Question 1

Common stock and additional-paid in capital are both reported on the balance sheet as components of shareholders' equity.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following would not be included under the account category of expenses within the chart of accounts?

Accepted Answer

A) Cost of goods sold. 
B) Interest expense. 
C) Prepaid insurance expense. 
D) Income tax expense. 
A) Cost of goods sold. 
B) Interest expense. 
C) Prepaid insurance expense. 
D) Income tax expense. C

Question 3

Financial reporting focuses on reporting the impact of transactions on an entity's financial position.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following would result when a company borrows cash and signs a note payable that is due in two years?

Accepted Answer

A) A noncurrent liability and an investing cash flow are created. 
B) A noncurrent liability and a financing cash flow are created. 
C) A current liability and an investing cash flow are created. 
D) A current liability and a financing cash flow are createD.The note is noncurrent because it is due in two years.The cash flow is created from borrowing money, and categorized as a financing cash flow. 
A) A noncurrent liability and an investing cash flow are created. 
B) A noncurrent liability and a financing cash flow are created. 
C) A current liability and an investing cash flow are created. 
D) A current liability and a financing cash flow are createD.The note is noncurrent because it is due in two years.The cash flow is created from borrowing money, and categorized as a financing cash flow.

Question 5

Which of the following describes the primary objective of financial accounting?

Accepted Answer

A) To provide useful financial information only to stockholders. 
B) To provide information about a business' future business strategies. 
C) To provide useful financial information about a business to help external parties make informed decisions. 
D) To provide useful financial information about a business to help internal parties make informed decisions. 
A) To provide useful financial information only to stockholders. 
B) To provide information about a business' future business strategies. 
C) To provide useful financial information about a business to help external parties make informed decisions. 
D) To provide useful financial information about a business to help internal parties make informed decisions.

Question 6

The trial balance is similar to the balance sheet in that it is a listing of assets, liabilities, and stockholders' equity and is provided to external decision makers.

Accepted Answer

A) True 
 B)False

Question 7

Current liabilities are defined as obligations to be paid within six months.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is included within current assets on a classified balance sheet?

Accepted Answer

A) Land. 
B) A truck. 
C) Inventory. 
D) Intangible assets. 
A) Land. 
B) A truck. 
C) Inventory. 
D) Intangible assets.

Question 9

Which of the following journal entries is correct when a business entity uses cash to pay an account payable?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 10

Which of the following transactions would result in an increase in the current ratio?

Accepted Answer

A) Collection of cash from an account receivable. 
B) Selling shares of stock to stockholders in exchange for cash. 
C) Purchasing a building with cash. 
D) Declaration of a cash dividend by the board of directors. 
A) Collection of cash from an account receivable. 
B) Selling shares of stock to stockholders in exchange for cash. 
C) Purchasing a building with cash. 
D) Declaration of a cash dividend by the board of directors.

Question 11

Which of the following would result when a company pays a previously declared cash dividend?

Accepted Answer

A) Current liabilities are reduced and a financing cash flow is created. 
B) Stockholders' equity is reduced and a financing cash flow is created. 
C) Current assets are reduced and an investing cash flow is created. 
D) Stockholders' equity is reduced and an investing cash flow is createD.Declaring a dividend creates a dividend payable.Paying the dividend reduces this current liability account.Paying dividends are classified as financing cash flows. 
A) Current liabilities are reduced and a financing cash flow is created. 
B) Stockholders' equity is reduced and a financing cash flow is created. 
C) Current assets are reduced and an investing cash flow is created. 
D) Stockholders' equity is reduced and an investing cash flow is createD.Declaring a dividend creates a dividend payable.Paying the dividend reduces this current liability account.Paying dividends are classified as financing cash flows.

Question 12

The Pioneer Company has provided the following account balances: Cash $38,000;
Short-term investments $4,000;
Accounts receivable $48,000;
Supplies $6,000;
Long-term notes receivable $2,000;
Equipment $96,000;
Factory Building $180,000;
Intangible assets $6,000;
Accounts payable $30,000;
Accrued liabilities payable $4,000;
Short-term notes payable $14,000;
Long-term notes payable $92,000;
Common stock $180,000;
Retained earnings $60,000.
What is Pioneer's current ratio?

Accepted Answer

A) 2.00. 
B) 2.17. 
C) 2.71. 
D) 1.00. 
A) 2.00. 
B) 2.17. 
C) 2.71. 
D) 1.00.

Question 13

The recording of a journal entry precedes the posting to the general ledger.

Accepted Answer

A) True 
 B)False

Question 14

Many valuable intangible assets such as trademarks and copyrights are not reported on a company's balance sheet.

Accepted Answer

A) True 
 B)False

Question 15

A company's January 1, 2016 balance sheet reported total assets of $120,000 and total liabilities of $40,000. During January 2016, the following transactions occurred: (A) the company issued stock and collected cash totaling $30,000; (B) the company paid an account payable of $6,000; (C) the company purchased supplies for $1,000 with cash; (D) the company purchased land for $60,000 paying $10,000 with cash and signing a note payable for the balance. What is total stockholders' equity after the transactions above?

Accepted Answer

A) $30,000. 
B) $110,000. 
C) $80,000. 
D) $194,000. 
A) $30,000. 
B) $110,000. 
C) $80,000. 
D) $194,000.

Question 16

Why is the separate entity assumption so important for balance sheet reporting?

Accepted Answer

The separate entity assumption is import

Question 17

Which of the following would result when a company sells additional shares of common stock for cash?

Accepted Answer

A) A noncurrent liability and a financing cash flow are created. 
B) Common stock increases and a financing cash flow results. 
C) A noncurrent liability and an investing cash flow are created. 
D) Common stock increases and an investing cash flow results. 
A) A noncurrent liability and a financing cash flow are created. 
B) Common stock increases and a financing cash flow results. 
C) A noncurrent liability and an investing cash flow are created. 
D) Common stock increases and an investing cash flow results.

Question 18

The trial balance is a listing of account balances that are found in the general ledger.

Accepted Answer

A) True 
 B)False

Question 19

What is the primary objective of financial reporting?

Accepted Answer

The primary objective of financial repor

Question 20

Describe the general journal and the general ledger.

Accepted Answer

Transactions are first recorded in the g

Common stock and additional-paid in capital are both reported on the balance sheet as components of shareholders' equity.

Which of the following would not be included under the account category of expenses within the chart of accounts?

Financial reporting focuses on reporting the impact of transactions on an entity's financial position.

Which of the following would result when a company borrows cash and signs a note payable that is due in two years?

Which of the following describes the primary objective of financial accounting?

The trial balance is similar to the balance sheet in that it is a listing of assets, liabilities, and stockholders' equity and is provided to external decision makers.

Current liabilities are defined as obligations to be paid within six months.

Which of the following is included within current assets on a classified balance sheet?

Which of the following journal entries is correct when a business entity uses cash to pay an account payable?

Which of the following transactions would result in an increase in the current ratio?

Which of the following would result when a company pays a previously declared cash dividend?

The recording of a journal entry precedes the posting to the general ledger.

Many valuable intangible assets such as trademarks and copyrights are not reported on a company's balance sheet.

Why is the separate entity assumption so important for balance sheet reporting?

Which of the following would result when a company sells additional shares of common stock for cash?

The trial balance is a listing of account balances that are found in the general ledger.

What is the primary objective of financial reporting?

Describe the general journal and the general ledger.

Financial Statements and Business Decisions

Operating Decisions and the Accounting System

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; Intangibles; and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

PPA: Reporting and Interpreting Investments in Other Corporations

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Exam 2: Investing and Financing Decisions and the Accounting System

Common stock and additional-paid in capital are both reported on the balance sheet as components of shareholders' equity.

Which of the following would not be included under the account category of expenses within the chart of accounts?

Financial reporting focuses on reporting the impact of transactions on an entity's financial position.

Which of the following would result when a company borrows cash and signs a note payable that is due in two years?

Which of the following describes the primary objective of financial accounting?

The trial balance is similar to the balance sheet in that it is a listing of assets, liabilities, and stockholders' equity and is provided to external decision makers.

Current liabilities are defined as obligations to be paid within six months.

Which of the following is included within current assets on a classified balance sheet?

Which of the following journal entries is correct when a business entity uses cash to pay an account payable?

Which of the following transactions would result in an increase in the current ratio?

Which of the following would result when a company pays a previously declared cash dividend?

The recording of a journal entry precedes the posting to the general ledger.

Many valuable intangible assets such as trademarks and copyrights are not reported on a company's balance sheet.

Why is the separate entity assumption so important for balance sheet reporting?

Which of the following would result when a company sells additional shares of common stock for cash?

The trial balance is a listing of account balances that are found in the general ledger.

What is the primary objective of financial reporting?

Describe the general journal and the general ledger.

Financial Statements and Business Decisions

Operating Decisions and the Accounting System

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; Intangibles; and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

PPA: Reporting and Interpreting Investments in Other Corporations

Filters