Question 1

Liabilities of a company are owed to its

Accepted Answer

A) debtors. 
B) owners. 
C) creditors. 
D) stockholders. 
A) debtors. 
B) owners. 
C) creditors. 
D) stockholders.

Question 2

Which one of the following questions is most likely asked by an internal human resources director for the company?

Accepted Answer

A) Which product line is most profitable? 
B) What price for our product will maximize the company income? 
C) What average pay raise is affordable for employees this year? 
D) Should any product lines be eliminated? 
A) Which product line is most profitable? 
B) What price for our product will maximize the company income? 
C) What average pay raise is affordable for employees this year? 
D) Should any product lines be eliminated?

Question 3

Dividends are reported on the

Accepted Answer

A) income statement. 
B) retained earnings statement. 
C) balance sheet. 
D) income statement and balance sheet. 
A) income statement. 
B) retained earnings statement. 
C) balance sheet. 
D) income statement and balance sheet.

Question 4

Jimmy's Repair Shop started the year with total assets of $300,000 and total liabilities of $240,000.During the year, the business recorded $630,000 in revenues, $330,000 in expenses, and dividends of $60,000.The net income reported by Jimmy's Repair Shop for the year was

Accepted Answer

A) $240,000. 
B) $300,000. 
C) $180,000. 
D) $570,000. 
A) $240,000. 
B) $300,000. 
C) $180,000. 
D) $570,000.

Question 5

Which of the following is the best definition of an internal user of accounting information?

Accepted Answer

A) Investors who use accounting information to decide whether to buy or sell stock 
B) Creditors, such as banks, that use accounting information to evaluate the risk of lending money 
C) Labor unions who use accounting information to examine the ability of the company to pay increased wages and benefits 
D) Managers who use accounting information to plan, organize, and run a business 
A) Investors who use accounting information to decide whether to buy or sell stock 
B) Creditors, such as banks, that use accounting information to evaluate the risk of lending money 
C) Labor unions who use accounting information to examine the ability of the company to pay increased wages and benefits 
D) Managers who use accounting information to plan, organize, and run a business

Question 6

The company's policy toward dividends and growth could best be determined by examining the

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.

Question 7

The basic accounting equation states that Assets = Liabilities.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not an advantage of the corporate form of business organization?

Accepted Answer

A) No personal liability 
B) Easy to transfer ownership 
C) Favorable tax treatment 
D) Easy to raise funds 
A) No personal liability 
B) Easy to transfer ownership 
C) Favorable tax treatment 
D) Easy to raise funds

Question 9

External users of accounting information, like the Internal Revenue Service, are most commonly known as

Accepted Answer

A) taxing authorities. 
B) labor unions. 
C) customers. 
D) regulatory agencies. 
A) taxing authorities. 
B) labor unions. 
C) customers. 
D) regulatory agencies.

Question 10

Management's views on the company's short-term debt paying ability, expansion financing, and results of operations are found in the

Accepted Answer

A) auditor's report. 
B) management discussion and analysis section. 
C) notes to the financial statements. 
D) president's state of the company report. 
A) auditor's report. 
B) management discussion and analysis section. 
C) notes to the financial statements. 
D) president's state of the company report.

Question 11

Stockholders' equity

Accepted Answer

A) is usually equal to cash on hand. 
B) is equal to liabilities and retained earnings. 
C) includes retained earnings and common stock. 
D) is shown on the income statement. 
A) is usually equal to cash on hand. 
B) is equal to liabilities and retained earnings. 
C) includes retained earnings and common stock. 
D) is shown on the income statement.

Question 12

Jackson Company recorded the following cash transactions for the year: Paid $135,000 for salaries.
Paid $60,000 to purchase office equipment.
Paid $15,000 for utilities.
Paid $6,000 in dividends.
Collected $275,000 from customers.
What was Jackson's net cash provided by operating activities?

Accepted Answer

A) $125,000 
B) $65,000 
C) $140,000 
D) $119,000 
A) $125,000 
B) $65,000 
C) $140,000 
D) $119,000

Question 13

Which of the following statements is not true regarding the Sarbanes-Oxley Act (SOX)?

Accepted Answer

A) The Act calls for increased oversight responsibilities for boards of directors. 
B) The Act has resulted in increased penalties for financial fraud by top management. 
C) The Act calls for decreased independence of outside auditors reviewing corporate financial statements. 
D) The goal of the Act is to decrease the likelihood of unethical corporate behavior. 
A) The Act calls for increased oversight responsibilities for boards of directors. 
B) The Act has resulted in increased penalties for financial fraud by top management. 
C) The Act calls for decreased independence of outside auditors reviewing corporate financial statements. 
D) The goal of the Act is to decrease the likelihood of unethical corporate behavior.

Question 14

Which of the following is the most appropriate definition of accounting?

Accepted Answer

A) The information system that identifies, records, and communicates the economic events of an organization to interested users. 
B) A means of collecting information. 
C) The interconnected network of subsystems necessary to operate a business. 
D) Electronic collection, organization, and communication of vast amounts of information. 
A) The information system that identifies, records, and communicates the economic events of an organization to interested users. 
B) A means of collecting information. 
C) The interconnected network of subsystems necessary to operate a business. 
D) Electronic collection, organization, and communication of vast amounts of information.

Question 15

The group of users of accounting information charged with achieving the goals of the business is its

Accepted Answer

A) auditors. 
B) investors. 
C) managers. 
D) creditors. 
A) auditors. 
B) investors. 
C) managers. 
D) creditors.

Question 16

Which of the following would not be considered an internal user of accounting data for a company?

Accepted Answer

A) The president of the company 
B) The controller of the company 
C) Creditor of the company 
D) Salesperson of the company 
A) The president of the company 
B) The controller of the company 
C) Creditor of the company 
D) Salesperson of the company

Question 17

The cost of assets consumed or services used is also known as

Accepted Answer

A) a revenue. 
B) an expense. 
C) a liability. 
D) an asset. 
A) a revenue. 
B) an expense. 
C) a liability. 
D) an asset.

Question 18

Debts and obligations of a business are referred to as

Accepted Answer

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

Question 19

Which of the following statements is true?

Accepted Answer

A) Publicly traded U.S.companies must provide an annual report to their shareholders when operating conditions change significantly. 
B) An unqualified independent auditor's report must be included in the annual report. 
C) Notes to the financial statements do not need to be included in the annual report because that information is only for internal users. 
D) None of these answer choices are correct. 
A) Publicly traded U.S.companies must provide an annual report to their shareholders when operating conditions change significantly. 
B) An unqualified independent auditor's report must be included in the annual report. 
C) Notes to the financial statements do not need to be included in the annual report because that information is only for internal users. 
D) None of these answer choices are correct.

Question 20

Gilkey Corporation began the year with retained earnings of $310,000.During the year, the company issued $420,000 of common stock, recorded expenses of $1,200,000, and paid dividends of $80,000.If Gilkey's ending retained earnings was $330,000, what was the company's revenue for the year?

Accepted Answer

A) $1,220,000 
B) $1,300,000 
C) $1,640,000 
D) $1,720,000 
A) $1,220,000 
B) $1,300,000 
C) $1,640,000 
D) $1,720,000

Liabilities of a company are owed to its

Which one of the following questions is most likely asked by an internal human resources director for the company?

Dividends are reported on the

Jimmy's Repair Shop started the year with total assets of $300,000 and total liabilities of $240,000.During the year, the business recorded $630,000 in revenues, $330,000 in expenses, and dividends of $60,000.The net income reported by Jimmy's Repair Shop for the year was

Which of the following is the best definition of an internal user of accounting information?

The company's policy toward dividends and growth could best be determined by examining the

The basic accounting equation states that Assets = Liabilities.

Which of the following is not an advantage of the corporate form of business organization?

External users of accounting information, like the Internal Revenue Service, are most commonly known as

Management's views on the company's short-term debt paying ability, expansion financing, and results of operations are found in the

Stockholders' equity

Jackson Company recorded the following cash transactions for the year: Paid $135,000 for salaries. Paid $60,000 to purchase office equipment. Paid $15,000 for utilities. Paid $6,000 in dividends. Collected $275,000 from customers. What was Jackson's net cash provided by operating activities?

Which of the following statements is not true regarding the Sarbanes-Oxley Act (SOX)?

Which of the following is the most appropriate definition of accounting?

The group of users of accounting information charged with achieving the goals of the business is its

Which of the following would not be considered an internal user of accounting data for a company?

The cost of assets consumed or services used is also known as

Debts and obligations of a business are referred to as

Which of the following statements is true?

Gilkey Corporation began the year with retained earnings of $310,000.During the year, the company issued $420,000 of common stock, recorded expenses of $1,200,000, and paid dividends of $80,000.If Gilkey's ending retained earnings was $330,000, what was the company's revenue for the year?

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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Exam 1: Introduction to Financial Statements

Liabilities of a company are owed to its

Which one of the following questions is most likely asked by an internal human resources director for the company?

Dividends are reported on the

Jimmy's Repair Shop started the year with total assets of $300,000 and total liabilities of $240,000.During the year, the business recorded $630,000 in revenues, $330,000 in expenses, and dividends of $60,000.The net income reported by Jimmy's Repair Shop for the year was

Which of the following is the best definition of an internal user of accounting information?

The company's policy toward dividends and growth could best be determined by examining the

The basic accounting equation states that Assets = Liabilities.

Which of the following is not an advantage of the corporate form of business organization?

External users of accounting information, like the Internal Revenue Service, are most commonly known as

Management's views on the company's short-term debt paying ability, expansion financing, and results of operations are found in the

Stockholders' equity

Jackson Company recorded the following cash transactions for the year: Paid $135,000 for salaries. Paid $60,000 to purchase office equipment. Paid $15,000 for utilities. Paid $6,000 in dividends. Collected $275,000 from customers. What was Jackson's net cash provided by operating activities?

Which of the following statements is not true regarding the Sarbanes-Oxley Act (SOX)?

Which of the following is the most appropriate definition of accounting?

The group of users of accounting information charged with achieving the goals of the business is its

Which of the following would not be considered an internal user of accounting data for a company?

The cost of assets consumed or services used is also known as

Debts and obligations of a business are referred to as

Which of the following statements is true?

Gilkey Corporation began the year with retained earnings of $310,000.During the year, the company issued $420,000 of common stock, recorded expenses of $1,200,000, and paid dividends of $80,000.If Gilkey's ending retained earnings was $330,000, what was the company's revenue for the year?

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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