Question 1

A 12% change in sales will result in a 12% change in net income.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

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

Question 3

The balance sheet is a statement that summarizes revenues and expenses for a period.

Accepted Answer

A) True 
 B)False

Question 4

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.
-Cost of goods sold

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 5

Provided below is a list of important users of accounting information. Below the list are descriptions of a major need of each of the various users. Fill in the blank with the one user group that is most likely to have the need described to the right of the blank. Some user groups may be used more than once or not at all.
-The prospects for future dividend payments.

Accepted Answer

A) Stockholder 
B) Company management 
C) Supplier 
D) Banker 
E) Internal Revenue Service
F)Securities and Exchange Commission
G)Labor union

Question 6

Which one of the following correctly represents one of the basic financial statement models?

Accepted Answer

A)  Assets - Liabilities = Net Income 
B)  Assets + Liabilities = Owners' Equity 
C)  Revenues + Expenses = Net Income 
D)  Beginning Retained Earnings + Net Income - Dividends = Ending Retained Earnings

Question 7

Presented below are selected data from the accounting records for Micco's Gift Store for 2014.  A Calculate the net income or loss for 2014.
B Explain how the amount from part "A" will affect the financial position of Micco's Gift Store.
C Is the company profitable? Explain your answer.

Accepted Answer

The answer of Presented below are selected data from the...

Question 8

Which of the following is the best description of the purpose of financial reporting?

Accepted Answer

A)  To allow users to access to the daily detailed records of a business. 
B)  To help the users reach their decisions in an informed manner. 
C)  To provide users with an assessment of how long the company will continue as a going concern. 
D)  To allow users access to a list of all the individuals who owe the company money.

Question 9

Which of the following is not an objective of financial reporting?

Accepted Answer

A)  To reflect prospective cash receipts to investors and creditors. 
B)  To reflect prospective cash flows to an enterprise. 
C)  To reflect resources and claim to resources. 
D)  To reflect current stock prices and information concerning stock markets.

Question 10

Three common categories of long-term assets are: 1 property, plant, and equipment, 2 investments, and 3 intangibles.

Accepted Answer

A) True 
 B)False

Question 11

Information must be timely to be relevant.

Accepted Answer

A) True 
 B)False

Question 12

Dividends paid appears on both the income statement and the statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 13

Hopper, Inc.
Use the information from Hopper Inc. to answer the following questions.
 
-Read the information about Hopper, Inc. Which of the following statements is the best answer regarding the company's profit margin?

Accepted Answer

A)  The profit margin was 15.8% in 2014. 
B)  The profit margin was 15.8% in 2013. 
C)  The profit margin was 31.5% in 2014. 
D)  The profit margin was 31.5% in 2013.

Question 14

You are comparing three companies that use different depreciation methods. Which of the following would help you the most in making a comparison of the companies?

Accepted Answer

A)  The average earnings per share for the quarter. 
B)  Prospective cash receipts. 
C)  Claims to resources. 
D)  Disclosure of accounting policies.

Question 15

consists of all activities necessary to provide the members of an economic system with goods and services.

Accepted Answer

The answer of consists of all activities necessary to provide...

Question 16

Which the following organizations are primarily responsible for establishing GAAP today?

Accepted Answer

A)  Financial Accounting Standards Board FASB 
B)  Securities and Exchange Commission SEC 
C)  Internal Revenue Service IRS 
D)  Federal Government

Question 17

Joseph is the president of Sunshine Enterprises. Sunshine Enterprises began business on January 1, 2014. The company's controller is out of the country on business. Joseph needs a copy of the company's balance sheet for a meeting tomorrow and asks his assistant to obtain the required information from the company's records. She presents Joseph with the following balance sheet. He asks you to review it for accuracy.
  Required
1. Prepare a corrected balance sheet.
2. Draft a memo explaining the major differences between the balance sheet Joseph's assistant prepared and the
one you prepared.

Accepted Answer

The answer of Joseph is the president of Sunshine Enterprises....

Question 18

The income statement is sometimes called the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 19

Materiality deals with the size of an error in accounting information.

Accepted Answer

A) True 
 B)False

Question 20

Mobile Power Corp. reported the following information for the year ended December 31, 2015.  What was the retained earnings balance for Mobile Power at December 31, 2014?

Accepted Answer

A)  $ 165,000 
B)  $ 168,000 
C)  $ 182,000 
D)  $ 192,000

Exam 1: Accounting As a Form of Communication

A 12% change in sales will result in a 12% change in net income.

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

The balance sheet is a statement that summarizes revenues and expenses for a period.

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. -Cost of goods sold

Which one of the following correctly represents one of the basic financial statement models?

Presented below are selected data from the accounting records for Micco's Gift Store for 2014. A Calculate the net income or loss for 2014. B Explain how the amount from part "A" will affect the financial position of Micco's Gift Store. C Is the company profitable? Explain your answer.

Which of the following is the best description of the purpose of financial reporting?

Which of the following is not an objective of financial reporting?

Three common categories of long-term assets are: 1 property, plant, and equipment, 2 investments, and 3 intangibles.

Information must be timely to be relevant.

Dividends paid appears on both the income statement and the statement of retained earnings.

Hopper, Inc. Use the information from Hopper Inc. to answer the following questions. -Read the information about Hopper, Inc. Which of the following statements is the best answer regarding the company's profit margin?

You are comparing three companies that use different depreciation methods. Which of the following would help you the most in making a comparison of the companies?

consists of all activities necessary to provide the members of an economic system with goods and services.

Which the following organizations are primarily responsible for establishing GAAP today?

The income statement is sometimes called the statement of financial position.

Materiality deals with the size of an error in accounting information.

Mobile Power Corp. reported the following information for the year ended December 31, 2015. What was the retained earnings balance for Mobile Power at December 31, 2014?