Exam 2: Investing and Financing Decisions and the Accounting System

A corporation has $80,000 in total assets, $36,000 in total liabilities, and a $12,000 credit balance in retained earnings. What is the balance in the contributed capital accounts?

(Multiple Choice)

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Question 41

When a company borrows money from a bank, the statement of cash flows will report a cash increase from an investing activity.

(True/False)

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Question 42

The current ratio is current assets divided by current liabilities.

(True/False)

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Question 43

Which of the following statements about stockholders' equity is false?

(Multiple Choice)

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Question 44

Which of the following would be classified as investing cash flows on a cash flow statement? 1. Acquiring a building by signing a long-term mortgage payable. 2) Lending cash to others. 3) Issuing stock for cash. 4) Purchasing long-term assets for cash. 5) Selling stock investments for cash.

(Multiple Choice)

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Question 45

Liability and stockholders' equity accounts normally have credit balances and are decreased by debiting the accounts.

(True/False)

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Question 46

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

(True/False)

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Question 47

How is the current ratio calculated and what does it measure?

(Essay)

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Question 48

Alpha Company issued 1,000 shares of $10 par value common stock to stockholders, in exchange for $15,000 cash. Which of the following correctly describes the impact of this transaction on Alpha's financial statements?

(Multiple Choice)

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Question 49

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

(Multiple Choice)

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Question 50

Which of the following statements is false?

(Multiple Choice)

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Question 51

Which of the following correctly describes retained earnings?

(Multiple Choice)

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Question 52

A company purchases a delivery van by paying $5,000 cash and by signing a $25,000 note payable. Which of the following correctly describes the recording of the delivery van purchase?

(Multiple Choice)

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Question 53

A journal entry is a written expression of the effects of a transaction on accounts and has equal debits and credits.

(True/False)

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Question 54

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

(True/False)

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Question 55

An account payable would be reported within which of the following financial statements?

(Multiple Choice)

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Question 56

The T-account is an actual account in the general ledger of the accounting records.

(True/False)

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Question 57

Which of the following statements is correct?

(Multiple Choice)

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Question 58

Common stock and additional-paid in capital represent the financing sources from shareholders.

(True/False)

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Question 59

Which of the following statements does not properly describe the current ratio?

(Multiple Choice)

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Question 60

Showing 41 - 60 of 132

A corporation has $80,000 in total assets, $36,000 in total liabilities, and a $12,000 credit balance in retained earnings. What is the balance in the contributed capital accounts?

When a company borrows money from a bank, the statement of cash flows will report a cash increase from an investing activity.

The current ratio is current assets divided by current liabilities.

Which of the following statements about stockholders' equity is false?

Which of the following would be classified as investing cash flows on a cash flow statement? 1. Acquiring a building by signing a long-term mortgage payable. 2) Lending cash to others. 3) Issuing stock for cash. 4) Purchasing long-term assets for cash. 5) Selling stock investments for cash.

Liability and stockholders' equity accounts normally have credit balances and are decreased by debiting the accounts.

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

How is the current ratio calculated and what does it measure?

Alpha Company issued 1,000 shares of $10 par value common stock to stockholders, in exchange for $15,000 cash. Which of the following correctly describes the impact of this transaction on Alpha's financial statements?

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

Which of the following statements is false?

Which of the following correctly describes retained earnings?

A company purchases a delivery van by paying $5,000 cash and by signing a $25,000 note payable. Which of the following correctly describes the recording of the delivery van purchase?

A journal entry is a written expression of the effects of a transaction on accounts and has equal debits and credits.

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

An account payable would be reported within which of the following financial statements?

The T-account is an actual account in the general ledger of the accounting records.

Which of the following statements is correct?

Common stock and additional-paid in capital represent the financing sources from shareholders.

Which of the following statements does not properly describe the current ratio?

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 Bonds

Reporting and Interpreting Owners Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

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