Question 1

The cash paid to purchase equipment is included in the ________ section of the statement of cash flows.

Accepted Answer

A) operating 
B) financing 
C) investing 
D) noncash 
A) operating 
B) financing 
C) investing 
D) noncash

Question 2

Nonoperating items on a multiple-step income statement ________.

Accepted Answer

A) appear on the income statement immediately after gross profit 
B) appear only on income statements reporting a net profit 
C) reflect the effects of financial management decisions 
D) always arise from adjusting entries 
A) appear on the income statement immediately after gross profit 
B) appear only on income statements reporting a net profit 
C) reflect the effects of financial management decisions 
D) always arise from adjusting entries

Question 3

Dividends paid are reported on the Retained Earnings Statement.

Accepted Answer

A) True 
 B)False

Question 4

Inventory is considered to be a cash equivalent.

Accepted Answer

A) True 
 B)False

Question 5

Accelerated depreciation methods are the most popular depreciation methods for financial statement purposes.

Accepted Answer

A) True 
 B)False

Question 6

Salem Company had the following data for the year ending December 31,2010:   What is the net income for the year ending December 31,2010?

Accepted Answer

A) $22,400 
B) $23,800 
C) $24,400 
D) $26,800 
A) $22,400 
B) $23,800 
C) $24,400 
D) $26,800

Question 7

Accrued interest payable is a long-term liability because it relates to a long-term bond payable.

Accepted Answer

A) True 
 B)False

Question 8

A disadvantage of the LIFO method is ________.

Accepted Answer

A) it permits management to influence net income by the timing of the purchase of inventory items 
B) it leads to higher net income than FIFO under inflation 
C) it leads to higher gross profit than FIFO under inflation 
D) none of the above 
A) it permits management to influence net income by the timing of the purchase of inventory items 
B) it leads to higher net income than FIFO under inflation 
C) it leads to higher gross profit than FIFO under inflation 
D) none of the above

Question 9

Which of the following is NOT a current asset?

Accepted Answer

A) Accounts Receivable 
B) Prepaid Rent 
C) Short-term Investments 
D) Patent 
A) Accounts Receivable 
B) Prepaid Rent 
C) Short-term Investments 
D) Patent

Question 10

The balances on December 31,2015 are available for Johnny Company:
   Required:
Prepare a classified balance sheet at December 31,2015.

Accepted Answer

@#IMG-DLM& Current Assets: @#IMG-DLM& Long-term As

Question 11

During a period of inflation,the LIFO method reports a larger cost of goods sold amount than FIFO.

Accepted Answer

A) True 
 B)False

Question 12

A company's treasury stock is outstanding but not issued.

Accepted Answer

A) True 
 B)False

Question 13

When using the direct method of preparing the statement of cash flows,depreciation expense is added to net income.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements about depreciation is FALSE?

Accepted Answer

A) Depreciation does not generate cash. 
B) Depreciation is an allocation of the original cost of an asset to the periods in which the asset is used. 
C) Depreciation does not entail an outflow of cash. 
D) Depreciation is a means of setting aside cash for the replacement of an asset. 
A) Depreciation does not generate cash. 
B) Depreciation is an allocation of the original cost of an asset to the periods in which the asset is used. 
C) Depreciation does not entail an outflow of cash. 
D) Depreciation is a means of setting aside cash for the replacement of an asset.

Question 15

FIFO provides inventory valuations that approximate the actual ________ of inventory at the balance sheet date.

Accepted Answer

A) cost 
B) market value 
C) average cost 
D) sales value 
A) cost 
B) market value 
C) average cost 
D) sales value

Question 16

Which of the following statements about multiple-step income statements is FALSE?

Accepted Answer

A) A multiple-step income statement has a subtotal for gross profit and operating profit. 
B) A multiple-step income statement groups all the expenses together. 
C) A multiple-step income statement has different measures of profits. 
D) A multiple-step income statement has a list of nonoperating revenues and expenses. 
A) A multiple-step income statement has a subtotal for gross profit and operating profit. 
B) A multiple-step income statement groups all the expenses together. 
C) A multiple-step income statement has different measures of profits. 
D) A multiple-step income statement has a list of nonoperating revenues and expenses.

Question 17

Cash dividends declared are an addition to Retained Earnings on the Retained Earnings Statement.

Accepted Answer

A) True 
 B)False

Question 18

Goodwill remains on a company's books until ________.

Accepted Answer

A) accountants amortize it 
B) accountants depreciate it 
C) management sells it 
D) management determines its value is impaired 
A) accountants amortize it 
B) accountants depreciate it 
C) management sells it 
D) management determines its value is impaired

Question 19

The cash paid to settle a long-term note payable is included in the ________ section of the statement of cash flows.

Accepted Answer

A) operating 
B) financing 
C) investing 
D) noncash 
A) operating 
B) financing 
C) investing 
D) noncash

Question 20

Wild Bill Company recently issued 10,000 shares of $1.00 par value common stock for $35,500.This transaction will increase the ________.

Accepted Answer

A) Common stock account by $10,000 
B) Common stock account by $35,500 
C) Paid in capital in excess of par account by $35,500 
D) Retained earnings account by $35,500 
A) Common stock account by $10,000 
B) Common stock account by $35,500 
C) Paid in capital in excess of par account by $35,500 
D) Retained earnings account by $35,500

The cash paid to purchase equipment is included in the ________ section of the statement of cash flows.

Nonoperating items on a multiple-step income statement ________.

Dividends paid are reported on the Retained Earnings Statement.

Inventory is considered to be a cash equivalent.

Accelerated depreciation methods are the most popular depreciation methods for financial statement purposes.

Salem Company had the following data for the year ending December 31,2010: What is the net income for the year ending December 31,2010?

Accrued interest payable is a long-term liability because it relates to a long-term bond payable.

A disadvantage of the LIFO method is ________.

Which of the following is NOT a current asset?

The balances on December 31,2015 are available for Johnny Company: Required: Prepare a classified balance sheet at December 31,2015.

During a period of inflation,the LIFO method reports a larger cost of goods sold amount than FIFO.

A company's treasury stock is outstanding but not issued.

When using the direct method of preparing the statement of cash flows,depreciation expense is added to net income.

Which of the following statements about depreciation is FALSE?

FIFO provides inventory valuations that approximate the actual ________ of inventory at the balance sheet date.

Which of the following statements about multiple-step income statements is FALSE?

Cash dividends declared are an addition to Retained Earnings on the Retained Earnings Statement.

Goodwill remains on a company's books until ________.

The cash paid to settle a long-term note payable is included in the ________ section of the statement of cash flows.

Wild Bill Company recently issued 10,000 shares of $1.00 par value common stock for $35,500.This transaction will increase the ________.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 16: Understanding Corporate Annual Reports: Basic Financial Statements

The cash paid to purchase equipment is included in the ________ section of the statement of cash flows.

Nonoperating items on a multiple-step income statement ________.

Dividends paid are reported on the Retained Earnings Statement.

Inventory is considered to be a cash equivalent.

Accelerated depreciation methods are the most popular depreciation methods for financial statement purposes.

Salem Company had the following data for the year ending December 31,2010: What is the net income for the year ending December 31,2010?

Accrued interest payable is a long-term liability because it relates to a long-term bond payable.

A disadvantage of the LIFO method is ________.

Which of the following is NOT a current asset?

The balances on December 31,2015 are available for Johnny Company: Required: Prepare a classified balance sheet at December 31,2015.

During a period of inflation,the LIFO method reports a larger cost of goods sold amount than FIFO.

A company's treasury stock is outstanding but not issued.

When using the direct method of preparing the statement of cash flows,depreciation expense is added to net income.

Which of the following statements about depreciation is FALSE?

FIFO provides inventory valuations that approximate the actual ________ of inventory at the balance sheet date.

Which of the following statements about multiple-step income statements is FALSE?

Cash dividends declared are an addition to Retained Earnings on the Retained Earnings Statement.

Goodwill remains on a company's books until ________.

The cash paid to settle a long-term note payable is included in the ________ section of the statement of cash flows.

Wild Bill Company recently issued 10,000 shares of $1.00 par value common stock for $35,500.This transaction will increase the ________.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding and Analyzing Consolidated Financial Statements

Filters