Question 1

Benedict Company compiled the following financial information as of December 31, 2022:   Benedict's total assets at December 31, 2022 are

Accepted Answer

A) $1,880,000. 
B) $1,360,000. 
C) $640,000. 
D) $760,000. 
A) $1,880,000. 
B) $1,360,000. 
C) $640,000. 
D) $760,000.

Question 2

Which of the following statements concerning users of accounting information is incorrect?

Accepted Answer

A) Management is considered an internal user. 
B) Present creditors are considered external users. 
C) Regulatory authorities are considered internal users. 
D) Taxing authorities are considered external users. 
A) Management is considered an internal user. 
B) Present creditors are considered external users. 
C) Regulatory authorities are considered internal users. 
D) Taxing authorities are considered external users.

Question 3

Which of the following groups uses accounting information to determine whether a marketing proposal will be cost effective?

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

Question 4

Lankston Company began the year by issuing $120,000 of common stock for cash.The company recorded revenues of $1,100,000, expenses of $960,000, and paid dividends of $60,000.What was Lankston's net income for the year?

Accepted Answer

A) $80,000 
B) $200,000 
C) $140,000 
D) $260,000 
A) $80,000 
B) $200,000 
C) $140,000 
D) $260,000

Question 5

Retained earnings is

Accepted Answer

A) the stockholders' claim on total assets. 
B) equal to cash. 
C) equal to revenues. 
D) the amount of net income kept in the corporation for future use. 
A) the stockholders' claim on total assets. 
B) equal to cash. 
C) equal to revenues. 
D) the amount of net income kept in the corporation for future use.

Question 6

If total liabilities increased by $69,000 during a period of time and stockholders' equity decreased by $27,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n)

Accepted Answer

A) $69,000 increase. 
B) $96,000 increase. 
C) $42,000 decrease. 
D) $42,000 increase. 
A) $69,000 increase. 
B) $96,000 increase. 
C) $42,000 decrease. 
D) $42,000 increase.

Question 7

Which of the following activities involves collecting the necessary funds to support the business?

Accepted Answer

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

Question 8

External users of accounting information are managers who plan, organize, and run a business.

Accepted Answer

A) True 
 B)False

Question 9

In a study session, a classmate makes this statement "Dividends are listed as expenses on the income statement." What is your best response to this statement?

Accepted Answer

A) I've been struggling with that concept and I feel that dividends should be shown on the balance sheet as assets. 
B) You are right.Revenues and expenses are shown on the income statement.Dividends are a cost of generating revenues and that makes them an expense.Why else would a corporation pay dividends? 
C) Dividends represent a portion of corporate profits paid to the shareholders.They belong on the retained earnings statement. 
D) Dividends are deducted from retained earnings on the balance sheet. 
A) I've been struggling with that concept and I feel that dividends should be shown on the balance sheet as assets. 
B) You are right.Revenues and expenses are shown on the income statement.Dividends are a cost of generating revenues and that makes them an expense.Why else would a corporation pay dividends? 
C) Dividends represent a portion of corporate profits paid to the shareholders.They belong on the retained earnings statement. 
D) Dividends are deducted from retained earnings on the balance sheet.

Question 10

Ashley's Accessory Shop started the month of June 2022 with total assets of $210,000 and total liabilities of $120,000.During June, the business recorded $330,000 in revenues, $165,000 in expenses, and dividends of $60,000.Stockholders' equity at the end of June was

Accepted Answer

A) $180,000. 
B) $165,000. 
C) $195,000. 
D) $105,000. 
A) $180,000. 
B) $165,000. 
C) $195,000. 
D) $105,000.

Question 11

Information in the notes to the financial statements has to be quantifiable (numeric).

Accepted Answer

A) True 
 B)False

Question 12

A different set of financial statements is usually prepared for each user.

Accepted Answer

A) True 
 B)False

Question 13

A company's total liabilities decreased by $105,000 and its stockholders' equity decreased by $35,000 during a period of time.By what amount and in what direction must the company's total assets have changed during that same period?

Accepted Answer

A) $140,000 increase 
B) $70,000 decrease 
C) $140,000 decrease 
D) -$70,000 decrease 
A) $140,000 increase 
B) $70,000 decrease 
C) $140,000 decrease 
D) -$70,000 decrease

Question 14

Finney Company began the year with retained earnings of $100,000.During 2022, the company issued $80,000 of common stock for cash.The company recorded revenues of $740,000, expenses of $640,000, and paid dividends of $40,000.What was Finney's net income for the year 2022?

Accepted Answer

A) $60,000 
B) $140,000 
C) $100,000 
D) $180,000 
A) $60,000 
B) $140,000 
C) $100,000 
D) $180,000

Question 15

Stockholders' equity can be described as claims of

Accepted Answer

A) creditors on total assets. 
B) owners on total assets. 
C) customers on total assets. 
D) debtors on total assets. 
A) creditors on total assets. 
B) owners on total assets. 
C) customers on total assets. 
D) debtors on total assets.

Question 16

The primary purpose of the statement of cash flows is to report

Accepted Answer

A) a company's investing transactions. 
B) a company's financing transactions. 
C) information about cash receipts and cash payments of a company. 
D) the net increase or decrease in cash. 
A) a company's investing transactions. 
B) a company's financing transactions. 
C) information about cash receipts and cash payments of a company. 
D) the net increase or decrease in cash.

Question 17

The economic resources owned by a business are called stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 18

A local retail shop has been operating as a sole proprietorship.The business is growing and now the owner wants to incorporate.Which of the following is not a reason for this owner to incorporate?

Accepted Answer

A) Ability to raise capital for expansion 
B) Desire to limit the owner's personal liability 
C) The prestige of operating as a corporation 
D) The ease in transferring shares of the corporation's stock 
A) Ability to raise capital for expansion 
B) Desire to limit the owner's personal liability 
C) The prestige of operating as a corporation 
D) The ease in transferring shares of the corporation's stock

Question 19

Owners of business firms are the only people who need accounting information.

Accepted Answer

A) True 
 B)False

Question 20

A business organized as a separate legal entity is a

Accepted Answer

A) corporation. 
B) proprietor. 
C) government unit. 
D) partnership. 
A) corporation. 
B) proprietor. 
C) government unit. 
D) partnership.

Benedict Company compiled the following financial information as of December 31, 2022: Benedict's total assets at December 31, 2022 are

Which of the following statements concerning users of accounting information is incorrect?

Which of the following groups uses accounting information to determine whether a marketing proposal will be cost effective?

Lankston Company began the year by issuing $120,000 of common stock for cash.The company recorded revenues of $1,100,000, expenses of $960,000, and paid dividends of $60,000.What was Lankston's net income for the year?

Retained earnings is

If total liabilities increased by $69,000 during a period of time and stockholders' equity decreased by $27,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n)

Which of the following activities involves collecting the necessary funds to support the business?

External users of accounting information are managers who plan, organize, and run a business.

In a study session, a classmate makes this statement "Dividends are listed as expenses on the income statement." What is your best response to this statement?

Ashley's Accessory Shop started the month of June 2022 with total assets of $210,000 and total liabilities of $120,000.During June, the business recorded $330,000 in revenues, $165,000 in expenses, and dividends of $60,000.Stockholders' equity at the end of June was

Information in the notes to the financial statements has to be quantifiable (numeric).

A different set of financial statements is usually prepared for each user.

A company's total liabilities decreased by $105,000 and its stockholders' equity decreased by $35,000 during a period of time.By what amount and in what direction must the company's total assets have changed during that same period?

Finney Company began the year with retained earnings of $100,000.During 2022, the company issued $80,000 of common stock for cash.The company recorded revenues of $740,000, expenses of $640,000, and paid dividends of $40,000.What was Finney's net income for the year 2022?

Stockholders' equity can be described as claims of

The primary purpose of the statement of cash flows is to report

The economic resources owned by a business are called stockholders' equity.

A local retail shop has been operating as a sole proprietorship.The business is growing and now the owner wants to incorporate.Which of the following is not a reason for this owner to incorporate?

Owners of business firms are the only people who need accounting information.

A business organized as a separate legal entity is a

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

Benedict Company compiled the following financial information as of December 31, 2022: Benedict's total assets at December 31, 2022 are

Which of the following statements concerning users of accounting information is incorrect?

Which of the following groups uses accounting information to determine whether a marketing proposal will be cost effective?

Lankston Company began the year by issuing $120,000 of common stock for cash.The company recorded revenues of $1,100,000, expenses of $960,000, and paid dividends of $60,000.What was Lankston's net income for the year?

Retained earnings is

If total liabilities increased by $69,000 during a period of time and stockholders' equity decreased by $27,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n)

Which of the following activities involves collecting the necessary funds to support the business?

External users of accounting information are managers who plan, organize, and run a business.

In a study session, a classmate makes this statement "Dividends are listed as expenses on the income statement." What is your best response to this statement?

Ashley's Accessory Shop started the month of June 2022 with total assets of $210,000 and total liabilities of $120,000.During June, the business recorded $330,000 in revenues, $165,000 in expenses, and dividends of $60,000.Stockholders' equity at the end of June was

Information in the notes to the financial statements has to be quantifiable (numeric).

A different set of financial statements is usually prepared for each user.

A company's total liabilities decreased by $105,000 and its stockholders' equity decreased by $35,000 during a period of time.By what amount and in what direction must the company's total assets have changed during that same period?

Finney Company began the year with retained earnings of $100,000.During 2022, the company issued $80,000 of common stock for cash.The company recorded revenues of $740,000, expenses of $640,000, and paid dividends of $40,000.What was Finney's net income for the year 2022?

Stockholders' equity can be described as claims of

The primary purpose of the statement of cash flows is to report

The economic resources owned by a business are called stockholders' equity.

A local retail shop has been operating as a sole proprietorship.The business is growing and now the owner wants to incorporate.Which of the following is not a reason for this owner to incorporate?

Owners of business firms are the only people who need accounting information.

A business organized as a separate legal entity is a

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

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