Question 1

Which of the following external groups uses accounting information to determine whether the company can pay its obligations?

Accepted Answer

A) Investors in common stock 
B) Marketing managers 
C) Creditors 
D) Chief Financial Officer 
A) Investors in common stock 
B) Marketing managers 
C) Creditors 
D) Chief Financial Officer C

Question 2

Proprietorships in the United States generate more revenue than the other two forms of business enterprise.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following financial statements is concerned with the company at a point in time?

Accepted Answer

A) Balance sheet 
B) Income statement 
C) Retained earnings statement 
D) Statement of cash flows 
A) Balance sheet 
B) Income statement 
C) Retained earnings statement 
D) Statement of cash flows A

Question 4

Which of the following is not a step for solving an ethical dilemma?

Accepted Answer

A) Identify the alternatives and weigh the impact of each alternative on various stakeholders. 
B) Certify the ethical accuracy of the financial information. 
C) Identify and analyze the principal elements in the situation. 
D) Recognize the ethical situation and issues involved. 
A) Identify the alternatives and weigh the impact of each alternative on various stakeholders. 
B) Certify the ethical accuracy of the financial information. 
C) Identify and analyze the principal elements in the situation. 
D) Recognize the ethical situation and issues involved.

Question 5

Issuing shares of stock in exchange for cash is an example of a(n)

Accepted Answer

A) delivering activity. 
B) investing activity. 
C) financing activity. 
D) operating activity. 
A) delivering activity. 
B) investing activity. 
C) financing activity. 
D) operating activity.

Question 6

Pinson Company began the year 2022 with retained earnings of $670,000.During the year, the company sold additional shares of stock for $1,000,000, recorded revenues of $600,000, expenses of $380,000, and paid dividends of $140,000.What was Pinson's retained earnings balance at the end of 2022?

Accepted Answer

A) $1,030,000 
B) $750,000 
C) $1,130,000 
D) $600,000 
A) $1,030,000 
B) $750,000 
C) $1,130,000 
D) $600,000

Question 7

The information needed to determine whether a company is using accounting methods similar to those of its competitors is found in the

Accepted Answer

A) auditor's report. 
B) balance sheet. 
C) management discussion and analysis section. 
D) notes to the financial statements. 
A) auditor's report. 
B) balance sheet. 
C) management discussion and analysis section. 
D) notes to the financial statements.

Question 8

Which of the following is a user of accounting information with an indirect financial interest in a business?

Accepted Answer

A) A financial adviser 
B) Management 
C) Investor 
D) Creditor 
A) A financial adviser 
B) Management 
C) Investor 
D) Creditor

Question 9

Buying assets needed to operate a business is an example of a(n)

Accepted Answer

A) delivering activity. 
B) financing activity. 
C) investing activity. 
D) operating activity. 
A) delivering activity. 
B) financing activity. 
C) investing activity. 
D) operating activity.

Question 10

Net income is another term for revenue.

Accepted Answer

A) True 
 B)False

Question 11

Assets are resources owned by a business and provide future services or benefits to the business.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a satisfactory statement of the accounting equation?

Accepted Answer

A) Assets = Stockholders' Equity - Liabilities 
B) Assets = Liabilities + Stockholders' Equity 
C) Assets - Liabilities = Stockholders' Equity 
D) Assets - Stockholders' Equity = Liabilities 
A) Assets = Stockholders' Equity - Liabilities 
B) Assets = Liabilities + Stockholders' Equity 
C) Assets - Liabilities = Stockholders' Equity 
D) Assets - Stockholders' Equity = Liabilities

Question 13

Benedict Company compiled the following financial information as of December 31, 2022:   Benedict's total stockholders' equity at December 31, 2022 is

Accepted Answer

A) $840,000. 
B) $880,000. 
C) $640,000. 
D) $960,000. 
A) $840,000. 
B) $880,000. 
C) $640,000. 
D) $960,000.

Question 14

Which financial statement would best indicate whether the company relies on debt or stockholders' equity to finance its assets?

Accepted Answer

A) Statement of cash flows 
B) Retained earnings statement 
C) Income statement 
D) Balance sheet 
A) Statement of cash flows 
B) Retained earnings statement 
C) Income statement 
D) Balance sheet

Question 15

Which activities involve putting the resources of the business into action to generate a profit?

Accepted Answer

A) Delivering 
B) Financing 
C) Investing 
D) Operating 
A) Delivering 
B) Financing 
C) Investing 
D) Operating

Question 16

Notes to the financial statements include all of the following except

Accepted Answer

A) descriptions of significant accounting policies used. 
B) explanations of uncertainties. 
C) projected accounting information. 
D) statistics needed to understand the statements. 
A) descriptions of significant accounting policies used. 
B) explanations of uncertainties. 
C) projected accounting information. 
D) statistics needed to understand the statements.

Question 17

Resources owned by a business are referred to as

Accepted Answer

A) stockholders' equity. 
B) liabilities. 
C) assets. 
D) revenues. 
A) stockholders' equity. 
B) liabilities. 
C) assets. 
D) revenues.

Question 18

If the assets owned by a business total $100,000 and liabilities total $65,000, then stockholders' equity totals $25,000.

Accepted Answer

A) True 
 B)False

Question 19

Creditors' rights to assets supersede owners' rights to the assets.

Accepted Answer

A) True 
 B)False

Question 20

A business organized as a corporation

Accepted Answer

A) is not a separate legal entity in most states. 
B) requires that stockholders be personally liable for the debts of the business. 
C) is owned by its stockholders. 
D) has tax advantages over a proprietorship or partnership. 
A) is not a separate legal entity in most states. 
B) requires that stockholders be personally liable for the debts of the business. 
C) is owned by its stockholders. 
D) has tax advantages over a proprietorship or partnership.

Which of the following external groups uses accounting information to determine whether the company can pay its obligations?

Proprietorships in the United States generate more revenue than the other two forms of business enterprise.

Which of the following financial statements is concerned with the company at a point in time?

Which of the following is not a step for solving an ethical dilemma?

Issuing shares of stock in exchange for cash is an example of a(n)

Pinson Company began the year 2022 with retained earnings of $670,000.During the year, the company sold additional shares of stock for $1,000,000, recorded revenues of $600,000, expenses of $380,000, and paid dividends of $140,000.What was Pinson's retained earnings balance at the end of 2022?

The information needed to determine whether a company is using accounting methods similar to those of its competitors is found in the

Which of the following is a user of accounting information with an indirect financial interest in a business?

Buying assets needed to operate a business is an example of a(n)

Net income is another term for revenue.

Assets are resources owned by a business and provide future services or benefits to the business.

Which of the following is not a satisfactory statement of the accounting equation?

Benedict Company compiled the following financial information as of December 31, 2022: Benedict's total stockholders' equity at December 31, 2022 is

Which financial statement would best indicate whether the company relies on debt or stockholders' equity to finance its assets?

Which activities involve putting the resources of the business into action to generate a profit?

Notes to the financial statements include all of the following except

Resources owned by a business are referred to as

If the assets owned by a business total $100,000 and liabilities total $65,000, then stockholders' equity totals $25,000.

Creditors' rights to assets supersede owners' rights to the assets.

A business organized as a corporation

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

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters

Exam 1: Introduction to Financial Statements

Which of the following external groups uses accounting information to determine whether the company can pay its obligations?

Proprietorships in the United States generate more revenue than the other two forms of business enterprise.

Which of the following financial statements is concerned with the company at a point in time?

Which of the following is not a step for solving an ethical dilemma?

Issuing shares of stock in exchange for cash is an example of a(n)

Pinson Company began the year 2022 with retained earnings of $670,000.During the year, the company sold additional shares of stock for $1,000,000, recorded revenues of $600,000, expenses of $380,000, and paid dividends of $140,000.What was Pinson's retained earnings balance at the end of 2022?

The information needed to determine whether a company is using accounting methods similar to those of its competitors is found in the

Which of the following is a user of accounting information with an indirect financial interest in a business?

Buying assets needed to operate a business is an example of a(n)

Net income is another term for revenue.

Assets are resources owned by a business and provide future services or benefits to the business.

Which of the following is not a satisfactory statement of the accounting equation?

Benedict Company compiled the following financial information as of December 31, 2022: Benedict's total stockholders' equity at December 31, 2022 is

Which financial statement would best indicate whether the company relies on debt or stockholders' equity to finance its assets?

Which activities involve putting the resources of the business into action to generate a profit?

Notes to the financial statements include all of the following except

Resources owned by a business are referred to as

If the assets owned by a business total $100,000 and liabilities total $65,000, then stockholders' equity totals $25,000.

Creditors' rights to assets supersede owners' rights to the assets.

A business organized as a corporation

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

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters