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Terms in this set (68)
1.
Which of the following questions is most likely to be asked by a creditor?
Will the company be capable of repaying its debt when it is due?
What are the company's terms of credit with its suppliers?
Will the company's stock increase in value?
What is the amount of taxes owed to the government?
Will the company's stock increase in value?
2.
Which of the following questions is most likely to be asked by an investor?
What are the company's terms of credit with its suppliers?
What is the amount of taxes owed to the government?
Will the company be able to repay its debt when it is due?
Will the company's stock increase in value?
Will the company's stock increase in value?
3. Which of the following is a feature of the corporate form of business ownership?
Unlimited liability
Lower tax rates
Limited resources
Double taxation
Double taxation
4. Which of the following is an alternate form of the accounting equation?
Assets − Liabilities = Stockholders' Equity
Revenues − Expenses = Net Income
Assets =
Liabilities − Stockholders' Equity
Expenses − Dividends = Net Income
Assets − Liabilities = Stockholders' Equity
5.
If stockholders' equity is $50,000 and liabilities are $78,000, then assets must equal:
$28,000
$50,000
$78,000
$128,000
128,000
6.
Expenses are best defined as:
Amounts owed to
creditors.
Amounts the owners have invested in the business.
Costs of providing products and services.
Distributions to stockholders.
Costs of providing products and services.
7. Which of the following is not one of the four primary financial statements?
Balance Sheet
Trial Balance
Income Statement
Statement of Cash Flows
Trial Balance
8. Use the following amounts to calculate net income: Assets, $165,000; Dividends, $9,000; Expenses, $61,000; Liabilities, $74,000; Revenues, $82,000.
$12,000
$21,000
$30,000
$91,000
NI=R-E
NI=82,00-61,00=21,00
9. The balance sheet:
Presents the financial position of a company at a point in time.
Indicates if a company is profitable.
Shows the net
change in cash over a period of time.
Reports the difference between revenues and expenses.
Presents the financial position of a company at a point in time.
10. The statement of cash flows:
Presents the financial position of a company at a point in time.
Indicates if a company is profitable.
Shows the net change in cash over a period of time.
Reports the difference between revenues and
expenses.
Presents the financial position of a company at a point in time.
11. Net income appears in which two financial statements?
Balance Sheet and Statement of Cash Flows
Balance Sheet and Statement of Stockholders' Equity
Income Statement and Statement of Cash Flows
Income Statement and Statement of Stockholders' Equity
Income Statement and Statement of Stockholders' Equity
12.
You are reading a particular section of a bank's annual report. This section provides the bank's views about the impact of an upcoming regulation on the banking industry as a whole and the bank in particular. Which section of the annual report are you reading?
The income statement
The statement of stockholders' equity
Management's discussion and analysis
Note disclosures to the financial statements
Management's discussion and analysis
13. Which of the following best explains a company's stock price performance?
Dividends
Net income
Accounts receivable
Preferred stock
Net income
BC: No single piece of company information better explains companies' stock price performance than does financial accounting net income
14. Which of the following is an important indicator of a company management's ability to respond to business situations and the possibility of bankruptcy?
Inventory
Accumulated depreciation
Total stockholders' equity
Total liabilities
Total liabilities
BC: (A company's debt level is an important indicator of management's ability to respond to business situations and the possibility of bankruptcy.)
15.
The organization responsible for creating a single set of global accounting standards is the:
International Accounting Standards Board
Internal Revenue Service
Financial Accounting Standards Board
Securities and Exchange Commission
Financial Accounting Standards Board
16. What was the objective of the 1933 Securities Act?
It set forth accounting and disclosure requirements for initial
offerings of securities.
It provided for the regulation of auditors and the types of services they furnish to clients.
It paved the way for the creation of the Public Company Accounting Oversight Board.
It created a government agency, the Securities and Exchange Commission (SEC).
It set forth accounting and disclosure requirements for initial offerings of securities.
17. The FASB has explicitly stated the specific objectives of financial accounting. Which of the following is not one of those objectives?
Helps to predict cash flows.
Tells about economic resources, claims to resources, and changes in resources and claims.
It is useful to investors and creditors in making decisions.
It is useful to company management in making decisions.
It is useful to company management in making decisions.
18.
Ethics is best described as:
A consensus among different measures.
The rules of financial accounting.
A code or moral system that provides criteria for evaluating right and wrong behavior.
Accounting information that is complete, neutral, and free from error.
A code or moral system that provides criteria for evaluating right and wrong behavior.
19.
From the list that follows, identify a
company where a private accountant could possibly work.
Target
Ernst & Young
KPMG
Deloitte
...
1. The primary functions of accounting are to:
increase a company's stock market valuation.
increase a company's profitability.
provide information to taxing authorities.
measure a company's activities.
communicate information to decision makers.
measure a company's activities.
A business organization that is legally separate from its owners is called a(n)____________________ (Enter one word per blank)
corporation, corporate, or corporations
3. Companies communicate information about their business activities primarily through
their tax return.
financial statements.
public relations announcements.
financial statements
4. Which of the following are financial statements? (Select all that apply.)
Statement of corporate responsibility
Statement of stockholders' equity
Statement of assets
Income statement
Balance sheet
Balance sheet
Statement of stockholders' equity
Income statement
5. An income statement reports: (Select all that apply.)
amounts contributed by stockholders
net income or loss
revenues
cash
expenses
net income or loss
revenues
expenses
6. The system that maintains records of a company's operations and then communicates that information to decision makers is referred to as
accounting
7. The form of business organization where an entity is legally separate from its owners and issues shares of stock is a
proprietorship.
corporation.
partnership
corporation.
8. ---------------------Statements represent a company's primary means of communicating information to external users. (Enter one word per blank.)
Financial, Finance, or Financing
9. The two sources of stockholders' equity are amounts
paid in from shareholders
borrowed from banks
borrowed from related companies
earned by the corporatio
paid in from shareholders
earned by the corporatio
10. The four financial statements published to provide information to external users include which of the following?
statement of Stockholders' Equity
Balance
Sheet
Statement of Cash Flows
Statement of Assets
Income Statement
Statement of Business Activities
Statement of Stockholders' Equity
Balance Sheet
Statement of Cash Flows
Income Statement
11.The financial statement that summarizes revenues and expenses for a period of time is the----------, ___________________
Blank 1: income
Blank 2:
statement
12. The primary functions of accounting are to:
measure a company's activities.
provide information to taxing authorities.
increase a company's profitability.
communicate information to decision makers.
increase a company's stock market valuation.
measure a company's activities.
communicate information to decision makers.
13. An advantage of the corporate form of organization is that a corporation
does not have to pay its creditors.
provides limited liability to stockholders.
is not taxed.
is not regulated.
provides limited liability to stockholders.
Reason:
A corporation is taxed at the corporate level.
14. Retained earnings represents
the total operating, investing, and financing activities of the
company.
the total net income earned over the life of the company that has not been distributed as dividends.
the total cash the company has accumulated over its life.
the net assets of the company during the current period.
the total net income earned over the life of the company that has not been distributed as dividends
15. Stockholders' equity arises primarily from amounts invested by shareholders and amounts ______.
borrowed from banks
earned by the corporation
borrowed from investors
received by customers
earned by the corporation
16. Profits earned by a company that have not been paid to stockholders are called___________earnings
retained
17. The financial statement that displays a firm's financial position on a particular date is the
balance sheet
18. The financial statement that summarizes the profit-generating activities of a company during a particular period of time is the
income statement.
statement of stockholders' equity.
balance sheet.
statement of cash flows.
income statement.
The
accounting equation is: Assets = Liabilities +
Revenues
Creditors' Interest
Net Income
Retained Earnings
Stockholders' Equity
Stockholders' Equity
20. The system that maintains records of a company's operations and then communicates that information to decision makers is referred to as____________
Accounting
21. Which of these would be found on a company's balance sheet? (Select all that apply.)
Depreciation expense
Equipment
Accounts receivable
Sales revenue
Notes payable
Equipment
Accounts receivable
Notes payable
22. Undistributed profits that have accumulated in the company over time are called_______
retained
23. Which of the following items are found on a balance sheet? (Select all that apply.)
Assets
Liabilities
Revenue
Stockholders' equity
Dividends
Assets
Liabilities
Stockholders' equity
24. Ending retained earnings is calculated as
beginning retained earnings + net income + dividends
net income + dividends
assets + net income - dividends
beginning retained earnings + net income -
dividends
beginning retained earnings + net income - dividends
25. Which of the following financial statements shows a firm's financial position on a particular date?
ncome statement
Statement of stockholders' equity
Statement of cash flows
Balance sheet
Balance sheet
26, The accounting equation is: Assets = ______ + Stockholders' Equity.
Expenses
Dividends
Revenues
Liabilities
Liabilities
27. The purpose of a statement of cash flows is to provide information about the
cash receipts and cash disbursements during a period.
assets, liabilities, and stockholders' equity used during the period.
assets used during the period.
income and related expenses during the period
cash receipts and cash disbursements during a period.
28. Which of the following appear(s) on the balance sheet?
Accounts receivable
Net income
Common stock
Utilities payable
Salaries expense
Accounts receivable
Common stock
Utilities payable
29. A balance sheet lists the assets,_______, and stockholders' equity as of a specific date
liabilities or liability
30. The financial statement that is most useful in explaining a company's stock price performance is the
statement of stockholders' equity.
income statement.
balance sheet.
income statement.
31. A net loss ______ retained earnings.
Multiple choice question.
increases
decreases
has
no effect on
decreases
32. The financial statement that displays a firm's financial position on a particular date is the_______________,__________________
Blank 1: balance
Blank 2: sheet
In our society, the two main functions of accounting are to
measure business activities.
report activities to government
regulators.
communicate information to investors and creditors.
report net income to tax authorities.
measure business activities.
communicate information to investors and creditors.
34. The financial statement that provides information about cash receipts and cash disbursements for the period is the
balance sheet.
statement of retained earnings.
income statement.
statement of cash
flows.
statement of cash flows.
35. Which of the following are attributes of FASB? (Select all that apply.)
Independence
Private sector organization
Public sector organization
Full-time board members
Part-time board members
Independence
Private sector organization
Full-time board members
36. Which of these would be found on a company's balance sheet?
Notes payable
Depreciation expense
Equipment
Sales revenue
Accounts receivable
Notes payable
Equipment
Accounts receivable
37. Information that best explains companies' stock price performance is reported on the _____________, _______________
Blank 1: income
Blank 2: statement
38. When a company earns net income, its retained earnings:
increase
are converted to cash
are paid to stockholders
decrease
increase
39.________________ is a term that refers to a code or moral system that provides criteria for evaluating right or wrong.
Ethics, Ethical conduct, Ethical, or Ethic
The two main functions of accounting______________Unavailable are to (1) measure business activities and (2) to communicate those measurements to investors and creditors. (Enter only one word.)
accounting or accountants
41. Which of the following knowledge and skills should an accounting professional possess?
Fluency in several languages
Presentation skills
Leadership skills
Technical
accounting knowledge
Ability to work in teams
Presentation skills
Leadership skills
Technical accounting knowledge
Ability to work in teams
42. ________is the common abbreviation for the Board that currently establishes financial accounting and reporting standards in the U.S.
Blank 1: FASB
43. True or false: Accounting professionals enjoy a wide variety of career opportunities.
True
44. The financial statement that is most useful in explaining a company's stock price performance is the
statement of stockholders' equity.
balance sheet.
income statement.
income statement.
45. A code or moral system that provides criteria for evaluating right and wrong is referred to as
ethics.
a dilemma system.
a values model.
standards.
ethics.
46. Technical accounting skills represent the only skills required of accounting professionals______________ accounting
private
47. To be useful for decision making, information should possess the fundamental qualities of relevance and________rpresentation
faithful, faithfulness, or faithfully
48. The two main career paths in accounting are referred to as
SEC
private
tax
public
private
public
49. The hierarchy of qualitative characteristics of financial information require that, in order to be useful for decision making, information should possess the fundamental characteristics of
neutrality and materiality.
materiality and consistency.
relevance and faithful representation.
cost and benefit.
relevance and faithful representation.
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Verified questionsACCOUNTING
Sundance Systems has the following transactions during July. $$ \begin{array}{ll} \text{July 5} & \text{Purchases 40 LCD televisions on account from Red River Supplies for \$2,500 each,}\\ \text{ } & \text{terms 3/10, n/30.}\\ \text{July 8} & \text{Returns to Red River two televisions that had defective sound.}\\ \text{July 13} & \text{Pays the full amount due to Red River.}\\ \text{July 28} & \text{Sells remaining 38 televisions from July 5 for \$3,000 each on account.}\\ \end{array} $$ Record the transactions of Sundance Systems, assuming the company uses a perpetual inventory system.
Verified answer
ACCOUNTING
A journal and general ledger accounts are given in the Working Papers. Work this problem independently. Transactions: July 1. Discovered that a transaction for supplies bought last month was journalized and posted in error as a debit to Prepaid Insurance instead of Supplies, $\$110. 00$. M23. 1. Discovered that a transaction for advertising expense for last month was journalized and posted in error as a debit to Miscellaneous Expense instead of Advertising Expense, $\$440.00$. M24. It was also discovered that two posting errors were made in the owner's capital account. The June 1 entry amount should have been $\$25,000.00$. The June 15 entry included a credit to the capital account for $\$1, 000$. 00 that was posted in error as a debit. Using the account provided in the Working Papers and the information given, correct the two posting errors.
Verified answer
ACCOUNTING
If the owner of a company takes merchandise for personal use, what account is debited? a. Owner’s capital b. Owner’s withdrawals c. Purchases d. Cash
Verified answer
ACCOUNTING
The following transactions occur for the Panther Detective Agency during the month of July: a. Purchase a truck and sign a note payable, $15,000. b. Purchase office supplies for cash,$600. c. Pay $800 in rent for the current month. Record the transactions. The company uses the following accounts: Cash, Supplies, Equipment (for the truck), Notes Payable, and Rent Expense.
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