Question 1

GAAP refers to:

Accepted Answer

A)  general accounting and auditing principles. 
B)  guidelines for American accounting procedures. 
C)  General Association of Accounting Practitioners. 
D)  generally accepted accounting principles. 
A)  general accounting and auditing principles. 
B)  guidelines for American accounting procedures. 
C)  General Association of Accounting Practitioners. 
D)  generally accepted accounting principles. D

Question 2

Limited liability (no liability beyond investment) is not enjoyed by the owner(s) of a:

Accepted Answer

A)  partnership and proprietorship. 
B)  partnership and corporation. 
C)  proprietorship and corporation. 
D)  corporation. 
A)  partnership and proprietorship. 
B)  partnership and corporation. 
C)  proprietorship and corporation. 
D)  corporation. A

Question 3

If total liabilities decreased by $30,000 during a period of time and stockholders' equity increased by $35,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is a:

Accepted Answer

A)  $65,000 increase. 
B)  $5,000 increase. 
C)  $5,000 decrease. 
D)  $65,000 decrease. 
A)  $65,000 increase. 
B)  $5,000 increase. 
C)  $5,000 decrease. 
D)  $65,000 decrease. B

Question 4

Which of the following is FALSE?

Accepted Answer

A)  Intangible assets are noncurrent assets that do not have physical substance. 
B)  Obligations expected to be paid after one year are classified as long-term liabilities. 
C)  Current assets are listed in the order of magnitude (size). 
D)  Property, plant, and equipment are assets with relatively long useful lives that are used in operating the business. 
A)  Intangible assets are noncurrent assets that do not have physical substance. 
B)  Obligations expected to be paid after one year are classified as long-term liabilities. 
C)  Current assets are listed in the order of magnitude (size). 
D)  Property, plant, and equipment are assets with relatively long useful lives that are used in operating the business.

Question 5

In accounting, which of the following is NOT a description of faithful representation as it relates to accounting information?

Accepted Answer

A)  Complete. 
B)  Be the least likely to overstate assets or income. 
C)  Free from error. 
D)  Neutral. 
A)  Complete. 
B)  Be the least likely to overstate assets or income. 
C)  Free from error. 
D)  Neutral.

Question 6

The Retained Earnings account had a beginning balance of $60,000 and an ending balance of $70,000. If $20,000 of dividends were declared and paid during the period, net income must have been:

Accepted Answer

A)  $20,000. 
B)  $30,000. 
C)  $10,000. 
D)  $50,000. 
A)  $20,000. 
B)  $30,000. 
C)  $10,000. 
D)  $50,000.

Question 7

Indicate which of the following items would not be reported in the operating section of the statement of cash flows.

Accepted Answer

A)  Cash received from customers 
B)  Cash paid for dividends. 
C)  Cash paid for salaries. 
D)  Cash received for dividends. 
A)  Cash received from customers 
B)  Cash paid for dividends. 
C)  Cash paid for salaries. 
D)  Cash received for dividends.

Question 8

Which of the following is a separate legal entity?

Accepted Answer

A)  Proprietorship. 
B)  Sole proprietorship. 
C)  Corporation. 
D)  Partnership. 
A)  Proprietorship. 
B)  Sole proprietorship. 
C)  Corporation. 
D)  Partnership.

Question 9

Financial statements combining the operations of Macy's and Dillard's would violate the:

Accepted Answer

A)  monetary unit assumption. 
B)  economic entity assumption. 
C)  cost principle. 
D)  full disclosure principle. 
A)  monetary unit assumption. 
B)  economic entity assumption. 
C)  cost principle. 
D)  full disclosure principle.

Question 10

Current assets are listed:

Accepted Answer

A)  alphabetically. 
B)  by importance. 
C)  by longevity. 
D)  by liquidity. 
A)  alphabetically. 
B)  by importance. 
C)  by longevity. 
D)  by liquidity.

Question 11

A financial statement that reports accounting data at a specific date is the:

Accepted Answer

A)  balance sheet. 
B)  retained earnings statement. 
C)  income statement. 
D)  statement of cash flows. 
A)  balance sheet. 
B)  retained earnings statement. 
C)  income statement. 
D)  statement of cash flows.

Question 12

To be relevant, accounting information must:

Accepted Answer

A)  be capable of making a difference in a decision. 
B)  be presented on the balance sheet. 
C)  be recorded at historical cost. 
D)  improve the company's internal control. 
A)  be capable of making a difference in a decision. 
B)  be presented on the balance sheet. 
C)  be recorded at historical cost. 
D)  improve the company's internal control.

Question 13

Which of the following is NOT considered an external user of accounting information?

Accepted Answer

A)  Bankers. 
B)  Taxing authority. 
C)  Manager. 
D)  Labor Unions. 
A)  Bankers. 
B)  Taxing authority. 
C)  Manager. 
D)  Labor Unions.

Question 14

Which is an indicator of profitability?

Accepted Answer

A)  Current ratio. 
B)  Earnings per share. 
C)  Free cash flow. 
D)  Working capital. 
A)  Current ratio. 
B)  Earnings per share. 
C)  Free cash flow. 
D)  Working capital.

GAAP refers to:

Limited liability (no liability beyond investment) is not enjoyed by the owner(s) of a:

If total liabilities decreased by $30,000 during a period of time and stockholders' equity increased by $35,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is a:

Which of the following is FALSE?

In accounting, which of the following is NOT a description of faithful representation as it relates to accounting information?

The Retained Earnings account had a beginning balance of $60,000 and an ending balance of $70,000. If $20,000 of dividends were declared and paid during the period, net income must have been:

Indicate which of the following items would not be reported in the operating section of the statement of cash flows.

Which of the following is a separate legal entity?

Financial statements combining the operations of Macy's and Dillard's would violate the:

Current assets are listed:

A financial statement that reports accounting data at a specific date is the:

To be relevant, accounting information must:

Which of the following is NOT considered an external user of accounting information?

Which is an indicator of profitability?

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Filters

Exam 1: Introduction to Financial Statements

GAAP refers to:

Limited liability (no liability beyond investment) is not enjoyed by the owner(s) of a:

If total liabilities decreased by $30,000 during a period of time and stockholders' equity increased by $35,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is a:

Which of the following is FALSE?

In accounting, which of the following is NOT a description of faithful representation as it relates to accounting information?

The Retained Earnings account had a beginning balance of $60,000 and an ending balance of $70,000. If $20,000 of dividends were declared and paid during the period, net income must have been:

Indicate which of the following items would not be reported in the operating section of the statement of cash flows.

Which of the following is a separate legal entity?

Financial statements combining the operations of Macy's and Dillard's would violate the:

Current assets are listed:

A financial statement that reports accounting data at a specific date is the:

To be relevant, accounting information must:

Which of the following is NOT considered an external user of accounting information?

Which is an indicator of profitability?

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Filters