Question 1

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 2

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 3

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.

Question 4

If total liabilities decreased by $50,000 and stockholders' equity increased by $10,000 during a period of time, then total assets must change by what amount and direction during that same period?

Accepted Answer

A)  $40,000 decrease 
B)  $40,000 increase 
C)  $50,000 increase 
D)  $60,000 increase 
A)  $40,000 decrease 
B)  $40,000 increase 
C)  $50,000 increase 
D)  $60,000 increase

Question 5

Net income will result during a time period when

Accepted Answer

A)  assets exceed liabilities. 
B)  assets exceed revenues. 
C)  expenses exceed revenues. 
D)  revenues exceed expenses. 
A)  assets exceed liabilities. 
B)  assets exceed revenues. 
C)  expenses exceed revenues. 
D)  revenues exceed expenses.

Question 6

The United States and the international standard-setting environment are primarily driven by meeting the needs of

Accepted Answer

A)  investors and creditors. 
B)  tax authorities. 
C)  central government planners. 
D)  academic researchers. 
A)  investors and creditors. 
B)  tax authorities. 
C)  central government planners. 
D)  academic researchers.

Question 7

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 8

The common characteristic possessed by all assets is

Accepted Answer

A)  long life. 
B)  great monetary value. 
C)  tangible nature. 
D)  future economic benefit. 
A)  long life. 
B)  great monetary value. 
C)  tangible nature. 
D)  future economic benefit.

Question 9

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 10

Kilmer Corporation began the year with retained earnings of $620,000. During the year, the company issued $840,000 of common stock, recorded expenses of $2,400,000, and paid dividends of $160,000. If Kilmer's ending retained earnings was $660,000, what was the company's revenue for the year?

Accepted Answer

A)  $2,440,000 
B)  $2,600,000 
C)  $3,280,000 
D)  $33,440,000 
A)  $2,440,000 
B)  $2,600,000 
C)  $3,280,000 
D)  $33,440,000

Question 11

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 12

A corporation has which of the following set of characteristics?

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

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

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

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

Accepted Answer

A) True 
 B)False

Question 17

Retained earnings at the end of the period is equal to

Accepted Answer

A)  retained earnings at the beginning of the period plus net income minus liabilities. 
B)  retained earnings at the beginning of the period plus net income minus dividends. 
C)  net income. 
D)  assets plus liabilities. 
A)  retained earnings at the beginning of the period plus net income minus liabilities. 
B)  retained earnings at the beginning of the period plus net income minus dividends. 
C)  net income. 
D)  assets plus liabilities.

Question 18

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 19

An auditor is an accounting professional who conducts an independent examination of the accounting data presented by a company.

Accepted Answer

A) True 
 B)False

Question 20

This information is for Campo Corporation for the year ended December 31, 2014.   Instructions
Prepare the 2014 statement of cash flows for Campo Corporation.

Accepted Answer

The answer of This information is for Campo Corporation for...

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

Debts and obligations of a business are referred to as

A business organized as a separate legal entity is a

If total liabilities decreased by $50,000 and stockholders' equity increased by $10,000 during a period of time, then total assets must change by what amount and direction during that same period?

Net income will result during a time period when

The United States and the international standard-setting environment are primarily driven by meeting the needs of

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

The common characteristic possessed by all assets is

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

Kilmer Corporation began the year with retained earnings of $620,000. During the year, the company issued $840,000 of common stock, recorded expenses of $2,400,000, and paid dividends of $160,000. If Kilmer's ending retained earnings was $660,000, what was the company's revenue for the year?

Which of the following statements is true?

A corporation has which of the following set of characteristics?

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

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

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

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

Retained earnings at the end of the period is equal to

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

An auditor is an accounting professional who conducts an independent examination of the accounting data presented by a company.

This information is for Campo Corporation for the year ended December 31, 2014. Instructions Prepare the 2014 statement of cash flows for Campo 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

Time Value of Money

Filters

Exam 1: Introduction to Financial Statements

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

Debts and obligations of a business are referred to as

A business organized as a separate legal entity is a

If total liabilities decreased by $50,000 and stockholders' equity increased by $10,000 during a period of time, then total assets must change by what amount and direction during that same period?

Net income will result during a time period when

The United States and the international standard-setting environment are primarily driven by meeting the needs of

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

The common characteristic possessed by all assets is

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

Kilmer Corporation began the year with retained earnings of $620,000. During the year, the company issued $840,000 of common stock, recorded expenses of $2,400,000, and paid dividends of $160,000. If Kilmer's ending retained earnings was $660,000, what was the company's revenue for the year?

Which of the following statements is true?

A corporation has which of the following set of characteristics?

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

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

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

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

Retained earnings at the end of the period is equal to

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

An auditor is an accounting professional who conducts an independent examination of the accounting data presented by a company.

This information is for Campo Corporation for the year ended December 31, 2014. Instructions Prepare the 2014 statement of cash flows for Campo 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

Time Value of Money

Filters