Question 1

Which of the following statements is true?

Accepted Answer

A)  Contributed capital is a noncurrent asset. 
B)  Current liabilities are debts expected to be paid within the next year. 
C) Current assets are resources of a company that might include cash and copyrights. 
D) Patents, copyrights, and research and development expense are classified as intangible assets on the balance sheet. 
A)  Contributed capital is a noncurrent asset. 
B)  Current liabilities are debts expected to be paid within the next year. 
C) Current assets are resources of a company that might include cash and copyrights. 
D) Patents, copyrights, and research and development expense are classified as intangible assets on the balance sheet.

Question 2

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 3

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

Accepted Answer

A) True 
 B)False

Question 4

The accounting equation does not have to be in balance after the recording of each transaction.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following correctly describes the recording of a dividend declaration by a company's board of directors?

Accepted Answer

A)  A debit to retained earnings and a credit to cash. 
B)  A debit to additional paid-in capital and a credit to dividends payable. 
C) A debit to cash and a credit to retained earnings. 
D) A debit to retained earnings and a credit to dividends payable. 
A)  A debit to retained earnings and a credit to cash. 
B)  A debit to additional paid-in capital and a credit to dividends payable. 
C) A debit to cash and a credit to retained earnings. 
D) A debit to retained earnings and a credit to dividends payable.

Question 6

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 7

Stockholders' equity reflects the financing provided by owners.

Accepted Answer

A) True 
 B)False

Question 8

A company's January 1, 2014 balance sheet reported total assets of $120,000 and total liabilities of $40,000. During January 2014, the following transactions occurred: (A) the company issued stock and collected cash totaling $30,000; (B) the company paid an account payable of $6,000; (C) the company purchased supplies for $1,000 with cash; (D) the company purchased land for $60,000 paying $10,000 with cash and signing a note payable for the balance. What is total stockholders' equity after the transactions above?

Accepted Answer

A)  $30,000. 
B)  $110,000. 
C) $80,000. 
D) $194,000. 
A)  $30,000. 
B)  $110,000. 
C) $80,000. 
D) $194,000.

Question 9

Many valuable assets such as trademarks and copyrights are not reported on a company's balance sheet.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following events will cause retained earnings to increase?

Accepted Answer

A)  Dividends declared by the Board of Directors. 
B)  Net income reported for the period. 
C) Net loss reported for the period. 
D) Issuance of stock in exchange for cash. 
A)  Dividends declared by the Board of Directors. 
B)  Net income reported for the period. 
C) Net loss reported for the period. 
D) Issuance of stock in exchange for cash.

Question 11

An asset account normally has a debit balance and is increased by debiting the account.

Accepted Answer

A) True 
 B)False

Question 12

A company's assets and stockholders' equity both increase when the company sells additional shares of stock in exchange for cash.

Accepted Answer

A) True 
 B)False

Which of the following statements is true?

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

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

The accounting equation does not have to be in balance after the recording of each transaction.

Which of the following correctly describes the recording of a dividend declaration by a company's board of directors?

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

Stockholders' equity reflects the financing provided by owners.

Many valuable assets such as trademarks and copyrights are not reported on a company's balance sheet.

Which of the following events will cause retained earnings to increase?

An asset account normally has a debit balance and is increased by debiting the account.

A company's assets and stockholders' equity both increase when the company sells additional shares of stock in exchange for cash.

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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Exam 2: Investing and Financing Decisions and the Accounting System

Which of the following statements is true?

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

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

The accounting equation does not have to be in balance after the recording of each transaction.

Which of the following correctly describes the recording of a dividend declaration by a company's board of directors?

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

Stockholders' equity reflects the financing provided by owners.

Many valuable assets such as trademarks and copyrights are not reported on a company's balance sheet.

Which of the following events will cause retained earnings to increase?

An asset account normally has a debit balance and is increased by debiting the account.

A company's assets and stockholders' equity both increase when the company sells additional shares of stock in exchange for cash.

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

Filters