Question 1

Which of the following is a disadvantage of a corporation when compared to a partnership?

Accepted Answer

A) The stockholders have limited liability. 
B) The corporation is treated as a separate legal entity from the stockholders. 
C) The corporation and its stockholders are subject to double taxation. 
D) The corporation must account for the transactions of the business as separate and apart from those of the owners. 
A) The stockholders have limited liability. 
B) The corporation is treated as a separate legal entity from the stockholders. 
C) The corporation and its stockholders are subject to double taxation. 
D) The corporation must account for the transactions of the business as separate and apart from those of the owners.

Question 2

A company's retained earnings increased $375,000 last year and its assets increased $973,000. The company declared a $79,000 cash dividend during the year. What was last year's net income?

Accepted Answer

A) $296,000. 
B) $375,000. 
C) $454,000. 
D) $519,000. 
A) $296,000. 
B) $375,000. 
C) $454,000. 
D) $519,000.

Question 3

How are creditor and investor claims reported on a balance sheet?

Accepted Answer

A) The claims of creditors are liabilities and those of investors are assets. 
B) The claims of both creditors and investors are liabilities, but only the claims of investors are considered to be long-term. 
C) The claims of creditors are reported as liabilities while the claims of investors are recorded as stockholders' equity. 
D) The claims of creditors and investors are considered to be essentially equivalent. 
A) The claims of creditors are liabilities and those of investors are assets. 
B) The claims of both creditors and investors are liabilities, but only the claims of investors are considered to be long-term. 
C) The claims of creditors are reported as liabilities while the claims of investors are recorded as stockholders' equity. 
D) The claims of creditors and investors are considered to be essentially equivalent.

Question 4

Which of the following transactions increases both cash and net income?

Accepted Answer

A) Cash receipts from a bank loan. 
B) Cash receipts from sale of common stock. 
C) Cash receipts from customers for services provided. 
D) Cash receipts from cost of goods solD.Net income is the result of revenues less cost of goods sold and other expenses.Cash receipts from customers increases revenue, which flows through to an increase in net income.Cash receipts also increase the cash account. 
A) Cash receipts from a bank loan. 
B) Cash receipts from sale of common stock. 
C) Cash receipts from customers for services provided. 
D) Cash receipts from cost of goods solD.Net income is the result of revenues less cost of goods sold and other expenses.Cash receipts from customers increases revenue, which flows through to an increase in net income.Cash receipts also increase the cash account.

Question 5

Which of the following has the legal authority to determine financial reporting in the United States?

Accepted Answer

A) Financial Accounting Standards Board. 
B) American Accounting Association. 
C) Securities and Exchange Commission. 
D) Public Company Accounting Oversight BoarD.The Securities and Exchange Commission is the government agency that determines the financial statements that public companies must provide to stockholders. 
A) Financial Accounting Standards Board. 
B) American Accounting Association. 
C) Securities and Exchange Commission. 
D) Public Company Accounting Oversight BoarD.The Securities and Exchange Commission is the government agency that determines the financial statements that public companies must provide to stockholders.

Question 6

Laker Company has provided the following information for its most recent year of operation:
Cash collected from customers totaled $99,300.
Cash borrowed from banks totaled $42,700.
Cash paid to employees totaled $23,300.
Cash paid for interest totaled $3,100.
Cash received from selling an investment in Husky stock totaled $73,000.
Cash payments to banks for repayment of money borrowed totaled $9,700.
Cash paid for operating expenses totaled $11,200.
Land costing $75,000 was sold for $75,000 cash.
Cash paid for dividend payments to stockholders totaled $7,700.
Calculate Laker's net cash flow from investing activities.

Accepted Answer

Net cash flow from investing a

Question 7

For the year 2016, net income of Carol Company is $20,000 and dividends declared are $6,000; therefore, retained earnings have increased $26,000 during the year.

Accepted Answer

A) True 
 B)False

Question 8

The accounting equation states that Assets = Liabilities + Stockholders' Equity.

Accepted Answer

A) True 
 B)False

Question 9

Larson Company ends its recent year of operations with $3,500,000 in retained earnings. During the year Larson's net income exceeded its dividend declarations by $200,000. Larson's dividend declarations were $25,000 greater than the dividend payments.
Requirement:
How much was Larson Company's beginning retained earnings?

Accepted Answer

Beginning retained earnings =

Question 10

Which of the following statements is correct?

Accepted Answer

A) The payment of a cash dividend reduces net income. 
B) Cash received from issuing common stock to stockholders is reported as a financing activity cash flow within the statement of cash flows. 
C) Providing services to a customer on account does not impact net income. 
D) Interest payments are reported within the statement of cash flows as a financing activity. 
A) The payment of a cash dividend reduces net income. 
B) Cash received from issuing common stock to stockholders is reported as a financing activity cash flow within the statement of cash flows. 
C) Providing services to a customer on account does not impact net income. 
D) Interest payments are reported within the statement of cash flows as a financing activity.

Which of the following is a disadvantage of a corporation when compared to a partnership?

A company's retained earnings increased $375,000 last year and its assets increased $973,000. The company declared a $79,000 cash dividend during the year. What was last year's net income?

How are creditor and investor claims reported on a balance sheet?

Which of the following transactions increases both cash and net income?

Which of the following has the legal authority to determine financial reporting in the United States?

For the year 2016, net income of Carol Company is $20,000 and dividends declared are $6,000; therefore, retained earnings have increased $26,000 during the year.

The accounting equation states that Assets = Liabilities + Stockholders' Equity.

Which of the following statements is correct?

Investing and Financing Decisions and the Accounting System

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 1: Financial Statements and Business Decisions

Which of the following is a disadvantage of a corporation when compared to a partnership?

A company's retained earnings increased $375,000 last year and its assets increased $973,000. The company declared a $79,000 cash dividend during the year. What was last year's net income?

How are creditor and investor claims reported on a balance sheet?

Which of the following transactions increases both cash and net income?

Which of the following has the legal authority to determine financial reporting in the United States?

For the year 2016, net income of Carol Company is $20,000 and dividends declared are $6,000; therefore, retained earnings have increased $26,000 during the year.

The accounting equation states that Assets = Liabilities + Stockholders' Equity.

Which of the following statements is correct?

Investing and Financing Decisions and the Accounting System

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