Question 1

Capital stock indicates the owners' contributions to a partnership.

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.
-Accounts receivable

Accepted Answer

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

Question 3

Morton Corporation reported the following information for the year ended December 31, 2015:  What was the balance of Morton's' retained earnings at January 1, 2015?

Accepted Answer

A)  $21,000 
B)  $29,000 
C)  $31,000 
D)  $35,000

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.
-Land

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

Which of the following accounts are normally reported as current liabilities on a classified balance sheet?

Accepted Answer

A)  Accounts payable and bonds payable 
B)  Interest payable and mortgage payable 
C)  Income taxes payable and salaries payable 
D)  Capital stock and accounts payable

Question 6

Match the following characteristics with the statements about each qualitative characteristic's importance.
-This quality allows users to analyze two or more companies and look for similarities and differences.

Accepted Answer

A) Consistency 
B) Materiality 
C) Conservatism 
D) Comparability 
E) Reliability
F)Relevance
G)Understandability

Question 7

Which of the following best describes the term "assets"?

Accepted Answer

A)  The amount of total profits earned by a business since it began operations. 
B)  The amount of interest or claim that the owners have in the business. 
C)  The economic resources of a business entity. 
D)  The cumulative profits earned by a business less any dividends distributed.

Question 8

Which of the following is a five-member body that has the authority from Congress to set standards for conducting audits?

Accepted Answer

A)  FASB 
B)  SEC 
C)  PCAOB 
D)  AICPA

Question 9

Read the information for Taryn Corporation. Determine the following amounts for Taryn Corporation:
A Total revenues for 2014.
  B Total expenses for 2014.
  C What is the purpose of the income statement?
D Is Taryn Corp. profitable? Explain your answer.
E Is this the first year of operations for Taryn Corp.? Explain your answer.

Accepted Answer

The answer of Read the information for Taryn Corporation. Determine...

Question 10

If a company prepares a statement of retained earnings, net income plus dividends are added to beginning retained earnings on this statement.

Accepted Answer

A) True 
 B)False

Question 11

A partnership is a business owned by two individuals; if three or more individuals organize a business, it must be established as a corporation.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following events will cause a company's current ratio to decrease?

Accepted Answer

A)  The sale of inventory for cash. 
B)  The sale of inventory for credit accounts receivable. 
C)  Issuing stock for cash. 
D)  Paying off long-term debt with cash.

Question 13

There is a standard threshold for materiality set by the Financial Accounting Standards Board for all companies.

Accepted Answer

A) True 
 B)False

Question 14

Liquidity relates to a company's ability to do which of the following?

Accepted Answer

A)  The ability to pay its financial obligations as they become due. 
B)  The ability to stay in business over the long run. 
C)  The ability to pay dividends to its stockholders. 
D)  The ability to collect the amount their customers owe the company.

Question 15

Current assets, other than cash, are expected to be sold or consumed are during a company's normal operating cycle.

Accepted Answer

A) True 
 B)False

Question 16

Identify whether the following investor questions are associated with a primary or b secondary financial reporting objectives.
-How much revenue will Apple generate during the time period in which I own the shares?

Accepted Answer

A) primary financial reporting objective 
B) secondary financial reporting objective

Question 17

Assume that you want to determine the profit margin for a company. Which one of the following financial statements is the best source of this information?

Accepted Answer

A)  Statement of retained earnings 
B)  Statement of cash flows 
C)  Statement of stockholders' equity 
D)  Income statement

Question 18

Moss Company
Moss Company has provided the following information from its accounting records for the current year:
 
-Read the information for Moss Corporation. What are Moss' current assets?

Accepted Answer

A)  $ 100,000 
B)  $ 165,000 
C)  $ 210,000 
D)  $ 240,000

Question 19

Which of the following best describes a company's operating activities?

Accepted Answer

A)  Operating activities focus on the sale of products and services. 
B)  Operating activities are necessary to provide the money to start a business. 
C)  Operating activities are needed to provide the valuable assets required to run a business. 
D)  Operating activities represent the right to receive a benefit in the future.

Question 20

Which of the following is a noncurrent asset?

Accepted Answer

A)  Inventories 
B)  Office supplies 
C)  Land 
D)  Accounts receivable

Exam 1: Accounting As a Form of Communication

Capital stock indicates the owners' contributions to a partnership.

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

Morton Corporation reported the following information for the year ended December 31, 2015: What was the balance of Morton's' retained earnings at January 1, 2015?

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. -Land

Which of the following accounts are normally reported as current liabilities on a classified balance sheet?

Match the following characteristics with the statements about each qualitative characteristic's importance. -This quality allows users to analyze two or more companies and look for similarities and differences.

Which of the following best describes the term "assets"?

Which of the following is a five-member body that has the authority from Congress to set standards for conducting audits?

If a company prepares a statement of retained earnings, net income plus dividends are added to beginning retained earnings on this statement.

A partnership is a business owned by two individuals; if three or more individuals organize a business, it must be established as a corporation.

Which of the following events will cause a company's current ratio to decrease?

There is a standard threshold for materiality set by the Financial Accounting Standards Board for all companies.

Liquidity relates to a company's ability to do which of the following?

Current assets, other than cash, are expected to be sold or consumed are during a company's normal operating cycle.

Identify whether the following investor questions are associated with a primary or b secondary financial reporting objectives. -How much revenue will Apple generate during the time period in which I own the shares?

Assume that you want to determine the profit margin for a company. Which one of the following financial statements is the best source of this information?

Moss Company Moss Company has provided the following information from its accounting records for the current year: -Read the information for Moss Corporation. What are Moss' current assets?

Which of the following best describes a company's operating activities?

Which of the following is a noncurrent asset?