Question 1

When expenses exceed revenues, which of the following is true?

Accepted Answer

A) a net loss results 
B) a net income results 
C) assets equal liabilities 
D) assets are increased 
A) a net loss results 
B) a net income results 
C) assets equal liabilities 
D) assets are increased

Question 2

Which of the following statements is true?

Accepted Answer

A) Amounts received from issuing stock are revenues. 
B) Amounts paid out as dividends are not expenses. 
C) Amounts paid out as dividends are reported on the income statement. 
D) Amounts received from issued stock are reported on the income statement. 
A) Amounts received from issuing stock are revenues. 
B) Amounts paid out as dividends are not expenses. 
C) Amounts paid out as dividends are reported on the income statement. 
D) Amounts received from issued stock are reported on the income statement.

Question 3

Elston Company compiled the following financial information as of December 31, 2022:   Elston's retained earnings on December 31, 2022 are

Accepted Answer

A) $450,000. 
B) $540,000. 
C) $480,000. 
D) $ 30,000. 
A) $450,000. 
B) $540,000. 
C) $480,000. 
D) $ 30,000.

Question 4

A balance sheet shows

Accepted Answer

A) revenues, liabilities, and stockholders' equity. 
B) expenses, dividends, and stockholders' equity. 
C) revenues, expenses, and dividends. 
D) assets, liabilities, and stockholders' equity. 
A) revenues, liabilities, and stockholders' equity. 
B) expenses, dividends, and stockholders' equity. 
C) revenues, expenses, and dividends. 
D) assets, liabilities, and stockholders' equity.

Question 5

All of the following are advantages for choosing a proprietorship for a business except

Accepted Answer

A) a proprietorship is a simple form of business to set up. 
B) a proprietorship gives the owner control of the business. 
C) proprietorship receive more favorable tax treatment. 
D) transfer of ownership is easily achieved through stock sales. 
A) a proprietorship is a simple form of business to set up. 
B) a proprietorship gives the owner control of the business. 
C) proprietorship receive more favorable tax treatment. 
D) transfer of ownership is easily achieved through stock sales.

Question 6

The statement of cash flows would disclose the payment of a dividend

Accepted Answer

A) nowhere on the statement. 
B) in the operating activities section. 
C) in the investing activities section. 
D) in the financing activities section. 
A) nowhere on the statement. 
B) in the operating activities section. 
C) in the investing activities section. 
D) in the financing activities section.

Question 7

Why are financial statement users interested in the statement of cash flows?

Accepted Answer

A) It is the easiest financial statement to evaluate. 
B) It provides information about an important company resource. 
C) It is the first statement that is presented to users. 
D) It helps users decide whether assets such as office equipment should be replaced. 
A) It is the easiest financial statement to evaluate. 
B) It provides information about an important company resource. 
C) It is the first statement that is presented to users. 
D) It helps users decide whether assets such as office equipment should be replaced.

Question 8

During September 2022, Blowing Rock Diner's total liabilities decreased by $75,000 and its stockholders' equity increased by $15,000.The company's total assets must change by what amount and in what direction during that same period?

Accepted Answer

A) $60,000 decrease 
B) $60,000 increase 
C) $75,000 increase 
D) $90,000 increase 
A) $60,000 decrease 
B) $60,000 increase 
C) $75,000 increase 
D) $90,000 increase

Question 9

Investing activities involve collecting the necessary funds to support the business.

Accepted Answer

A) True 
 B)False

Question 10

The retained earnings statement would not show

Accepted Answer

A) the retained earnings beginning balance. 
B) revenues and expenses. 
C) dividends. 
D) the ending retained earning balance. 
A) the retained earnings beginning balance. 
B) revenues and expenses. 
C) dividends. 
D) the ending retained earning balance.

Question 11

All publicly traded U.S.companies must provide their stockholders with an annual report each year.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following set of characteristics describes a corporation?

Accepted Answer

A) Shared control, tax advantages, increased skills and resources 
B) Simple to set up and maintains control with founder 
C) Easier to transfer ownership and raise funds, no personal liability 
D) Harder to raise funds and gives owner control 
A) Shared control, tax advantages, increased skills and resources 
B) Simple to set up and maintains control with founder 
C) Easier to transfer ownership and raise funds, no personal liability 
D) Harder to raise funds and gives owner control

Question 13

Based on the following data, what are total assets? .

Accepted Answer

A) $822,000 
B) $766,000 
C) $758,000 
D) $708,000 
A) $822,000 
B) $766,000 
C) $758,000 
D) $708,000

Question 14

Gibson Company recorded the following cash transactions for the year: Paid $180,000 for salaries.
Paid $80,000 to purchase office equipment.
Paid $20,000 for utilities.
Paid $8,000 in dividends.
Collected $350,000 from customers.
What was Gibson's net cash provided by operating activities?

Accepted Answer

A) $150,000 
B) $70,000 
C) $170,000 
D) $142,000 
A) $150,000 
B) $70,000 
C) $170,000 
D) $142,000

Question 15

Payments to stockholders are called

Accepted Answer

A) expenses. 
B) liabilities. 
C) dividends. 
D) assets. 
A) expenses. 
B) liabilities. 
C) dividends. 
D) assets.

Question 16

If the retained earnings account decreases from the beginning of the year to the end of the year, then

Accepted Answer

A) net income is less than dividends. 
B) there was a net income and no dividends. 
C) additional investments are less than net losses. 
D) net income is greater than dividends. 
A) net income is less than dividends. 
B) there was a net income and no dividends. 
C) additional investments are less than net losses. 
D) net income is greater than dividends.

Question 17

Management of a business enterprise is the major external user of accounting information.

Accepted Answer

A) True 
 B)False

Question 18

Henson Company began the year with retained earnings of $380,000.During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000.What was Henson's retained earnings balance at the end of the year?

Accepted Answer

A) $540,000 
B) $460,000 
C) $840,000 
D) $500,000 
A) $540,000 
B) $460,000 
C) $840,000 
D) $500,000

Question 19

External users want answers to all of the following questions except:

Accepted Answer

A) Is the company earning satisfactory income? 
B) Will the company be able to pay its debts as they come due? 
C) Will the company be able to afford employee pay raises this year? 
D) How does the company compare in profitability with competitors? 
A) Is the company earning satisfactory income? 
B) Will the company be able to pay its debts as they come due? 
C) Will the company be able to afford employee pay raises this year? 
D) How does the company compare in profitability with competitors?

Question 20

Silva Corporation had the following accounts and balances:   If Silva paid $10,000 of Accounts Payable in cash, total liabilities and stockholders' equity would be

Accepted Answer

A) $90,000. 
B) $78,000. 
C) $80,000. 
D) $120,000. 
A) $90,000. 
B) $78,000. 
C) $80,000. 
D) $120,000.

When expenses exceed revenues, which of the following is true?

Which of the following statements is true?

Elston Company compiled the following financial information as of December 31, 2022: Elston's retained earnings on December 31, 2022 are

A balance sheet shows

All of the following are advantages for choosing a proprietorship for a business except

The statement of cash flows would disclose the payment of a dividend

Why are financial statement users interested in the statement of cash flows?

During September 2022, Blowing Rock Diner's total liabilities decreased by $75,000 and its stockholders' equity increased by $15,000.The company's total assets must change by what amount and in what direction during that same period?

Investing activities involve collecting the necessary funds to support the business.

The retained earnings statement would not show

All publicly traded U.S.companies must provide their stockholders with an annual report each year.

Which of the following set of characteristics describes a corporation?

Based on the following data, what are total assets? .

Gibson Company recorded the following cash transactions for the year: Paid $180,000 for salaries. Paid $80,000 to purchase office equipment. Paid $20,000 for utilities. Paid $8,000 in dividends. Collected $350,000 from customers. What was Gibson's net cash provided by operating activities?

Payments to stockholders are called

If the retained earnings account decreases from the beginning of the year to the end of the year, then

Management of a business enterprise is the major external user of accounting information.

Henson Company began the year with retained earnings of $380,000.During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000.What was Henson's retained earnings balance at the end of the year?

External users want answers to all of the following questions except:

Silva Corporation had the following accounts and balances: If Silva paid $10,000 of Accounts Payable in cash, total liabilities and stockholders' equity would be

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

When expenses exceed revenues, which of the following is true?

Which of the following statements is true?

Elston Company compiled the following financial information as of December 31, 2022: Elston's retained earnings on December 31, 2022 are

A balance sheet shows

All of the following are advantages for choosing a proprietorship for a business except

The statement of cash flows would disclose the payment of a dividend

Why are financial statement users interested in the statement of cash flows?

During September 2022, Blowing Rock Diner's total liabilities decreased by $75,000 and its stockholders' equity increased by $15,000.The company's total assets must change by what amount and in what direction during that same period?

Investing activities involve collecting the necessary funds to support the business.

The retained earnings statement would not show

All publicly traded U.S.companies must provide their stockholders with an annual report each year.

Which of the following set of characteristics describes a corporation?

Based on the following data, what are total assets? .

Gibson Company recorded the following cash transactions for the year: Paid $180,000 for salaries. Paid $80,000 to purchase office equipment. Paid $20,000 for utilities. Paid $8,000 in dividends. Collected $350,000 from customers. What was Gibson's net cash provided by operating activities?

Payments to stockholders are called

If the retained earnings account decreases from the beginning of the year to the end of the year, then

Management of a business enterprise is the major external user of accounting information.

Henson Company began the year with retained earnings of $380,000.During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000.What was Henson's retained earnings balance at the end of the year?

External users want answers to all of the following questions except:

Silva Corporation had the following accounts and balances: If Silva paid $10,000 of Accounts Payable in cash, total liabilities and stockholders' equity would be

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