 3.Issuing stock for cash. 4.Purchasing long-term assets for cash.

Which of the following transactions would not be considered an external exchange?

The following journal entries with the amounts omitted were taken from the records of Lena Company: Write a brief explanation for each of the above transactions.

Financial reporting focuses on reporting the impact of transactions on an entity's financial position.

Which of the following direct effects on the accounting equation is not possible as a result of a single business transaction which impacts only two accounts?

Purchasing supplies for cash results in an increase in total assets for the purchasing company.

Issuing stock in exchange for cash creates an increase in cash from a financing activity.

Which of the following transactions will cause both the left and right side of the accounting equation to decrease?

The current ratio is current assets divided by current liabilities.

Which of the following account balances would not be included in the calculation of the current ratio?

Stockholders' equity reflects the financing provided by owners.

Which of the following transactions would create an increase in cash from a financing activity?

Which of the following journal entries is correct when a business entity purchases a building by paying cash and by signing a note payable for the balance?

Which of the following describes the impact on the balance sheet when cash is received from the collection of an account receivable?

What is the primary objective of financial reporting?

Which of the following would not be considered a current asset?

In what order are current assets listed on a balance sheet?

Financial Statements and Business Decisions

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 Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

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Exam 2: Investing and Financing Decisions and the Accounting System

Which of the following would not be included under the account category of expenses within the chart of accounts?

Which of the following would be classified as financing cash flows on a statement of cash flows? 1.Paying cash dividends. 2.Lending cash to others. 3.Issuing stock for cash. 4.Purchasing long-term assets for cash.

Which of the following transactions would not be considered an external exchange?

The following journal entries with the amounts omitted were taken from the records of Lena Company: Write a brief explanation for each of the above transactions.

Financial reporting focuses on reporting the impact of transactions on an entity's financial position.

Which of the following direct effects on the accounting equation is not possible as a result of a single business transaction which impacts only two accounts?

Purchasing supplies for cash results in an increase in total assets for the purchasing company.

Issuing stock in exchange for cash creates an increase in cash from a financing activity.

Which of the following transactions will cause both the left and right side of the accounting equation to decrease?

The current ratio is current assets divided by current liabilities.

Which of the following account balances would not be included in the calculation of the current ratio?

Stockholders' equity reflects the financing provided by owners.

Which of the following transactions would create an increase in cash from a financing activity?

Which of the following journal entries is correct when a business entity purchases a building by paying cash and by signing a note payable for the balance?

Which of the following describes the impact on the balance sheet when cash is received from the collection of an account receivable?

What is the primary objective of financial reporting?

Which of the following would not be considered a current asset?

In what order are current assets listed on a balance sheet?

Financial Statements and Business Decisions

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 Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters