Question 1

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

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following describes the primary objective of financial accounting?

Accepted Answer

A) To provide useful economic information only to stockholders. 
B) To provide information about a business' future business strategies. 
C) To provide useful economic information about a business to help external parties make informed decisions. 
D) To provide useful economic information about a business to help internal parties make informed decisions. 
A) To provide useful economic information only to stockholders. 
B) To provide information about a business' future business strategies. 
C) To provide useful economic information about a business to help external parties make informed decisions. 
D) To provide useful economic information about a business to help internal parties make informed decisions. C

Question 3

Which of the following reflects the impact of a transaction where $200,000 cash was invested by stockholders in exchange for stock?

Accepted Answer

A) Assets and liabilities each increased $200,000. 
B) Assets and revenues each increased $200,000. 
C) Stockholders' equity and revenues each increased $200,000. 
D) Stockholders' equity and assets each increased $200,000. 
A) Assets and liabilities each increased $200,000. 
B) Assets and revenues each increased $200,000. 
C) Stockholders' equity and revenues each increased $200,000. 
D) Stockholders' equity and assets each increased $200,000. D

Question 4

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

Accepted Answer

A) Balance sheet 
B) Income statement 
C) Statement of retained earnings 
D) Statement of cash flows 
A) Balance sheet 
B) Income statement 
C) Statement of retained earnings 
D) Statement of cash flows

Question 5

Which of the following transactions would result in an increase 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 building by signing a long-term note payable. 
D) Declaration of a cash dividend by the board of directors. 
A) Collection of cash from an account receivable. 
B) Selling shares of stock to stockholders in exchange for cash. 
C) Purchasing a building by signing a long-term note payable. 
D) Declaration of a cash dividend by the board of directors.

Question 6

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

Accepted Answer

The answer of How is the current ratio calculated and...

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Which of the following would not be currently reported as an expense on the income statement?

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 9

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

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 10

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

Accepted Answer

A) It measures the ability of a firm to pay its debts in the short-run. 
B) It is current assets divided by current liabilities. 
C) It is a measure of a firm's short-run liquidity. 
D) It measures a firm's ability to pay its long-term debts as they mature. 
A) It measures the ability of a firm to pay its debts in the short-run. 
B) It is current assets divided by current liabilities. 
C) It is a measure of a firm's short-run liquidity. 
D) It measures a firm's ability to pay its long-term debts as they mature.

Question 11

Tiger Company's stockholders' equity at the beginning of the year was $175,000.During the year Tiger reported the following:
Net income of $79,000.
Dividend declarations totaling $17,000.
Issued stock to stockholders in exchange for $42,000 cash.
Stockholders sold some of their stock to other stockholders for $11,000 cash.
What is Tiger's stockholders' equity at the end of the year?

Accepted Answer

A) $296,000 
B) $279,000 
C) $290,000 
D) $273,000 
A) $296,000 
B) $279,000 
C) $290,000 
D) $273,000

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 is not considered to be a recordable transaction?

Accepted Answer

A) Signing a contract to have an outside cleaning service clean offices nightly. 
B) Paying employees their wages. 
C) Selling stock to investors. 
D) Buying equipment and agreeing to pay a note payable and interest at the end of a year. 
A) Signing a contract to have an outside cleaning service clean offices nightly. 
B) Paying employees their wages. 
C) Selling stock to investors. 
D) Buying equipment and agreeing to pay a note payable and interest at the end of a year.

Question 14

On January 1,2011,Dr.Beth Hill started a new professional corporation,Beth Hill,P.C.,to practice medicine with an initial investment of $100,000.On June 30,2011,the accounting records showed the following amounts:
 $$\begin{array} { l l } 
\text { Accounts Payable } & \$ 2,000 \
\text { Accounts Receivable } & \$ 6,200 \
\text { Cash } & \$ 48,100 \
\text { Contributed Capital } & \$ 100,000 \
\text { Office Equipment } & \$ 60,000 \
\text { Office Supplies } & \$ 3,500 \
\text { Retained Earnings } & \$ 5,800 \
\text { Notes Payable } & \$ 10,000
\end{array}$$ Requirement:
Prepare a balance sheet as of June 30,2011.

Accepted Answer

The answer of On January 1,2011,Dr.Beth Hill started a new...

Question 15

The accounting equation doesn't have to be in balance after the recording of each transaction.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following transactions wouldn't be considered an external exchange?

Accepted Answer

A) The purchase of inventory on credit from a supplier. 
B) Cash received from a credit customer. 
C) Cash paid for wages to employees. 
D) Using up insurance which was paid for in advance. 
A) The purchase of inventory on credit from a supplier. 
B) Cash received from a credit customer. 
C) Cash paid for wages to employees. 
D) Using up insurance which was paid for in advance.

Question 17

Which of the following transactions would create a cash inflow from a financing activity?

Accepted Answer

A) Issuing shares of 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, plant, and equipment. 
D) The payment of an account payable. 
A) Issuing shares of 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, plant, and equipment. 
D) The payment of an account payable.

Question 18

Which of the following journal entries is correct when a business entity issues stock to stockholders in exchange for cash?

Accepted Answer

A)  Cash
 $ \quad $ Retained Earnings 
B)  Cash
 $ \quad $Contributed Capital 
C)  Cash
 $ \quad $Accounts Payable 
D)  Contributed Capital
 $ \quad $ $ \quad $Cash 
A)  Cash
 $ \quad $ Retained Earnings 
B)  Cash
 $ \quad $Contributed Capital 
C)  Cash
 $ \quad $Accounts Payable 
D)  Contributed Capital
 $ \quad $ $ \quad $Cash

Question 19

Describe the general journal and the general ledger.

Accepted Answer

The answer of Describe the general journal and the general...

Question 20

Asset accounts have a debit balance and are increased by debiting the account.

Accepted Answer

A) True 
 B)False

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

Which of the following describes the primary objective of financial accounting?

Which of the following reflects the impact of a transaction where $200,000 cash was invested by stockholders in exchange for stock?

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

Which of the following transactions would result in an increase in the current ratio?

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

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

Which of the following would not be currently reported as an expense on the income statement?

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

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

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

Which of the following is not considered to be a recordable transaction?

The accounting equation doesn't have to be in balance after the recording of each transaction.

Which of the following transactions wouldn't be considered an external exchange?

Which of the following transactions would create a cash inflow from a financing activity?

Which of the following journal entries is correct when a business entity issues stock to stockholders in exchange for cash?

Describe the general journal and the general ledger.

Asset accounts have a debit balance and are increased by debiting the account.

Financial Statements and Business Decisions

Operating Decisions and the Income Statement

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; Natural Resources; and Intangibles

Reporting and Interpreting Liabilities

Reporting and Interpreting Bonds

Reporting and Interpreting Owners Equity

Reporting and Interpreting Investments in Other Corporations

Statement of Cash Flows

Analyzing Financial Statements

Filters

Exam 2: Investing and Financing Decisions and the Balance Sheet

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

Which of the following describes the primary objective of financial accounting?

Which of the following reflects the impact of a transaction where $200,000 cash was invested by stockholders in exchange for stock?

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

Which of the following transactions would result in an increase in the current ratio?

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

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

Which of the following would not be currently reported as an expense on the income statement?

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

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

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

Which of the following is not considered to be a recordable transaction?

The accounting equation doesn't have to be in balance after the recording of each transaction.

Which of the following transactions wouldn't be considered an external exchange?

Which of the following transactions would create a cash inflow from a financing activity?

Which of the following journal entries is correct when a business entity issues stock to stockholders in exchange for cash?

Describe the general journal and the general ledger.

Asset accounts have a debit balance and are increased by debiting the account.

Financial Statements and Business Decisions

Operating Decisions and the Income Statement

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; Natural Resources; and Intangibles

Reporting and Interpreting Liabilities

Reporting and Interpreting Bonds

Reporting and Interpreting Owners Equity

Reporting and Interpreting Investments in Other Corporations

Statement of Cash Flows

Analyzing Financial Statements

Filters