Question 1

is the capacity of information to make a difference in a decision.

Accepted Answer

The answer of is the capacity of information to make...

Question 2

Which one of the following is not one of the three activities included in the definition of accounting?

Accepted Answer

A)  Communicating 
B)  Identifying 
C)  Measuring 
D)  Operating

Question 3

Another name for profits or earnings of a business is .

Accepted Answer

The answer of Another name for profits or earnings of...

Question 4

Because market values are subjective, many assets are carried on the balance sheet at their acquisition cost.

Accepted Answer

A) True 
 B)False

Question 5

resented below are condensed data from the financial statements of Faux Factory for 2015 and 2014. The figures are expressed in thousands. Use this information to answer the questions that follow.
  
1. What is the name of Statement A?
  
2. What is the name of Statement B?

Accepted Answer

The answer of resented below are condensed data from the...

Question 6

Under current accounting principles, how is net income on the income statement measured?

Accepted Answer

A)  Net change in owners' equity during the period. 
B)  Excess of revenues over expenses during the period. 
C)  Net change in the cash balance during the period. 
D)  Excess of revenues over expenses less any dividends paid during the period.

Question 7

According to the accounting profession, the purpose of financial reporting is to provide information about a company that investors, lenders, and other creditors can use when deciding whether to provide resources to the entity.

Accepted Answer

A) True 
 B)False

Question 8

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.
-A future benefit.

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 9

The costs of doing business through the sale of goods and services are called:

Accepted Answer

A)  Net income. 
B)  Expenses. 
C)  Revenues. 
D)  Dividends.

Question 10

Marcos Company reported the following items on its financial statements for the year ending December 31, 2015:  How much will be reported as retained earnings on Marcos' balance sheet at December 31, 2015, if this is the first year of operations?

Accepted Answer

A)  $ 45,000 
B)  $ 65,000 
C)  $ 85,000 
D)  Not enough information is provided.

Question 11

Which one of the following subtotals or totals would appear in a multiple-step, but not a single-step income statement?

Accepted Answer

A)  Income tax expense 
B)  Income from operations 
C)  Cost of goods sold 
D)  Net income

Question 12

On the statement of cash flows, the section involves the issuance and repayment of long term liabilities and stock transactions.

Accepted Answer

The answer of On the statement of cash flows, the...

Question 13

If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable to settle an open account will cause the ratio to decrease.

Accepted Answer

A) True 
 B)False

Question 14

GAAP stands for Generally Accepted Auditing Procedures.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

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

Question 16

Independent auditors CPAs render an opinion that the financial statements do or do not fairly present a company's financial position, operating results, and cash flows.

Accepted Answer

A) True 
 B)False

Question 17

Information that is material means that an error or alternative method of handling a transaction:

Accepted Answer

A)  would possibly affect the judgment of someone relying on the financial statements. 
B)  would not affect the decisions of users. 
C)  might cause a company to understate its earnings for the accounting period. 
D)  could increase the profitability of a company.

Question 18

In the independent auditors' report included with the annual report, management discusses the financial statements and provides the shareholders with explanations for certain amounts reported in the statements.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements would be true if you own stock in a company?

Accepted Answer

A)  You are an owner of the retained earnings and capital stock of the company. 
B)  You have a claim to the assets of the business. 
C)  You have the right to receive interest on an annual basis. 
D)  You have the right to a portion of the company's revenues each accounting period.

Question 20

Although businesses engage in a wide variety of activities, all of these activities can be categorized into three types. Which of the following choices best reflects these three types of business activities?

Accepted Answer

A)  Operating, financing, reporting 
B)  Investing, reporting, financing 
C)  Operating, financing, investing 
D)  Investing, reporting, operating

Exam 1: Accounting As a Form of Communication

is the capacity of information to make a difference in a decision.

Which one of the following is not one of the three activities included in the definition of accounting?

Another name for profits or earnings of a business is .

Because market values are subjective, many assets are carried on the balance sheet at their acquisition cost.

resented below are condensed data from the financial statements of Faux Factory for 2015 and 2014. The figures are expressed in thousands. Use this information to answer the questions that follow. 1. What is the name of Statement A? 2. What is the name of Statement B?

Under current accounting principles, how is net income on the income statement measured?

According to the accounting profession, the purpose of financial reporting is to provide information about a company that investors, lenders, and other creditors can use when deciding whether to provide resources to the entity.

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. -A future benefit.

The costs of doing business through the sale of goods and services are called:

Marcos Company reported the following items on its financial statements for the year ending December 31, 2015: How much will be reported as retained earnings on Marcos' balance sheet at December 31, 2015, if this is the first year of operations?

Which one of the following subtotals or totals would appear in a multiple-step, but not a single-step income statement?

On the statement of cash flows, the section involves the issuance and repayment of long term liabilities and stock transactions.

If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable to settle an open account will cause the ratio to decrease.

GAAP stands for Generally Accepted Auditing Procedures.

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

Independent auditors CPAs render an opinion that the financial statements do or do not fairly present a company's financial position, operating results, and cash flows.

Information that is material means that an error or alternative method of handling a transaction:

In the independent auditors' report included with the annual report, management discusses the financial statements and provides the shareholders with explanations for certain amounts reported in the statements.

Which of the following statements would be true if you own stock in a company?

Although businesses engage in a wide variety of activities, all of these activities can be categorized into three types. Which of the following choices best reflects these three types of business activities?