Question 1

The statement of cash flows is prepared last and is the only financial statement which shows the cash inflows and outflows from transactions.

Accepted Answer

A) True 
 B)False

Question 2

Garret Company has provided the following selected information for the year ended December 31,2011:
 Cash collected from customers was $783,000.
 Cash received from stockholders in exchange for stock totaled $91,000.
 Cash paid to suppliers was $361,000.
 Cash paid to employees was $204,000.
 Cash to stockholders for dividends was $33,000.
 Cash received from sale of a building was $250,000.
 Cash paid for rent was $39,000.
 Cash received for interest and dividends was $7,000.
 Cash paid for income taxes was $55,000.
Based on the selected information provided,how much was Garret's cash flow from operations?

Accepted Answer

A) $131,000 
B) $98,000 
C) $381,000 
D) $222,000 
A) $131,000 
B) $98,000 
C) $381,000 
D) $222,000

Question 3

Which of the following best describes operating revenues?

Accepted Answer

A) They are increases in net assets as a result of peripheral transactions. 
B) They are decreases in net assets as a result of ongoing operations. 
C) They are increases in net assets as a result of ongoing operations. 
D) They are decreases in net assets as a result of peripheral transactions. 
A) They are increases in net assets as a result of peripheral transactions. 
B) They are decreases in net assets as a result of ongoing operations. 
C) They are increases in net assets as a result of ongoing operations. 
D) They are decreases in net assets as a result of peripheral transactions.

Question 4

Which of the following accounts doesn't have a debit balance?

Accepted Answer

A) Prepaid insurance 
B) Insurance expense 
C) Unearned revenues 
D) Salaries expense 
A) Prepaid insurance 
B) Insurance expense 
C) Unearned revenues 
D) Salaries expense

Question 5

Which of the following statements is false?

Accepted Answer

A) The income statement covers a period of time. 
B) A loss on the sale of plant and equipment is considered a peripheral activity and is not reported on the income statement. 
C) Rent expense is a component of operating income. 
D) Interest expense isn't a component of operating income. 
A) The income statement covers a period of time. 
B) A loss on the sale of plant and equipment is considered a peripheral activity and is not reported on the income statement. 
C) Rent expense is a component of operating income. 
D) Interest expense isn't a component of operating income.

Question 6

For the year ending December 31,2010,the accounts of Jackson Corporation showed the following balances:
 $$\begin{array} { l r } 
\text { Contributed capital, January } 1,2010 & \$ 500,000 \
\text { Retained earnings, beginning balance, January } 1,2010 & \$ 100,000 \
\text { Total revenues earned during 2010 } & \$ 150,000 \
\text { Total expenses incurred during } 2010 & \$ 90,000 \
\text { Total dividends declared during } 2010 & \$ 10,000 \
\text { Issuance of stock during 2010 } & \$ 50,000
\end{array}$$ Requirement:
 Determine the components of stockholders' equity as of December 31,2010.

Accepted Answer

To determine the components of stockhold

Question 7

During 2010,Sigma Company earned service revenues amounting to $700,000,of which $630,000 was collected in cash; the balance will be collected in January 2011.What amount should the 2010 income statement report for service revenues?

Accepted Answer

A) $630,000 
B) $700,000 
C) $70,000 
D) $570,000 
A) $630,000 
B) $700,000 
C) $70,000 
D) $570,000

Question 8

The following information has been provided by Hable Company:
Advertising expense $9,900;
Interest expense $3,700;
Rent expense $12,000;
Loss on sale of plant and equipment $5,700;
Cost of goods sold $21,300;
Depreciation expense $7,100.
How much were Hable's operating expenses?

Accepted Answer

A) $50,300 
B) $54,000 
C) $59,700 
D) $43,200 
A) $50,300 
B) $54,000 
C) $59,700 
D) $43,200

Question 9

Expenses are decreases in assets or increases in liabilities incurred in order to generate revenues.

Accepted Answer

A) True 
 B)False

Question 10

On January 1,2010,Denmark Inc.,started the year with a $200,000 credit balance in its retained earnings account.During 2010,the company earned net income of $70,000 and declared and paid dividends of $10,000.Also,the company received cash of $15,000 as an additional investment by its owners.What is the balance in retained earnings on December 31,2010?

Accepted Answer

A) $200,000 
B) $270,000 
C) $245,000 
D) $260,000 
A) $200,000 
B) $270,000 
C) $245,000 
D) $260,000

Question 11

A company purchased supplies for cash which will be consumed during future months.Which of the following correctly describes the impact of the supplies purchase on the financial statements?

Accepted Answer

A) Total assets will remain unchanged. 
B) Total assets will decrease. 
C) Operating expenses will increase. 
D) Operating income will decrease. 
A) Total assets will remain unchanged. 
B) Total assets will decrease. 
C) Operating expenses will increase. 
D) Operating income will decrease.

Question 12

What is the operating cycle? Describe a business entity with an operating cycle of less than six months and a business with an operating cycle of more than one year.

Accepted Answer

The answer of What is the operating cycle? Describe a...

Question 13

Which of the following is not criteria pertaining to the revenue principle?

Accepted Answer

A) The goods or services have been delivered. 
B) The selling price is fixed or determinable. 
C) Collection is reasonably assured. 
D) The cash payment has been received. 
A) The goods or services have been delivered. 
B) The selling price is fixed or determinable. 
C) Collection is reasonably assured. 
D) The cash payment has been received.

Question 14

Which of the following statements is false when Mama June Pizza Company paid $47,000 cash on accounts owed to suppliers?

Accepted Answer

A) The cash account was credited for $47,000. 
B) Accounts payable was debited for $47,000. 
C) Supplies expense was increased by $47,000. 
D) Operating income was not changed by the payment to the suppliers. 
A) The cash account was credited for $47,000. 
B) Accounts payable was debited for $47,000. 
C) Supplies expense was increased by $47,000. 
D) Operating income was not changed by the payment to the suppliers.

Question 15

Which of the following is not reported as an operating expense on the income statement?

Accepted Answer

A) Salaries expense 
B) Rent expense 
C) Interest expense 
D) Advertising expense 
A) Salaries expense 
B) Rent expense 
C) Interest expense 
D) Advertising expense

Question 16

Explain why the net income reported on the income statement is usually not equal to net cash flows from operating activities on the statement of cash flows.

Accepted Answer

The answer of Explain why the net income reported on...

Question 17

Which of the following statements is inaccurate with respect to the total asset turnover ratio?

Accepted Answer

A) It is calculated as sales revenues divided by total assets at year-end. 
B) It is decreased when additional plant and equipment is purchased. 
C) A high ratio implies efficient management of assets. 
D) It is decreased when additional inventory is purchased. 
A) It is calculated as sales revenues divided by total assets at year-end. 
B) It is decreased when additional plant and equipment is purchased. 
C) A high ratio implies efficient management of assets. 
D) It is decreased when additional inventory is purchased.

Question 18

Which of the following accounts normally have a credit balance?

Accepted Answer

A) Unearned revenues; Prepaid rent; Revenues. 
B) Revenues; Expenses; Contributed capital. 
C) Revenues; Inventory; Unearned revenue. 
D) Notes payable; Retained earnings; Revenues. 
A) Unearned revenues; Prepaid rent; Revenues. 
B) Revenues; Expenses; Contributed capital. 
C) Revenues; Inventory; Unearned revenue. 
D) Notes payable; Retained earnings; Revenues.

Question 19

Which of the following journal entries correctly records the receipt of a utility bill which will be paid for in later weeks?

Accepted Answer

A)  Utilities payable 
$ \quad $$ \quad $Utilities expense 
B)  Utilities expense
$ \quad $$ \quad $Utilities payable 
C)  Utilities expense
$ \quad $$ \quad $Retained earnings 
D)  Retained earnings
$ \quad $$ \quad $Utilities payable 
A)  Utilities payable 
$ \quad $$ \quad $Utilities expense 
B)  Utilities expense
$ \quad $$ \quad $Utilities payable 
C)  Utilities expense
$ \quad $$ \quad $Retained earnings 
D)  Retained earnings
$ \quad $$ \quad $Utilities payable

The statement of cash flows is prepared last and is the only financial statement which shows the cash inflows and outflows from transactions.

Which of the following best describes operating revenues?

Which of the following accounts doesn't have a debit balance?

Which of the following statements is false?

During 2010,Sigma Company earned service revenues amounting to $700,000,of which $630,000 was collected in cash; the balance will be collected in January 2011.What amount should the 2010 income statement report for service revenues?

The following information has been provided by Hable Company: Advertising expense $9,900; Interest expense $3,700; Rent expense $12,000; Loss on sale of plant and equipment $5,700; Cost of goods sold $21,300; Depreciation expense $7,100. How much were Hable's operating expenses?

Expenses are decreases in assets or increases in liabilities incurred in order to generate revenues.

A company purchased supplies for cash which will be consumed during future months.Which of the following correctly describes the impact of the supplies purchase on the financial statements?

What is the operating cycle? Describe a business entity with an operating cycle of less than six months and a business with an operating cycle of more than one year.

Which of the following is not criteria pertaining to the revenue principle?

Which of the following statements is false when Mama June Pizza Company paid $47,000 cash on accounts owed to suppliers?

Which of the following is not reported as an operating expense on the income statement?

Explain why the net income reported on the income statement is usually not equal to net cash flows from operating activities on the statement of cash flows.

Which of the following statements is inaccurate with respect to the total asset turnover ratio?

Which of the following accounts normally have a credit balance?

Which of the following journal entries correctly records the receipt of a utility bill which will be paid for in later weeks?

Financial Statements and Business Decisions

Investing and Financing Decisions and the Balance Sheet

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

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Exam 3: Operating Decisions and the Income Statement

The statement of cash flows is prepared last and is the only financial statement which shows the cash inflows and outflows from transactions.

Which of the following best describes operating revenues?

Which of the following accounts doesn't have a debit balance?

Which of the following statements is false?

During 2010,Sigma Company earned service revenues amounting to $700,000,of which $630,000 was collected in cash; the balance will be collected in January 2011.What amount should the 2010 income statement report for service revenues?

The following information has been provided by Hable Company: Advertising expense $9,900; Interest expense $3,700; Rent expense $12,000; Loss on sale of plant and equipment $5,700; Cost of goods sold $21,300; Depreciation expense $7,100. How much were Hable's operating expenses?

Expenses are decreases in assets or increases in liabilities incurred in order to generate revenues.

A company purchased supplies for cash which will be consumed during future months.Which of the following correctly describes the impact of the supplies purchase on the financial statements?

What is the operating cycle? Describe a business entity with an operating cycle of less than six months and a business with an operating cycle of more than one year.

Which of the following is not criteria pertaining to the revenue principle?

Which of the following statements is false when Mama June Pizza Company paid $47,000 cash on accounts owed to suppliers?

Which of the following is not reported as an operating expense on the income statement?

Explain why the net income reported on the income statement is usually not equal to net cash flows from operating activities on the statement of cash flows.

Which of the following statements is inaccurate with respect to the total asset turnover ratio?

Which of the following accounts normally have a credit balance?

Which of the following journal entries correctly records the receipt of a utility bill which will be paid for in later weeks?

Financial Statements and Business Decisions

Investing and Financing Decisions and the Balance Sheet

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

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