Question 1

____________________ is the process of writing off the cost of tangible assets and ____________________ is the process of writing off the cost of intangible assets.

Accepted Answer

The answer of ____________________ is the process of writing off...

Question 2

The time period assumption assumes a company prepares financial statements every month.

Accepted Answer

A) True 
 B)False

Question 3

If an investor can use accounting information for two different companies to evaluate the types and amounts of expenses, the information is said to have the quality of:

Accepted Answer

A)  Comparability. 
B)  Consistency. 
C)  Neutrality. 
D)  Understandability.

Question 4

Hopper, Inc.
Use the information from Hopper Inc. to answer the following questions.
 
-Read the information about Hopper. Inc. Which statement best represents Hopper's performance?

Accepted Answer

A)  Hopper's profit margin ratio decreased. 
B)  Hopper has become more profitable. 
C)  Hopper's increase in operating revenues increased the company's net income. 
D)  Hopper's operating expenses as a percentage of operating revenues remained the same.

Question 5

The various methods, rules, practices, and other procedures that have evolved over time in response to the need to regulate the preparation of financial statements are called
__________________________________________________.

Accepted Answer

The answer of The various methods, rules, practices, and other...

Question 6

Which concept is the reason the dollar is used in the preparation of financial statements?

Accepted Answer

A)  Going concern 
B)  Legal entity 
C)  Monetary unit 
D)  Time Period

Question 7

Assets may be used to satisfy business obligations and to carry on business operations.

Accepted Answer

A) True 
 B)False

Question 8

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Consulting revenues

Accepted Answer

A) Current Assets balance sheet 
B) Property, Plant, & Equipment balance sheet 
C) Current Liabilities balance sheet 
D) Long-term Liabilities balance sheet 
E) Stockholders' Equity balance sheet
F)Operating Revenue income statement
G)Operating Expenses income statement
H)Other Revenue & Expenses income statement
I)Income Taxes income statement

Question 9

For each item listed, select the section of the balance sheet in which the item would be reported.
-Interest payable

Accepted Answer

A) Current Assets 
B) Property. Plant, and Equipment 
C) Current Liabilities 
D) Long-term Liabilities 
E) Stockholders' Equity

Question 10

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes. Some terms may be used more than once, while others are not used at all.
-The portion of owner's equity that represents the net income less any dividends paid over the life of the entity.

Accepted Answer

A) Capital stock 
B) Asset 
C) Owners' equity 
D) Time period 
E) Dividends
F)Economic entity concept
G)Expense
H)Retained earnings
I)Cost principle
J)Creditor
K)Liability
L)Revenue
M)Going concern
N)Monetary unit
O)Corporation

Question 11

Service-oriented companies have different needs than product-oriented companies when analyzing financial statements.
REQUIRED: Why is this true? Give an example of a financial ratio that is meaningless to a service business.

Accepted Answer

The answer of Service-oriented companies have different needs than product-oriented...

Question 12

Read the information about Burke Company.
Required:
Prepare a multiple-step income statement for the year ended December 31, 2014.

Accepted Answer

The answer of Read the information about Burke Company.
Required:
Prepare a...

Question 13

What financial statement items are investors and creditors most interested in and why?

Accepted Answer

The answer of What financial statement items are investors and...

Question 14

All of the following are important provisions of the Sarbanes-Oxley Act except:

Accepted Answer

A)  The establishment of a new Public Company Accounting Oversight Board. 
B)  The requirement to prepare both FASB and IASB financial statements. 
C)  A requirement that the external auditors report directly to the company's audit committee. 
D)  A clause to prohibit public accounting firms that audit a company from providing any other services that could impair their ability to act independently in the course of their audit.

Question 15

Which one of the following items is correct concerning the time element of financial statements?

Accepted Answer

A)  The balance sheet covers a period of time. 
B)  The statement of retained earnings explains changes during a particular period. 
C)  An income statement lists amounts at a specific point in time. 
D)  Both the income statement and the balance sheet cover a period of time.

Question 16

What is the purpose of an income statement?

Accepted Answer

The answer of What is the purpose of an income...

Question 17

On January 1, 2015, Flaggler Company's balance in retained earnings was $70,000. During 2015, the company earned net income of $43,000 and paid $15,000 in dividends. Calculate the retained earnings balance at December 31, 2015.

Accepted Answer

A) $42,000 
B) $90,000 
C) $98,000 
D) $113,00

Question 18

Which one of the following is a correct expression of the accounting equation?

Accepted Answer

A)  Assets + Liabilities = Owners' Equity 
B)  Assets = Liabilities ­ Owners' Equity 
C)  Assets + Owners' Equity = Liabilities 
D)  Assets = Liabilities + Owners' Equity

Question 19

Several items from the financial statements of Standard Tires are listed below. Use the following answer choices to identify the type of account for each item listed. Place your answers in the space provided.
-Property, plant, and equipment

Accepted Answer

A) Assets 
B) Liabilities 
C) Revenues 
D) Expenses 
E) Owners' equity

Question 20

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Service revenues

Accepted Answer

A) Current Assets balance sheet 
B) Property, Plant, & Equipment balance sheet 
C) Current Liabilities balance sheet 
D) Long-term Liabilities balance sheet 
E) Stockholders' Equity balance sheet
F)Operating Revenue income statement
G)Operating Expenses income statement
H)Other Revenue & Expenses income statement
I)Income Taxes income statement

Exam 1: Accounting As a Form of Communication

is the process of writing off the cost of tangible assets and is the process of writing off the cost of intangible assets.

The time period assumption assumes a company prepares financial statements every month.

If an investor can use accounting information for two different companies to evaluate the types and amounts of expenses, the information is said to have the quality of:

Hopper, Inc. Use the information from Hopper Inc. to answer the following questions. -Read the information about Hopper. Inc. Which statement best represents Hopper's performance?

The various methods, rules, practices, and other procedures that have evolved over time in response to the need to regulate the preparation of financial statements are called __________________________________________________.

Which concept is the reason the dollar is used in the preparation of financial statements?

Assets may be used to satisfy business obligations and to carry on business operations.

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Consulting revenues

For each item listed, select the section of the balance sheet in which the item would be reported. -Interest payable

Service-oriented companies have different needs than product-oriented companies when analyzing financial statements. REQUIRED: Why is this true? Give an example of a financial ratio that is meaningless to a service business.

Read the information about Burke Company. Required: Prepare a multiple-step income statement for the year ended December 31, 2014.