Question 1

The quality of consistency is a type of

Accepted Answer

A) relevance. 
B) materiality. 
C) comparability. 
D) faithful representation. 
A) relevance. 
B) materiality. 
C) comparability. 
D) faithful representation.

Question 2

Stockholders' equity is divided into two parts: common stock and retained earnings.

Accepted Answer

A) True 
 B)False

Question 3

Long-term investments appear in the property, plant, and equipment section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

Kwantum Corporation has total assets of $3,600,000, common stock of $936,000, and retained earnings of $570,000 at December 31, 2022.What are the creditors' claims on their assets at that date?

Accepted Answer

A) $3,234,000 
B) $1,506,000 
C) $2,094,000 
D) $3,966,000 
A) $3,234,000 
B) $1,506,000 
C) $2,094,000 
D) $3,966,000

Question 5

Liabilities are generally classified on a balance sheet as

Accepted Answer

A) small liabilities and large liabilities. 
B) present liabilities and future liabilities. 
C) tangible liabilities and intangible liabilities. 
D) current liabilities and long-term liabilities. 
A) small liabilities and large liabilities. 
B) present liabilities and future liabilities. 
C) tangible liabilities and intangible liabilities. 
D) current liabilities and long-term liabilities.

Question 6

A company can change to a new method of accounting if management can justify that the new method results in

Accepted Answer

A) more meaningful financial information. 
B) a higher net income. 
C) a lower net income for tax purposes. 
D) less likelihood of clerical errors. 
A) more meaningful financial information. 
B) a higher net income. 
C) a lower net income for tax purposes. 
D) less likelihood of clerical errors.

Question 7

It is possible for an asset to be a current asset even though the expected conversion of that asset into cash is to be longer than one year or the normal operating cycle.

Accepted Answer

A) True 
 B)False

Question 8

The periodicity assumption states

Accepted Answer

A) the business will remain in operation for the foreseeable future. 
B) the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared. 
C) every economic entity can be separately identified and accounted for. 
D) only those things that can be expressed in money are included in the accounting records. 
A) the business will remain in operation for the foreseeable future. 
B) the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared. 
C) every economic entity can be separately identified and accounted for. 
D) only those things that can be expressed in money are included in the accounting records.

Question 9

Use the following data to determine the total amount of working capital.

Accepted Answer

A) $260,000 
B) $240,000 
C) $160,000 
D) $420,000 
A) $260,000 
B) $240,000 
C) $160,000 
D) $420,000

Question 10

Relevance and cost are two constraints in accounting.

Accepted Answer

A) True 
 B)False

Question 11

Information that is presented in a clear fashion, so that users of that information can interpret it, is an example of

Accepted Answer

A) relevance. 
B) faithful representation. 
C) understandability. 
D) comparability. 
A) relevance. 
B) faithful representation. 
C) understandability. 
D) comparability.

Question 12

Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting period.

Accepted Answer

A) True 
 B)False

Question 13

The periodicity assumption states that the economic life of a business can be divided into

Accepted Answer

A) equal time periods. 
B) cyclical time periods. 
C) artificial time periods. 
D) perpetual time periods. 
A) equal time periods. 
B) cyclical time periods. 
C) artificial time periods. 
D) perpetual time periods.

Question 14

The cost constraint weighs the cost that companies incur to provide a type of information against its benefit to financial statement users.

Accepted Answer

A) True 
 B)False

Question 15

The accounting concept that indicates assets should be reported at the price that would be received to sell an asset is the

Accepted Answer

A) economic entity assumption. 
B) monetary unit assumption. 
C) fair value principle. 
D) historical cost principle. 
A) economic entity assumption. 
B) monetary unit assumption. 
C) fair value principle. 
D) historical cost principle.

Question 16

The monetary unit assumption has led to an increase in the notes to financial statements.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is not true?

Accepted Answer

A) Comparability means using the same accounting principles from year to year within a company. 
B) Faithful representation is the quality of information that gives assurance that it is free of error. 
C) Relevant accounting information must be capable of making a difference in the decision. 
D) The primary objective of financial reporting is to provide financial information that is useful to investors and creditors for making decisions. 
A) Comparability means using the same accounting principles from year to year within a company. 
B) Faithful representation is the quality of information that gives assurance that it is free of error. 
C) Relevant accounting information must be capable of making a difference in the decision. 
D) The primary objective of financial reporting is to provide financial information that is useful to investors and creditors for making decisions.

Question 18

Relevant accounting information

Accepted Answer

A) is information that has been audited. 
B) must be reported within the operating cycle or one year, whichever is longer. 
C) has been objectively determined. 
D) is information that is capable of making a difference in a business decision. 
A) is information that has been audited. 
B) must be reported within the operating cycle or one year, whichever is longer. 
C) has been objectively determined. 
D) is information that is capable of making a difference in a business decision.

Question 19

Using the following balance sheet and income statement data, what is the total amount of working capital?   Average common shares outstanding was 15,000.

Accepted Answer

A) $7,000 
B) $5,000 
C) $9,000 
D) $2,000 
A) $7,000 
B) $5,000 
C) $9,000 
D) $2,000

Question 20

Using the following balance sheet and income statement data, what is the current ratio?   Average common shares outstanding was 15,000.

Accepted Answer

A) 2.0: 1 
B) 2.6: 1 
C) 0.5: 1 
D) 2.9: 1 
A) 2.0: 1 
B) 2.6: 1 
C) 0.5: 1 
D) 2.9: 1

The quality of consistency is a type of

Stockholders' equity is divided into two parts: common stock and retained earnings.

Long-term investments appear in the property, plant, and equipment section of the balance sheet.

Kwantum Corporation has total assets of $3,600,000, common stock of $936,000, and retained earnings of $570,000 at December 31, 2022.What are the creditors' claims on their assets at that date?

Liabilities are generally classified on a balance sheet as

A company can change to a new method of accounting if management can justify that the new method results in

It is possible for an asset to be a current asset even though the expected conversion of that asset into cash is to be longer than one year or the normal operating cycle.

The periodicity assumption states

Use the following data to determine the total amount of working capital.

Relevance and cost are two constraints in accounting.

Information that is presented in a clear fashion, so that users of that information can interpret it, is an example of

Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting period.

The periodicity assumption states that the economic life of a business can be divided into

The cost constraint weighs the cost that companies incur to provide a type of information against its benefit to financial statement users.

The accounting concept that indicates assets should be reported at the price that would be received to sell an asset is the

The monetary unit assumption has led to an increase in the notes to financial statements.

Which of the following statements is not true?

Relevant accounting information

Using the following balance sheet and income statement data, what is the total amount of working capital? Average common shares outstanding was 15,000.

Using the following balance sheet and income statement data, what is the current ratio? Average common shares outstanding was 15,000.

Introduction to 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

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters

Exam 2: A Further Look at Financial Statements

The quality of consistency is a type of

Stockholders' equity is divided into two parts: common stock and retained earnings.

Long-term investments appear in the property, plant, and equipment section of the balance sheet.

Kwantum Corporation has total assets of $3,600,000, common stock of $936,000, and retained earnings of $570,000 at December 31, 2022.What are the creditors' claims on their assets at that date?

Liabilities are generally classified on a balance sheet as

A company can change to a new method of accounting if management can justify that the new method results in

It is possible for an asset to be a current asset even though the expected conversion of that asset into cash is to be longer than one year or the normal operating cycle.

The periodicity assumption states

Use the following data to determine the total amount of working capital.

Relevance and cost are two constraints in accounting.

Information that is presented in a clear fashion, so that users of that information can interpret it, is an example of

Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting period.

The periodicity assumption states that the economic life of a business can be divided into

The cost constraint weighs the cost that companies incur to provide a type of information against its benefit to financial statement users.

The accounting concept that indicates assets should be reported at the price that would be received to sell an asset is the

The monetary unit assumption has led to an increase in the notes to financial statements.

Which of the following statements is not true?

Relevant accounting information

Using the following balance sheet and income statement data, what is the total amount of working capital? Average common shares outstanding was 15,000.

Using the following balance sheet and income statement data, what is the current ratio? Average common shares outstanding was 15,000.

Introduction to 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

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters