Question 1

Benedict Company compiled the following financial information as of December 31, 2014:   Benedict's retained earnings on December 31, 2014 are

Accepted Answer

A)  $300,000. 
B)  $360,000. 
C)  $320,000. 
D)  $ 20,000. 
A)  $300,000. 
B)  $360,000. 
C)  $320,000. 
D)  $ 20,000.

Question 2

The liability of corporate stockholders is limited to the amount of their investment.

Accepted Answer

A) True 
 B)False

Question 3

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 that are 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 that are paid to the shareholders. They belong on the retained earnings statement. 
D)  Dividends are deducted from retained earnings on the balance sheet.

Question 4

Liabilities

Accepted Answer

A)  are future economic benefits. 
B)  are debts and obligations. 
C)  possess service potential. 
D)  are things of value owned by a business. 
A)  are future economic benefits. 
B)  are debts and obligations. 
C)  possess service potential. 
D)  are things of value owned by a business.

Question 5

Which of the following are internal reports that accounting provides to internal users?

Accepted Answer

A)  Forecasts of cash needs for next year. 
B)  Financial comparisons of operating activity alternatives. 
C)  Both forecasts of cash needs and financial comparisons are internal reports. 
D)  Neither forecasts of cash needs or financial comparisons is an internal report. 
A)  Forecasts of cash needs for next year. 
B)  Financial comparisons of operating activity alternatives. 
C)  Both forecasts of cash needs and financial comparisons are internal reports. 
D)  Neither forecasts of cash needs or financial comparisons is an internal report.

Question 6

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 7

Ashley's Accessory Shop started the year with total assets of $140,000 and total liabilities of $80,000. During the year the business recorded $220,000 in revenues, $110,000 in expenses, and dividends of $40,000. The net income reported by Ashley's Accessory Shop for the year was

Accepted Answer

A)  $80,000. 
B)  $100,000. 
C)  $130,000. 
D)  $110,000. 
A)  $80,000. 
B)  $100,000. 
C)  $130,000. 
D)  $110,000.

Question 8

The internal control standards applicable to Sarbanes-Oxley apply to?

Accepted Answer

A)  all U.S.and international companies. 
B)  U.S. and international companies listed on U.S. exchange. 
C)  International companies listed on U.S. exchange. 
D)  U.S. companies listed on U.S. exchange. 
A)  all U.S.and international companies. 
B)  U.S. and international companies listed on U.S. exchange. 
C)  International companies listed on U.S. exchange. 
D)  U.S. companies listed on U.S. exchange.

Question 9

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 10

Which type of corporate information is not available to investors?

Accepted Answer

A)  Dividend history 
B)  Forecast of cash needs for the upcoming year 
C)  Cash provided by investing activities 
D)  Beginning cash balance 
A)  Dividend history 
B)  Forecast of cash needs for the upcoming year 
C)  Cash provided by investing activities 
D)  Beginning cash balance

Question 11

The majority of U.S. business is transacted by proprietorships.

Accepted Answer

A) True 
 B)False

Question 12

Most business enterprises in the United States are

Accepted Answer

A)  proprietorships and partnerships. 
B)  partnerships. 
C)  corporations. 
D)  government units. 
A)  proprietorships and partnerships. 
B)  partnerships. 
C)  corporations. 
D)  government units.

Question 13

How are each of the following financial statements interrelated? (a) Retained earnings statement and income statement. (b) Retained earnings statement and balance sheet. (c) Balance sheet and statement of cash flows.

Accepted Answer

(a) Net income from the income statement

Question 14

To show how successfully your business performed during a period of time, you would report its revenues and expenses in the

Accepted Answer

A)  balance sheet. 
B)  income statement. 
C)  statement of cash flows. 
D)  retained earnings statement. 
A)  balance sheet. 
B)  income statement. 
C)  statement of cash flows. 
D)  retained earnings statement.

Question 15

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 Act is meant 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 Act is meant to decrease the likelihood of unethical corporate behavior.

Question 16

Financing activities for corporations include borrowing money and selling shares of their own stock.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

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

Question 18

The accounting equation can be expressed as Assets - Liabilities = Stockholders' Equity.

Accepted Answer

A) True 
 B)False

Question 19

A small neighborhood barber shop that is operated by its owner would likely be organized as a

Accepted Answer

A)  joint venture. 
B)  partnership. 
C)  corporation. 
D)  proprietorship. 
A)  joint venture. 
B)  partnership. 
C)  corporation. 
D)  proprietorship.

Question 20

Gilkey Corporation began the year with retained earnings of $465,000. During the year, the company issued $630,000 of common stock, recorded expenses of $1,800,000, and paid dividends of $120,000. If Gilkey's ending retained earnings was $495,000, what was the company's revenue for the year?

Accepted Answer

A)  $1,830,000 
B)  $1,950,000 
C)  $2,460,000 
D)  $2,580,000 
A)  $1,830,000 
B)  $1,950,000 
C)  $2,460,000 
D)  $2,580,000

Benedict Company compiled the following financial information as of December 31, 2014: Benedict's retained earnings on December 31, 2014 are

The liability of corporate stockholders is limited to the amount of their investment.

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?

Liabilities

Which of the following are internal reports that accounting provides to internal users?

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

Ashley's Accessory Shop started the year with total assets of $140,000 and total liabilities of $80,000. During the year the business recorded $220,000 in revenues, $110,000 in expenses, and dividends of $40,000. The net income reported by Ashley's Accessory Shop for the year was

The internal control standards applicable to Sarbanes-Oxley apply to?

External users want answers to all of the following questions except

Which type of corporate information is not available to investors?

The majority of U.S. business is transacted by proprietorships.

Most business enterprises in the United States are

How are each of the following financial statements interrelated? (a) Retained earnings statement and income statement. (b) Retained earnings statement and balance sheet. (c) Balance sheet and statement of cash flows.

To show how successfully your business performed during a period of time, you would report its revenues and expenses in the

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

Financing activities for corporations include borrowing money and selling shares of their own stock.

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

The accounting equation can be expressed as Assets - Liabilities = Stockholders' Equity.

A small neighborhood barber shop that is operated by its owner would likely be organized as a

Gilkey Corporation began the year with retained earnings of $465,000. During the year, the company issued $630,000 of common stock, recorded expenses of $1,800,000, and paid dividends of $120,000. If Gilkey's ending retained earnings was $495,000, 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

Time Value of Money

Filters

Exam 1: Introduction to Financial Statements

Benedict Company compiled the following financial information as of December 31, 2014: Benedict's retained earnings on December 31, 2014 are

The liability of corporate stockholders is limited to the amount of their investment.

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?

Liabilities

Which of the following are internal reports that accounting provides to internal users?

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

Ashley's Accessory Shop started the year with total assets of $140,000 and total liabilities of $80,000. During the year the business recorded $220,000 in revenues, $110,000 in expenses, and dividends of $40,000. The net income reported by Ashley's Accessory Shop for the year was

The internal control standards applicable to Sarbanes-Oxley apply to?

External users want answers to all of the following questions except

Which type of corporate information is not available to investors?

The majority of U.S. business is transacted by proprietorships.

Most business enterprises in the United States are

How are each of the following financial statements interrelated? (a) Retained earnings statement and income statement. (b) Retained earnings statement and balance sheet. (c) Balance sheet and statement of cash flows.

To show how successfully your business performed during a period of time, you would report its revenues and expenses in the

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

Financing activities for corporations include borrowing money and selling shares of their own stock.

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

The accounting equation can be expressed as Assets - Liabilities = Stockholders' Equity.

A small neighborhood barber shop that is operated by its owner would likely be organized as a

Gilkey Corporation began the year with retained earnings of $465,000. During the year, the company issued $630,000 of common stock, recorded expenses of $1,800,000, and paid dividends of $120,000. If Gilkey's ending retained earnings was $495,000, 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

Time Value of Money

Filters