Question 1

A balance sheet reports the company's financial position over a period of time.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following would be considered a financing activity that decreases cash on the statement of cash flows?

Accepted Answer

A) The company pays a long-term loan. 
B) The company sells common stock. 
C) The company purchases a building. 
D) The company pays its monthly utility bill. 
A) The company pays a long-term loan. 
B) The company sells common stock. 
C) The company purchases a building. 
D) The company pays its monthly utility bill.

Question 3

A net loss occurs when:

Accepted Answer

A) not enough cash exists. 
B) total revenues exceed total expenses. 
C) total expenses and losses exceed total revenues and gains. 
D) total revenues and dividends exceed total expenses and losses. 
A) not enough cash exists. 
B) total revenues exceed total expenses. 
C) total expenses and losses exceed total revenues and gains. 
D) total revenues and dividends exceed total expenses and losses.

Question 4

The stable-monetary-unit assumption:

Accepted Answer

A) ensures that accounting records and statements are based on the most reliable data available. 
B) requires all countries to record transactions in U.S.dollars. 
C) maintains that each organization or section of an organization stands apart from other organizations and individuals. 
D) enables accountants to ignore the effect of inflation on the accounting records. 
A) ensures that accounting records and statements are based on the most reliable data available. 
B) requires all countries to record transactions in U.S.dollars. 
C) maintains that each organization or section of an organization stands apart from other organizations and individuals. 
D) enables accountants to ignore the effect of inflation on the accounting records.

Question 5

The fair value of a plant asset is equal to:

Accepted Answer

A) the amount the business could sell the asset for. 
B) the amount of cash paid plus the dollar value of noncash consideration given in exchange for the plant asset at acquisition. 
C) the amount of cash paid plus the loan taken out to finance the purchase of the plant asset. 
D) the amount a company can receive for the asset when sold in order to go out of business. 
A) the amount the business could sell the asset for. 
B) the amount of cash paid plus the dollar value of noncash consideration given in exchange for the plant asset at acquisition. 
C) the amount of cash paid plus the loan taken out to finance the purchase of the plant asset. 
D) the amount a company can receive for the asset when sold in order to go out of business.

Question 6

Provide an explanation of each of the following:
Entity Assumption
Historical Cost Principle
Continuity Assumption
Stable-Monetary-Unit Assumption

Accepted Answer

Entity Assumption - The entity is any or

Question 7

The balance sheet is also known as the:

Accepted Answer

A) statement of profit and loss. 
B) operating statement. 
C) assets statement. 
D) statement of financial position. 
A) statement of profit and loss. 
B) operating statement. 
C) assets statement. 
D) statement of financial position.

Question 8

The accounting equation can be stated as:

Accepted Answer

A) Assets = Liabilities + Paid-in Capital - Common Stock. 
B) Assets + Liabilities = Stockholders' Equity. 
C) Assets = Liabilities + Paid-in Capital + Retained Earnings. 
D) Assets = Liabilities - Paid-in Capital - Dividends. 
A) Assets = Liabilities + Paid-in Capital - Common Stock. 
B) Assets + Liabilities = Stockholders' Equity. 
C) Assets = Liabilities + Paid-in Capital + Retained Earnings. 
D) Assets = Liabilities - Paid-in Capital - Dividends.

Question 9

Net income is computed as:

Accepted Answer

A) revenues - expenses - dividends. 
B) revenues + expenses. 
C) revenues - expenses. 
D) revenues - expenses + dividends. 
A) revenues - expenses - dividends. 
B) revenues + expenses. 
C) revenues - expenses. 
D) revenues - expenses + dividends.

Question 10

Notes payable (due in 60 days)would appear on the balance sheet as a:

Accepted Answer

A) current liability. 
B) current asset. 
C) long-term asset. 
D) long-term liability. 
A) current liability. 
B) current asset. 
C) long-term asset. 
D) long-term liability.

Question 11

Federal income taxes are paid by ________ in a limited liability company.

Accepted Answer

A) the company 
B) limited partners only 
C) general partners only 
D) members 
A) the company 
B) limited partners only 
C) general partners only 
D) members

Question 12

Generally accepted accounting principles (GAAP)are the accounting guidelines formulated by the Securities and Exchange Commission.

Accepted Answer

A) True 
 B)False

Question 13

All of the following line items are found on the statement of cash flows EXCEPT for:

Accepted Answer

A) net cash used in investing activities. 
B) net cash provided in operating activities. 
C) net cash used in financing activities. 
D) total stockholders' equity. 
A) net cash used in investing activities. 
B) net cash provided in operating activities. 
C) net cash used in financing activities. 
D) total stockholders' equity.

Question 14

A company sells travel mugs online for $10.They purchase the mugs for $6 and charge the customers $2 for shipping and handling.The cost of product sold per mug is:

Accepted Answer

A) $4. 
B) $2. 
C) $6. 
D) $8. 
A) $4. 
B) $2. 
C) $6. 
D) $8.

Question 15

The accounting equation shows the relationship among assets,liabilities and net income.

Accepted Answer

A) True 
 B)False

Question 16

The decision framework for making ethical judgments provides general guidance for everyone,regardless of profession or industry.

Accepted Answer

A) True 
 B)False

Question 17

The CEO of Clarkson Company owns a vacation home in Hawaii.Clarkson Company owns a factory in Detroit where it is headquartered.Which of these properties is considered to be asset(s)of the business?

Accepted Answer

A) only the vacation home in Hawaii 
B) only the factory in Detroit 
C) both the vacation home in Hawaii and the factory in Detroit 
D) neither the vacation home in Hawaii nor the factory in Detroit 
A) only the vacation home in Hawaii 
B) only the factory in Detroit 
C) both the vacation home in Hawaii and the factory in Detroit 
D) neither the vacation home in Hawaii nor the factory in Detroit

Question 18

Beck Company had the following accounts and balances at the end of the year.What is net income or net loss for the year?

Accepted Answer

A) net income of $94,000 
B) net income of $79,000 
C) net loss of $10,000 
D) net income of $5,000 
A) net income of $94,000 
B) net income of $79,000 
C) net loss of $10,000 
D) net income of $5,000

Question 19

The amount of cash received on the sale of the company's stock in excess of par value is called retained earnings.

Accepted Answer

A) True 
 B)False

Question 20

Verifiability means that the accounting information:

Accepted Answer

A) is timely and understandable. 
B) is understandable. 
C) must be capable of being checked for accuracy,completeness and reliability. 
D) is material and relevant. 
A) is timely and understandable. 
B) is understandable. 
C) must be capable of being checked for accuracy,completeness and reliability. 
D) is material and relevant.

A balance sheet reports the company's financial position over a period of time.

Which of the following would be considered a financing activity that decreases cash on the statement of cash flows?

A net loss occurs when:

The stable-monetary-unit assumption:

The fair value of a plant asset is equal to:

Provide an explanation of each of the following: Entity Assumption Historical Cost Principle Continuity Assumption Stable-Monetary-Unit Assumption

The balance sheet is also known as the:

The accounting equation can be stated as:

Net income is computed as:

Notes payable (due in 60 days)would appear on the balance sheet as a:

Federal income taxes are paid by ________ in a limited liability company.

Generally accepted accounting principles (GAAP)are the accounting guidelines formulated by the Securities and Exchange Commission.

All of the following line items are found on the statement of cash flows EXCEPT for:

A company sells travel mugs online for $10.They purchase the mugs for $6 and charge the customers $2 for shipping and handling.The cost of product sold per mug is:

The accounting equation shows the relationship among assets,liabilities and net income.

The decision framework for making ethical judgments provides general guidance for everyone,regardless of profession or industry.

The CEO of Clarkson Company owns a vacation home in Hawaii.Clarkson Company owns a factory in Detroit where it is headquartered.Which of these properties is considered to be asset(s)of the business?

Beck Company had the following accounts and balances at the end of the year.What is net income or net loss for the year?

The amount of cash received on the sale of the company's stock in excess of par value is called retained earnings.

Verifiability means that the accounting information:

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 1: The Financial Statements

A balance sheet reports the company's financial position over a period of time.

Which of the following would be considered a financing activity that decreases cash on the statement of cash flows?

A net loss occurs when:

The stable-monetary-unit assumption:

The fair value of a plant asset is equal to:

Provide an explanation of each of the following: Entity Assumption Historical Cost Principle Continuity Assumption Stable-Monetary-Unit Assumption

The balance sheet is also known as the:

The accounting equation can be stated as:

Net income is computed as:

Notes payable (due in 60 days)would appear on the balance sheet as a:

Federal income taxes are paid by ________ in a limited liability company.

Generally accepted accounting principles (GAAP)are the accounting guidelines formulated by the Securities and Exchange Commission.

All of the following line items are found on the statement of cash flows EXCEPT for:

A company sells travel mugs online for $10.They purchase the mugs for $6 and charge the customers $2 for shipping and handling.The cost of product sold per mug is:

The accounting equation shows the relationship among assets,liabilities and net income.

The decision framework for making ethical judgments provides general guidance for everyone,regardless of profession or industry.

The CEO of Clarkson Company owns a vacation home in Hawaii.Clarkson Company owns a factory in Detroit where it is headquartered.Which of these properties is considered to be asset(s)of the business?

Beck Company had the following accounts and balances at the end of the year.What is net income or net loss for the year?

The amount of cash received on the sale of the company's stock in excess of par value is called retained earnings.

Verifiability means that the accounting information:

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters