Question 1

All of the following would be considered owners' equity accounts except

Accepted Answer

A)  common stock. 
B)  preferred stock. 
C)  stockholders' equity. 
D)  accounts payable. 
E)  retained earnings.

Question 2

In double-entry bookkeeping,after gathering together and analyzing source documents and recording each financial transaction in a journal,a financial manager,bookkeeper,or accountant next

Accepted Answer

A)  closes out the books. 
B)  posts transactions in a journal. 
C)  posts transactions in a ledger. 
D)  prepares a trial balance. 
E)  balances the accounting equation.

Question 3

All of the following could be expense accounts except

Accepted Answer

A)  interest expense. 
B)  retained expense. 
C)  general and administrative expense. 
D)  research and development expense. 
E)  depreciation expense.

Question 4

When a company wants to place a value on a physical asset for its balance sheet,it must

Accepted Answer

A)  reduce the value by the amount the asset has depreciated. 
B)  auction the asset off. 
C)  ask its competitors what the asset is worth. 
D)  price a new one. 
E)  increase the value by the amount the asset has appreciated.

Question 5

The accounting cycle collects,records,and analyzes raw data constantly through the business's life cycle.

Accepted Answer

A) True 
 B)False

Question 6

A company's short-term financial obligations are called its

Accepted Answer

A)  current assets. 
B)  equity. 
C)  net profit. 
D)  current liabilities. 
E)  accounts payable.

Question 7

Accounting is the recording,measurement,and interpretation of financial information.

Accepted Answer

A) True 
 B)False

Question 8

Net income is the profit (or sometimes loss)after all expenses,excluding taxes,have been deducted from revenue.

Accepted Answer

A) True 
 B)False

Question 9

Why are income statements temporary in nature?

Accepted Answer

The answer of Why are income statements temporary in nature?...

Question 10

All of the following represent assets except

Accepted Answer

A)  cash. 
B)  inventory. 
C)  land. 
D)  equipment. 
E)  a bank loan.

Question 11

The terms accounting and bookkeeping are interchangeable because they mean almost the same thing.

Accepted Answer

A) True 
 B)False

Question 12

Morgan was asked to extend trade credit to a restaurant she hadn't serviced before.She asked to see its balance sheet to determine if it could pay its bills.She divided its current assets by current liabilities to get its

Accepted Answer

A)  current ratio. 
B)  receivable turnover. 
C)  inventory turnover. 
D)  earnings per share. 
E)  book value per share.

Question 13

CPA stands for

Accepted Answer

A)  Certified Private Accountant. 
B)  Credentialed Private Accountant. 
C)  Credentialed Public Accountant. 
D)  Certified Public Accountant. 
E)  Certified Professional Accountant.

Question 14

The balance sheet uses all of the following account titles to describe assets except

Accepted Answer

A)  accounts receivable. 
B)  cash. 
C)  inventory. 
D)  current assets. 
E)  deferred income taxes.

Question 15

Which of the following equations is equivalent to the accounting equation?

Accepted Answer

A)  Equity = liabilities - assets 
B)  Owners' equity = assets - liabilities 
C)  Revenues - expenses = net income 
D)  Net income = expenses - revenues + taxes 
E)  Profit = sales - revenues

Question 16

Define double-entry bookkeeping and explain how to use it,keeping the accounting equation in balance.

Accepted Answer

The answer of Define double-entry bookkeeping and explain how to...

Question 17

What is owners' equity? How can stock issues complicate how the owners' equity account is recorded?

Accepted Answer

The answer of What is owners' equity? How can stock...

Question 18

What is the last step that must be done before a firm's books can be closed for an accounting cycle?

Accepted Answer

A)  The annual reports must be prepared. 
B)  The journal must be filled out. 
C)  The information from the journal must be transferred to the ledger. 
D)  A CPA must attest that good principles were used in the preparation of the document. 
E)  The trial balance must be verified.

Question 19

All business transactions can be classified as assets,liabilities,or owner's equity.

Accepted Answer

A) True 
 B)False

Question 20

Small businesses do not have a need for the financial information compiled by accountants.

Accepted Answer

A) True 
 B)False

Exam 14: Accounting and Financial Statements

All of the following would be considered owners' equity accounts except

In double-entry bookkeeping,after gathering together and analyzing source documents and recording each financial transaction in a journal,a financial manager,bookkeeper,or accountant next

All of the following could be expense accounts except

When a company wants to place a value on a physical asset for its balance sheet,it must

The accounting cycle collects,records,and analyzes raw data constantly through the business's life cycle.

A company's short-term financial obligations are called its

Accounting is the recording,measurement,and interpretation of financial information.

Net income is the profit (or sometimes loss)after all expenses,excluding taxes,have been deducted from revenue.

Why are income statements temporary in nature?

All of the following represent assets except

The terms accounting and bookkeeping are interchangeable because they mean almost the same thing.

Morgan was asked to extend trade credit to a restaurant she hadn't serviced before.She asked to see its balance sheet to determine if it could pay its bills.She divided its current assets by current liabilities to get its

CPA stands for

The balance sheet uses all of the following account titles to describe assets except

Which of the following equations is equivalent to the accounting equation?

Define double-entry bookkeeping and explain how to use it,keeping the accounting equation in balance.

What is owners' equity? How can stock issues complicate how the owners' equity account is recorded?

What is the last step that must be done before a firm's books can be closed for an accounting cycle?

All business transactions can be classified as assets,liabilities,or owner's equity.

Small businesses do not have a need for the financial information compiled by accountants.