Question 1

Additional paid-in capital is reported on the balance sheet as a component of shareholders' equity.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following describes the impact on the balance sheet of paying a current liability using cash?

Accepted Answer

A) Current assets will decrease. 
B) Current liabilities will increase. 
C) Stockholders' equity will decrease. 
D) Total assets will remain the same. 
A) Current assets will decrease. 
B) Current liabilities will increase. 
C) Stockholders' equity will decrease. 
D) Total assets will remain the same.

Question 3

Which of the following journal entries is correct when a business entity pays cash for advertising to be used next year?

Accepted Answer

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

Question 4

In order for information to be relevant,the information needs to be complete,neutral,and free from error.

Accepted Answer

A) True 
 B)False

Question 5

An objective of preparing the trial balance is to test the equality of debits and credits.

Accepted Answer

A) True 
 B)False

Question 6

The Superior Company has provided the following account balances:
Cash $152,000;
Short-term investments $18,000;
Accounts receivable $36,000;
Inventory $116,000;
Long-term notes receivable $44,000;
Equipment $174,000;
Factory Building $270,000;
Intangible assets $33,000;
Accounts payable $130,000;
Accrued liabilities payable $19,000;
Short-term notes payable $84,000;
Long-term notes payable $169,000.

What is Superior's stockholders' equity?

Accepted Answer

Assets = Debit balances.Total assets = $

Question 7

Borrowing cash from a bank would result in which of the following?

Accepted Answer

A) A debit to cash and a credit to notes payable. 
B) A debit to notes payable and a credit to cash. 
C) A debit to both cash and notes payable. 
D) A debit to cash and a credit to additional paid-in capital. 
A) A debit to cash and a credit to notes payable. 
B) A debit to notes payable and a credit to cash. 
C) A debit to both cash and notes payable. 
D) A debit to cash and a credit to additional paid-in capital.

Question 8

Which of the following describes the impact on the balance sheet of purchasing supplies for cash?

Accepted Answer

A) Current assets will decrease. 
B) Current assets will increase. 
C) Stockholders' equity will decrease. 
D) Total assets remain the same. 
A) Current assets will decrease. 
B) Current assets will increase. 
C) Stockholders' equity will decrease. 
D) Total assets remain the same.

Question 9

In order for information to be relevant,the information should have both predictive and/or feedback value.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following assumptions implies that the assets and liabilities of the business are accounted for separately from the assets and liabilities of the owners?

Accepted Answer

A) Monetary unit assumption. 
B) Continuity assumption. 
C) Historical cost principle. 
D) Separate entity assumption. 
A) Monetary unit assumption. 
B) Continuity assumption. 
C) Historical cost principle. 
D) Separate entity assumption.

Question 11

Assets are reported on the balance sheet in the order of liquidity.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following liability accounts does not usually require a future cash payment?

Accepted Answer

A) Accounts payable. 
B) Unearned revenues. 
C) Taxes payable. 
D) Notes payable. 
A) Accounts payable. 
B) Unearned revenues. 
C) Taxes payable. 
D) Notes payable.

Question 13

Which of the following would result when a company sells additional shares of common stock for cash?

Accepted Answer

A) A noncurrent liability and a financing cash flow are created. 
B) Common stock increases and a financing cash flow results. 
C) A noncurrent liability and an investing cash flow are created. 
D) Common stock increases and an investing cash flow results. 
A) A noncurrent liability and a financing cash flow are created. 
B) Common stock increases and a financing cash flow results. 
C) A noncurrent liability and an investing cash flow are created. 
D) Common stock increases and an investing cash flow results.

Question 14

Which of the following statements is false?

Accepted Answer

A) The common stock account has a credit balance. 
B) The additional paid-in capital account has a credit balance. 
C) Common stock may be issued for more than par value. 
D) The par value of common stock represents the stock's market value. 
A) The common stock account has a credit balance. 
B) The additional paid-in capital account has a credit balance. 
C) Common stock may be issued for more than par value. 
D) The par value of common stock represents the stock's market value.

Question 15

Assets,liabilities,and stockholders' equity are all found within which of the following financial statements?

Accepted Answer

A) Balance sheet. 
B) Income statement. 
C) The investing activities section of the Statement of Cash Flows. 
D) Statement of stockholders' equity. 
A) Balance sheet. 
B) Income statement. 
C) The investing activities section of the Statement of Cash Flows. 
D) Statement of stockholders' equity.

Question 16

Which of the following transactions would result in a decrease in the current ratio?

Accepted Answer

A) Collection of cash from an account receivable. 
B) Selling shares of stock to stockholders in exchange for cash. 
C) Purchasing a delivery vehicle by signing a long-term note payable. 
D) Purchasing land by paying cash. 
A) Collection of cash from an account receivable. 
B) Selling shares of stock to stockholders in exchange for cash. 
C) Purchasing a delivery vehicle by signing a long-term note payable. 
D) Purchasing land by paying cash.

Question 17

On December 31,2019,the accounting records for Mountain Trail Corp.showed the following amounts:
   1.Prepare a balance sheet using GAAP as of December 31,2019.
2.Prepare a balance sheet using IFRS as of December 31,2019.

Accepted Answer

The answer of On December 31,2019,the accounting records for Mountain...

Question 18

The Pioneer Company has provided the following account balances: Cash $38,000;
Short-term investments $4,000;
Accounts receivable $48,000;
Supplies $6,000;
Long-term notes receivable $2,000;
Equipment $96,000;
Factory Building $180,000;
Intangible assets $6,000;
Accounts payable $30,000;
Accrued liabilities payable $4,000;
Short-term notes payable $14,000;
Long-term notes payable $92,000;
Common stock $180,000;
Retained earnings $60,000.
-
What is Pioneer's current ratio?

Accepted Answer

A) 2.00. 
B) 2.17. 
C) 2.71. 
D) 1.00. 
A) 2.00. 
B) 2.17. 
C) 2.71. 
D) 1.00.

Question 19

For each of the accounts listed below,indicate whether the typical or normal balance is a debit or credit.
A.Supplies
B.Notes payable
C.Retained earnings
D.Equipment
E.Prepaid insurance expense
F.Accounts receivable
G.Land
H.Additional paid-in capital
I.Accounts payable
J.Unearned revenue

Accepted Answer

A.Debit.
B.Credit.
C.Credit.
D.Debit.
E.

Question 20

The continuity assumption states that a business will continue to operate into the foreseeable future.

Accepted Answer

A) True 
 B)False

Additional paid-in capital is reported on the balance sheet as a component of shareholders' equity.

Which of the following describes the impact on the balance sheet of paying a current liability using cash?

Which of the following journal entries is correct when a business entity pays cash for advertising to be used next year?

In order for information to be relevant,the information needs to be complete,neutral,and free from error.

An objective of preparing the trial balance is to test the equality of debits and credits.

Borrowing cash from a bank would result in which of the following?

Which of the following describes the impact on the balance sheet of purchasing supplies for cash?

In order for information to be relevant,the information should have both predictive and/or feedback value.

Which of the following assumptions implies that the assets and liabilities of the business are accounted for separately from the assets and liabilities of the owners?

Assets are reported on the balance sheet in the order of liquidity.

Which of the following liability accounts does not usually require a future cash payment?

Which of the following would result when a company sells additional shares of common stock for cash?

Which of the following statements is false?

Assets,liabilities,and stockholders' equity are all found within which of the following financial statements?

Which of the following transactions would result in a decrease in the current ratio?

On December 31,2019,the accounting records for Mountain Trail Corp.showed the following amounts: 1.Prepare a balance sheet using GAAP as of December 31,2019. 2.Prepare a balance sheet using IFRS as of December 31,2019.

For each of the accounts listed below,indicate whether the typical or normal balance is a debit or credit. A.Supplies B.Notes payable C.Retained earnings D.Equipment E.Prepaid insurance expense F.Accounts receivable G.Land H.Additional paid-in capital I.Accounts payable J.Unearned revenue

The continuity assumption states that a business will continue to operate into the foreseeable future.

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

Additional paid-in capital is reported on the balance sheet as a component of shareholders' equity.

Which of the following describes the impact on the balance sheet of paying a current liability using cash?

Which of the following journal entries is correct when a business entity pays cash for advertising to be used next year?

In order for information to be relevant,the information needs to be complete,neutral,and free from error.

An objective of preparing the trial balance is to test the equality of debits and credits.

Borrowing cash from a bank would result in which of the following?

Which of the following describes the impact on the balance sheet of purchasing supplies for cash?

In order for information to be relevant,the information should have both predictive and/or feedback value.

Which of the following assumptions implies that the assets and liabilities of the business are accounted for separately from the assets and liabilities of the owners?

Assets are reported on the balance sheet in the order of liquidity.

Which of the following liability accounts does not usually require a future cash payment?

Which of the following would result when a company sells additional shares of common stock for cash?

Which of the following statements is false?

Assets,liabilities,and stockholders' equity are all found within which of the following financial statements?

Which of the following transactions would result in a decrease in the current ratio?

On December 31,2019,the accounting records for Mountain Trail Corp.showed the following amounts: 1.Prepare a balance sheet using GAAP as of December 31,2019. 2.Prepare a balance sheet using IFRS as of December 31,2019.

For each of the accounts listed below,indicate whether the typical or normal balance is a debit or credit. A.Supplies B.Notes payable C.Retained earnings D.Equipment E.Prepaid insurance expense F.Accounts receivable G.Land H.Additional paid-in capital I.Accounts payable J.Unearned revenue

The continuity assumption states that a business will continue to operate into the foreseeable future.

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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