Question 1

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

Accepted Answer

A)  historical cost principle. 
B)  fair value principle. 
C)  full disclosure principle. 
D)  consistency principle. 
A)  historical cost principle. 
B)  fair value principle. 
C)  full disclosure principle. 
D)  consistency principle.

Question 2

Using the following balance sheet and income statement data, what is the earnings per share?   Average common shares outstanding was 10,000.

Accepted Answer

A)  $3.90 
B)  $6.00 
C)  $2.10 
D)  $0.48 
A)  $3.90 
B)  $6.00 
C)  $2.10 
D)  $0.48

Question 3

The historical cost principle requires that when assets are acquired, they be recorded at

Accepted Answer

A)  market value. 
B)  the amount paid for them. 
C)  selling price. 
D)  list price. 
A)  market value. 
B)  the amount paid for them. 
C)  selling price. 
D)  list price.

Question 4

Free cash flow represents

Accepted Answer

A)  cash provided by operations less adjustments for capital expenditures and dividends. 
B)  a measurement of a company's cash generating ability. 
C)  a measure of solvency. 
D)  All of these answer choices are correct. 
A)  cash provided by operations less adjustments for capital expenditures and dividends. 
B)  a measurement of a company's cash generating ability. 
C)  a measure of solvency. 
D)  All of these answer choices are correct.

Question 5

Current assets divided by current liabilities is known as the

Accepted Answer

A)  working capital. 
B)  current ratio. 
C)  profit margin. 
D)  capital structure. 
A)  working capital. 
B)  current ratio. 
C)  profit margin. 
D)  capital structure.

Question 6

Reporting a net income of $95,000 will

Accepted Answer

A)  increase retained earnings. 
B)  decrease retained earnings. 
C)  increase common stock. 
D)  decrease common stock. 
A)  increase retained earnings. 
B)  decrease retained earnings. 
C)  increase common stock. 
D)  decrease common stock.

Question 7

Accounting information should be verifiable in order to enhance

Accepted Answer

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

Question 8

Generally accepted accounting principles are rules and practices that are recognized as a general guide for financial reporting purposes.

Accepted Answer

A) True 
 B)False

Question 9

The debt to assets ratio is a

Accepted Answer

A)  liquidity ratio. 
B)  profitability ratio. 
C)  solvency ratio. 
D)  None of the answer choices is correct. 
A)  liquidity ratio. 
B)  profitability ratio. 
C)  solvency ratio. 
D)  None of the answer choices is correct.

Question 10

Most companies that follow IFRS present balance sheet (statement of financial position) information in this order.

Accepted Answer

A)  current assets; investments; property; plant and equipment; intangible assets; current liabilities; long term liabilities; owners' equity. 
B)  intangible assets; property; plant and equipment; investments; current assets; current liabilities; owners' equity; long term liabilities. 
C)  current assets; noncurrent assets; current liabilities; noncurrent liabilities; equity. 
D)  noncurrent assets; current assets; equity; noncurrent liabilities; current liabilities. 
A)  current assets; investments; property; plant and equipment; intangible assets; current liabilities; long term liabilities; owners' equity. 
B)  intangible assets; property; plant and equipment; investments; current assets; current liabilities; owners' equity; long term liabilities. 
C)  current assets; noncurrent assets; current liabilities; noncurrent liabilities; equity. 
D)  noncurrent assets; current assets; equity; noncurrent liabilities; current liabilities.

Question 11

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 12

A liability is classified as a current liability if it is to be paid within the coming year.

Accepted Answer

A) True 
 B)False

Question 13

Issuing new shares of common stock will

Accepted Answer

A)  increase retained earnings. 
B)  decrease retained earnings. 
C)  increase common stock. 
D)  decrease common stock. 
A)  increase retained earnings. 
B)  decrease retained earnings. 
C)  increase common stock. 
D)  decrease common stock.

Question 14

It is assumed that the activities of Ford Motor company can be distinguished from those of General Motors because of the

Accepted Answer

A)  going concern assumption. 
B)  economic entity assumption. 
C)  monetary unit assumption. 
D)  periodicity assumption. 
A)  going concern assumption. 
B)  economic entity assumption. 
C)  monetary unit assumption. 
D)  periodicity assumption.

Question 15

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 16

Which of the following is not an accounting assumption?

Accepted Answer

A)  Integrity 
B)  Going concern 
C)  Periodicity 
D)  Economic entity 
A)  Integrity 
B)  Going concern 
C)  Periodicity 
D)  Economic entity

Question 17

Ratios that measure the income or operating success of a company for a given period of time are

Accepted Answer

A)  liquidity ratios. 
B)  profitability ratios. 
C)  solvency ratios. 
D)  trending ratios. 
A)  liquidity ratios. 
B)  profitability ratios. 
C)  solvency ratios. 
D)  trending ratios.

Question 18

The primary accounting standard-setting body in the United States is the Securities and Exchange Commission.

Accepted Answer

A) True 
 B)False

Question 19

Which statement about long-term investments is not true?

Accepted Answer

A)  They will be held for more than one year. 
B)  They are not currently used in the operation of the business. 
C)  They include investments in stock of other companies and land held for future use. 
D)  They do not include long-term notes receivable. 
A)  They will be held for more than one year. 
B)  They are not currently used in the operation of the business. 
C)  They include investments in stock of other companies and land held for future use. 
D)  They do not include long-term notes receivable.

Question 20

Dawson Corporation has the following information available for 2014:   Based on this information, what is Dawson's Retained Earnings balance at the end of the year?

Accepted Answer

A)  $680 
B)  $530 
C)  $420 
D)  $605 
A)  $680 
B)  $530 
C)  $420 
D)  $605

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

Using the following balance sheet and income statement data, what is the earnings per share? Average common shares outstanding was 10,000.

The historical cost principle requires that when assets are acquired, they be recorded at

Free cash flow represents

Current assets divided by current liabilities is known as the

Reporting a net income of $95,000 will

Accounting information should be verifiable in order to enhance

Generally accepted accounting principles are rules and practices that are recognized as a general guide for financial reporting purposes.

The debt to assets ratio is a

Most companies that follow IFRS present balance sheet (statement of financial position) information in this order.

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

A liability is classified as a current liability if it is to be paid within the coming year.

Issuing new shares of common stock will

It is assumed that the activities of Ford Motor company can be distinguished from those of General Motors because of the

Which of the following statements is not true?

Which of the following is not an accounting assumption?

Ratios that measure the income or operating success of a company for a given period of time are

The primary accounting standard-setting body in the United States is the Securities and Exchange Commission.

Which statement about long-term investments is not true?

Dawson Corporation has the following information available for 2014: Based on this information, what is Dawson's Retained Earnings balance at the end of the year?

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

Time Value of Money

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Exam 2: A Further Look at Financial Statements

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

Using the following balance sheet and income statement data, what is the earnings per share? Average common shares outstanding was 10,000.

The historical cost principle requires that when assets are acquired, they be recorded at

Free cash flow represents

Current assets divided by current liabilities is known as the

Reporting a net income of $95,000 will

Accounting information should be verifiable in order to enhance

Generally accepted accounting principles are rules and practices that are recognized as a general guide for financial reporting purposes.

The debt to assets ratio is a

Most companies that follow IFRS present balance sheet (statement of financial position) information in this order.

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

A liability is classified as a current liability if it is to be paid within the coming year.

Issuing new shares of common stock will

It is assumed that the activities of Ford Motor company can be distinguished from those of General Motors because of the

Which of the following statements is not true?

Which of the following is not an accounting assumption?

Ratios that measure the income or operating success of a company for a given period of time are

The primary accounting standard-setting body in the United States is the Securities and Exchange Commission.

Which statement about long-term investments is not true?

Dawson Corporation has the following information available for 2014: Based on this information, what is Dawson's Retained Earnings balance at the end of the year?

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

Time Value of Money

Filters