Question 1

Which of the following activities would be classified as a financing activity?

Accepted Answer

A)  Selling goods 
B)  Payment of wages 
C)  Repayment of a loan 
D)  Purchase of equipment 
A)  Selling goods 
B)  Payment of wages 
C)  Repayment of a loan 
D)  Purchase of equipment

Question 2

Which of the following accounts is considered to be the most liquid?

Accepted Answer

A)  Cash 
B)  Land 
C)  Accounts Receivable 
D)  Inventory 
A)  Cash 
B)  Land 
C)  Accounts Receivable 
D)  Inventory

Question 3

In 2012, Rodney Corporation's balance sheet had the following balances: cash, $306,500; accounts receivable, $471,400; and accounts payable, $390,800. During 2013, Rodney had a net increase in cash of $68,600 and net income of $47,800. Given this information, what is the cash balance that will be reported on Rodney's 2013 balance sheet?

Accepted Answer

A)  $375,100 
B)  $237,900 
C)  $354,300 
D)  $258,700 
A)  $375,100 
B)  $237,900 
C)  $354,300 
D)  $258,700

Question 4

While the three financial statements contain a lot of information, they don't tell the readers everything they may need to know about a company. Additional information can be found in the notes to the financial statements. Identify the four types of notes (be specific).

Accepted Answer

The answer of While the three financial statements contain a...

Question 5

The accounting idea that only items quantifiable in terms of U.S. currency are recorded is the

Accepted Answer

A)  Monetary measurement concept 
B)  Arm's-length transaction assumption 
C)  Going concern concept 
D)  Double-entry assumption 
A)  Monetary measurement concept 
B)  Arm's-length transaction assumption 
C)  Going concern concept 
D)  Double-entry assumption

Question 6

Economic resources that are owned or controlled by an enterprise are called

Accepted Answer

A)  Assets 
B)  Liabilities 
C)  Revenues 
D)  Gains 
A)  Assets 
B)  Liabilities 
C)  Revenues 
D)  Gains

Question 7

On December 31, 2012, Pipe Company had the following account balances:
  
Given the above information, compute the following items:

Accepted Answer

Given the above info

Question 8

The beginning balance of retained earnings will be greater than the ending balance if

Accepted Answer

A)  The company has a net income greater than dividends paid 
B)  The company issues additional shares of stock during the period 
C)  The company has a net income less than dividends paid 
D)  The revenues earned for the period are greater than the expenses incurred and dividends paid 
A)  The company has a net income greater than dividends paid 
B)  The company issues additional shares of stock during the period 
C)  The company has a net income less than dividends paid 
D)  The revenues earned for the period are greater than the expenses incurred and dividends paid

Question 9

Exhibit 2-1 The following data were taken from the records of Moss Corporation for the year ending December 31, 2012:
 
- Refer to Exhibit 2-1. Given the above information, owners' equity on January 1, 2012 was

Accepted Answer

A)  $19,830 
B)  $2,670 
C)  $885 
D)  $7,695 
A)  $19,830 
B)  $2,670 
C)  $885 
D)  $7,695

Question 10

In completing an audit of a company's financial statements, auditors

Accepted Answer

A)  Guarantee that the financial statements are accurate 
B)  Examine every transaction underlying the financial statements 
C)  Assume responsibility for the accuracy of the financial statements 
D)  Provide some assurance that the financial statements are not misleading 
A)  Guarantee that the financial statements are accurate 
B)  Examine every transaction underlying the financial statements 
C)  Assume responsibility for the accuracy of the financial statements 
D)  Provide some assurance that the financial statements are not misleading

Question 11

Exhibit 2-3 During the month, Meridian Company had the following cash transactions:
  
-Refer to Exhibit 2-3. Given the above information, compute cash flow from investing activities.

Accepted Answer

A)  $4,250 
B)  ($4,250) 
C)  ($8,600) 
D)  $8,600 
A)  $4,250 
B)  ($4,250) 
C)  ($8,600) 
D)  $8,600

Question 12

The idea that an increase or decrease on one side of the accounting equation must be offset exactly by an increase or decrease on the other side of the accounting equation is called

Accepted Answer

A)  Additive concept 
B)  Going concern assumption 
C)  Monetary measurement concept 
D)  Double-entry accounting 
A)  Additive concept 
B)  Going concern assumption 
C)  Monetary measurement concept 
D)  Double-entry accounting

Question 13

The idea that transactions are recorded at their exchange prices at the transaction date is referred to as the

Accepted Answer

A)  Arm's-length transaction assumption 
B)  Monetary measurement principle 
C)  Cost principle 
D)  Going concern assumption 
A)  Arm's-length transaction assumption 
B)  Monetary measurement principle 
C)  Cost principle 
D)  Going concern assumption

Question 14

Which of the following is an example of a significant accounting policy that would be explained in the notes to the financial statements?

Accepted Answer

A)  The description of all the individual items that comprise notes payable 
B)  The disclosure of quarterly financial information 
C)  The method used to estimate depreciation on a piece of equipment 
D)  The disclosure of the uncertain, potential outcome of a lawsuit 
A)  The description of all the individual items that comprise notes payable 
B)  The disclosure of quarterly financial information 
C)  The method used to estimate depreciation on a piece of equipment 
D)  The disclosure of the uncertain, potential outcome of a lawsuit

Question 15

Eddy Corporation reported the following data for the period: Earnings per share, $3.00; Retained Earnings, $27,000; Revenues, $75,000; Capital Stock, $15,000; Expenses, $64,500. With this information, determine how many shares of stock are outstanding.

Accepted Answer

A)  9,000 
B)  5,000 
C)  4,000 
D)  3,500 
A)  9,000 
B)  5,000 
C)  4,000 
D)  3,500

Question 16

Expenses generally cause

Accepted Answer

A)  An increase in net assets 
B)  A decrease in net assets 
C)  No change in net assets 
D)  An increase in liabilities 
A)  An increase in net assets 
B)  A decrease in net assets 
C)  No change in net assets 
D)  An increase in liabilities

Question 17

Which of the following is generally considered to be a liability?

Accepted Answer

A)  Accounts receivable 
B)  Capital stock 
C)  Notes payable 
D)  Retained earnings 
A)  Accounts receivable 
B)  Capital stock 
C)  Notes payable 
D)  Retained earnings

Question 18

Distributions by a corporation to its stockholders are called

Accepted Answer

A)  Dividends 
B)  Retained earnings 
C)  Income 
D)  Withdrawals 
A)  Dividends 
B)  Retained earnings 
C)  Income 
D)  Withdrawals

Question 19

On January 1, 2013, Sorenson Company had a retained earnings balance of $780,000. During 2013, Sorenson Company earned a net income of $145,000. Cash dividends of $50,000 were paid during the year. Using this information, prepare a Statement of Retained Earnings, in good form, for the year 2013.

Accepted Answer

The answer of On January 1, 2013, Sorenson Company had...

Question 20

Earnings per share is equal to

Accepted Answer

A)  Net income divided by total number of shares of stock outstanding 
B)  Total revenues divided by total number of shares of stock outstanding 
C)  Total revenues divided by the number of shares of stock sold during the year 
D)  Net income divided by the number of shares of stock sold during the year 
A)  Net income divided by total number of shares of stock outstanding 
B)  Total revenues divided by total number of shares of stock outstanding 
C)  Total revenues divided by the number of shares of stock sold during the year 
D)  Net income divided by the number of shares of stock sold during the year

Exam 2: Financial Statements: An Overview

Which of the following activities would be classified as a financing activity?

Which of the following accounts is considered to be the most liquid?

While the three financial statements contain a lot of information, they don't tell the readers everything they may need to know about a company. Additional information can be found in the notes to the financial statements. Identify the four types of notes (be specific).

The accounting idea that only items quantifiable in terms of U.S. currency are recorded is the

Economic resources that are owned or controlled by an enterprise are called

On December 31, 2012, Pipe Company had the following account balances: Given the above information, compute the following items:

The beginning balance of retained earnings will be greater than the ending balance if

Exhibit 2-1 The following data were taken from the records of Moss Corporation for the year ending December 31, 2012: - Refer to Exhibit 2-1. Given the above information, owners' equity on January 1, 2012 was

In completing an audit of a company's financial statements, auditors

Exhibit 2-3 During the month, Meridian Company had the following cash transactions: -Refer to Exhibit 2-3. Given the above information, compute cash flow from investing activities.

The idea that an increase or decrease on one side of the accounting equation must be offset exactly by an increase or decrease on the other side of the accounting equation is called

The idea that transactions are recorded at their exchange prices at the transaction date is referred to as the

Which of the following is an example of a significant accounting policy that would be explained in the notes to the financial statements?

Eddy Corporation reported the following data for the period: Earnings per share, $3.00; Retained Earnings, $27,000; Revenues, $75,000; Capital Stock, $15,000; Expenses, $64,500. With this information, determine how many shares of stock are outstanding.

Expenses generally cause

Which of the following is generally considered to be a liability?

Distributions by a corporation to its stockholders are called

On January 1, 2013, Sorenson Company had a retained earnings balance of $780,000. During 2013, Sorenson Company earned a net income of $145,000. Cash dividends of $50,000 were paid during the year. Using this information, prepare a Statement of Retained Earnings, in good form, for the year 2013.

Earnings per share is equal to

Accounting Information: Users and Uses

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

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