Question 1

An economic resource that is owned by a company and will provide future benefits is referred to as:

Accepted Answer

A)  revenue. 
B)  an asset. 
C)  retained earnings. 
D)  net income. 
A)  revenue. 
B)  an asset. 
C)  retained earnings. 
D)  net income.

Question 2

The WC Company borrowed $26,500 from a bank during the year.This borrowing would be reported on the statement of cash flows as a(n):

Accepted Answer

A)  investing activity is the amount of ($26,500). 
B)  financing activity in the amount of ($26,500). 
C)  investing activity is the amount of $26,500. 
D)  financing investing activity is the amount of $26,500. 
A)  investing activity is the amount of ($26,500). 
B)  financing activity in the amount of ($26,500). 
C)  investing activity is the amount of $26,500. 
D)  financing investing activity is the amount of $26,500.

Question 3

The main goal of an accounting system is to:

Accepted Answer

A)  capture information about a business so that it can be reported to decision makers. 
B)  earn a profit for the company's stockholders. 
C)  prove that assets equal liabilities plus stockholders' equity. 
D)  provide initial financing for a new start-up. 
A)  capture information about a business so that it can be reported to decision makers. 
B)  earn a profit for the company's stockholders. 
C)  prove that assets equal liabilities plus stockholders' equity. 
D)  provide initial financing for a new start-up.

Question 4

Expenses are reported on the:

Accepted Answer

A)  income statement in the time period in which they are paid. 
B)  income statement in the time period in which they are incurred. 
C)  balance sheet in the time period in which they are paid. 
D)  balance sheet in the time period in which they are incurred. 
A)  income statement in the time period in which they are paid. 
B)  income statement in the time period in which they are incurred. 
C)  balance sheet in the time period in which they are paid. 
D)  balance sheet in the time period in which they are incurred.

Question 5

A company began the year with assets of $100,000,liabilities of $20,000,and stockholders' equity of $80,000.During the year assets increased $55,000 and stockholders' equity increased $20,000.What was the change in liabilities for the year?

Accepted Answer

A)  Increase of $75,000 
B)  Increase of $35,000 
C)  Decrease of $75,000 
D)  Decrease of $35,000 
A)  Increase of $75,000 
B)  Increase of $35,000 
C)  Decrease of $75,000 
D)  Decrease of $35,000

Question 6

Net income appears on which of the following financial statements?

Accepted Answer

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

Question 7

Which of the following would not affect a company's net income?

Accepted Answer

A)  A change in the company's income taxes 
B)  Changing the selling price of a company's product 
C)  Paying a dividend to stockholders 
D)  Advertising a new product 
A)  A change in the company's income taxes 
B)  Changing the selling price of a company's product 
C)  Paying a dividend to stockholders 
D)  Advertising a new product

Question 8

Which of the following requires that its members adhere to a Code of Professional Conduct?

Accepted Answer

A)  SEC 
B)  FASB 
C)  PCAOB 
D)  AICPA 
A)  SEC 
B)  FASB 
C)  PCAOB 
D)  AICPA

Question 9

Use the following Year 3 data to prepare the annual income statement for Kvass,Inc.

Accepted Answer

The answer of Use the following Year 3 data to...

Question 10

Use the following information to answer questions 130 - 132:
A company's financial records at the end of the year including the following amounts:
  
-Use the information above to answer the following question.What is the amount of total assets to be reported on the balance sheet at the end of the year?

Accepted Answer

A)  $112,000. 
B)  $102,000. 
C)  $119,000. 
D)  $155,000. 
A)  $112,000. 
B)  $102,000. 
C)  $119,000. 
D)  $155,000.

Question 11

Profit is equal to:

Accepted Answer

A)  revenues minus expenses. 
B)  assets minus liabilities. 
C)  the amount of cash that a company has. 
D)  the amount of cash that owners have contributed to the business. 
A)  revenues minus expenses. 
B)  assets minus liabilities. 
C)  the amount of cash that a company has. 
D)  the amount of cash that owners have contributed to the business.

Question 12

What do independent auditors provide for companies who hire them?

Accepted Answer

A)  Assurance that this year's financial statements are perfect 
B)  A guarantee that next year's operations will be profitable 
C)  Assurance that the financial statements follow Generally Accepted Accounting Principles 
D)  Assurance that the company's stock is a good investment 
A)  Assurance that this year's financial statements are perfect 
B)  A guarantee that next year's operations will be profitable 
C)  Assurance that the financial statements follow Generally Accepted Accounting Principles 
D)  Assurance that the company's stock is a good investment

Question 13

Which of the following statements about financial statement information is correct?

Accepted Answer

A)  If a company has total revenues of $80,000, total expenses of $50,000 and dividends of $10,000, they will have net income of $20,000. 
B)  A company with total stockholders' equity of $45,000 and total assets of $75,000 must have total liabilities of $120,000. 
C)  A company with liabilities of $80,000 and stockholders' equity of $50,000 will have Assets of $30,000. 
D)  A company with total stockholders' equity of $120,000 and common stock of $75,000 must have total retained earnings of $45,000. 
A)  If a company has total revenues of $80,000, total expenses of $50,000 and dividends of $10,000, they will have net income of $20,000. 
B)  A company with total stockholders' equity of $45,000 and total assets of $75,000 must have total liabilities of $120,000. 
C)  A company with liabilities of $80,000 and stockholders' equity of $50,000 will have Assets of $30,000. 
D)  A company with total stockholders' equity of $120,000 and common stock of $75,000 must have total retained earnings of $45,000.

Question 14

To determine whether generally accepted accounting principles (GAAP)were followed in the preparation of financial statements,an examination of:

Accepted Answer

A)  tax documents would be performed by the IRS. 
B)  the company's accounting records would be performed by the SEC. 
C)  the financial statements and related documents would be performed by an independent auditor. 
D)  the financial statements and related documents would be performed by the FASB. 
A)  tax documents would be performed by the IRS. 
B)  the company's accounting records would be performed by the SEC. 
C)  the financial statements and related documents would be performed by an independent auditor. 
D)  the financial statements and related documents would be performed by the FASB.

Question 15

Stockholders are creditors of a corporation.

Accepted Answer

A) True 
 B)False

Question 16

Relevance is an objective of external financial reporting that means:

Accepted Answer

A)  the financial reports of a business are assumed to include the results of only that business's activities. 
B)  financial information can be compared across businesses because similar accounting methods have been applied. 
C)  the financial information possesses a feature that allows it to influence a decision. 
D)  the financial information depicts the economic substance of business activities. 
A)  the financial reports of a business are assumed to include the results of only that business's activities. 
B)  financial information can be compared across businesses because similar accounting methods have been applied. 
C)  the financial information possesses a feature that allows it to influence a decision. 
D)  the financial information depicts the economic substance of business activities.

Question 17

Which of the following statements about the use of financial statements is not correct?

Accepted Answer

A)  When choosing between a company that pays steady dividends and one that retains its earnings to support future growth, investors will always choose the company that pays steady dividends. 
B)  Companies can develop reputations for honest financial reporting even when conveying bad news. 
C)  Trends in a company's net income from year to year can provide clues about its future earnings, which can help investors to decide whether to buy stock in the company. 
D)  Information in the notes to the financial statements can influence a user's interpretation of balance sheet and income statement information. 
A)  When choosing between a company that pays steady dividends and one that retains its earnings to support future growth, investors will always choose the company that pays steady dividends. 
B)  Companies can develop reputations for honest financial reporting even when conveying bad news. 
C)  Trends in a company's net income from year to year can provide clues about its future earnings, which can help investors to decide whether to buy stock in the company. 
D)  Information in the notes to the financial statements can influence a user's interpretation of balance sheet and income statement information.

Question 18

-Use the information above to answer the following question.What amount is represented by letter J in the statement of cash flows?

Accepted Answer

A)  ($42,000) 
B)  $42,000 
C)  ($22,000) 
D)  $22,000 
A)  ($42,000) 
B)  $42,000 
C)  ($22,000) 
D)  $22,000

Question 19

Which of the following would not be reported as a liability on the balance sheet?

Accepted Answer

A)  Accounts Payable 
B)  Common Stock 
C)  Notes Payable 
D)  Salaries and Wages Payable 
A)  Accounts Payable 
B)  Common Stock 
C)  Notes Payable 
D)  Salaries and Wages Payable

Question 20

A company started the year with the following: Assets $100,000; Liabilities $30,000; Common Stock $60,000; Retained Earnings $10,000.During the year, the company earned revenue of $5,000, all of which was received in cash, and incurred expenses of $3,000, all of which were unpaid as of the end of the year.In addition, the company paid dividends of $1,000 to owners.Assume no other activities occurred during the year.
-Use the information above to answer the following question.The amount of retained earnings at the end of the year is

Accepted Answer

A)  $15,000. 
B)  $11,000. 
C)  $12,000. 
D)  $1,000. 
A)  $15,000. 
B)  $11,000. 
C)  $12,000. 
D)  $1,000.

An economic resource that is owned by a company and will provide future benefits is referred to as:

The WC Company borrowed $26,500 from a bank during the year.This borrowing would be reported on the statement of cash flows as a(n):

The main goal of an accounting system is to:

Expenses are reported on the:

A company began the year with assets of $100,000,liabilities of $20,000,and stockholders' equity of $80,000.During the year assets increased $55,000 and stockholders' equity increased $20,000.What was the change in liabilities for the year?

Net income appears on which of the following financial statements?

Which of the following would not affect a company's net income?

Which of the following requires that its members adhere to a Code of Professional Conduct?

Use the following Year 3 data to prepare the annual income statement for Kvass,Inc.

Profit is equal to:

What do independent auditors provide for companies who hire them?

Which of the following statements about financial statement information is correct?

To determine whether generally accepted accounting principles (GAAP)were followed in the preparation of financial statements,an examination of:

Stockholders are creditors of a corporation.

Relevance is an objective of external financial reporting that means:

Which of the following statements about the use of financial statements is not correct?

-Use the information above to answer the following question.What amount is represented by letter J in the statement of cash flows?

Which of the following would not be reported as a liability on the balance sheet?

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

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Exam 1: Business Decisions and Financial Accounting

An economic resource that is owned by a company and will provide future benefits is referred to as:

The WC Company borrowed $26,500 from a bank during the year.This borrowing would be reported on the statement of cash flows as a(n):

The main goal of an accounting system is to:

Expenses are reported on the:

A company began the year with assets of $100,000,liabilities of $20,000,and stockholders' equity of $80,000.During the year assets increased $55,000 and stockholders' equity increased $20,000.What was the change in liabilities for the year?

Net income appears on which of the following financial statements?

Which of the following would not affect a company's net income?

Which of the following requires that its members adhere to a Code of Professional Conduct?

Use the following Year 3 data to prepare the annual income statement for Kvass,Inc.

Profit is equal to:

What do independent auditors provide for companies who hire them?

Which of the following statements about financial statement information is correct?

To determine whether generally accepted accounting principles (GAAP)were followed in the preparation of financial statements,an examination of:

Stockholders are creditors of a corporation.

Relevance is an objective of external financial reporting that means:

Which of the following statements about the use of financial statements is not correct?

-Use the information above to answer the following question.What amount is represented by letter J in the statement of cash flows?

Which of the following would not be reported as a liability on the balance sheet?

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters