Question 1

Which one of the following is an operating activity of a business?

Accepted Answer

A)  Paying for purchases of inventory 
B)  Issuing stock for cash 
C)  Borrowing money from a bank 
D)  Purchasing a manufacturing plant. 
A)  Paying for purchases of inventory 
B)  Issuing stock for cash 
C)  Borrowing money from a bank 
D)  Purchasing a manufacturing plant.

Question 2

Presented below are condensed data from the financial statements of Gallo Factory for 2015 and 2014. The figures are expressed in thousands. Use this information to answer the questions that follow.
   Required: How much of Gallo Factory is financed by creditors at the end of December of 2015? Evaluate the change from 2014 to 2015.

Accepted Answer

The amount of financing by creditors for

Question 3

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement.
-Capital stock

Accepted Answer

A) Current Assets balance sheet 
B) Property, Plant, & Equipment balance sheet 
C) Current Liabilities balance sheet 
D) Long-term Liabilities balance sheet 
E) Stockholders' Equity balance sheet
F)Operating Revenue income statement
G)Operating Expenses income statement
H)Other Revenue & Expenses income statement
I)Income Taxes income statement 
A) Current Assets balance sheet 
B) Property, Plant, & Equipment balance sheet 
C) Current Liabilities balance sheet 
D) Long-term Liabilities balance sheet 
E) Stockholders' Equity balance sheet
F)Operating Revenue income statement
G)Operating Expenses income statement
H)Other Revenue & Expenses income statement
I)Income Taxes income statement

Question 4

From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Borrowed cash using a long-term note

Accepted Answer

A) Working capital will increase 
B) Working capital will decrease 
C) Working capital will not change 
A) Working capital will increase 
B) Working capital will decrease 
C) Working capital will not change

Question 5

Madden Company applies the consistency convention. What does this mean?

Accepted Answer

A)  Madden Co. uses the same names for all its expenses as its competitors. 
B)  Madden Co. has selected certain accounting principles that can never be changed. 
C)  Madden Co. applies the same accounting principles each accounting period. 
D)  Madden Co. applies the same accounting principles as it competitors. 
A)  Madden Co. uses the same names for all its expenses as its competitors. 
B)  Madden Co. has selected certain accounting principles that can never be changed. 
C)  Madden Co. applies the same accounting principles each accounting period. 
D)  Madden Co. applies the same accounting principles as it competitors.

Question 6

For each of the following, explain a transaction that will have the following stated effects on the accounting equation elements.
A Increase one asset, decrease one asset, and increase a liability.
B Increase an asset and increase stockholders' equity.
C Decrease an asset and decrease a liability.
D Increase an asset and increase a liability.
E Increase one asset and decrease another asset.

Accepted Answer

Answers may vary, but here are a few exa

Question 7

From the following list, select the proper section from the statement of cash flows in which it would be classified.
-Received cash from selling goods to customers

Accepted Answer

A) Operating Activities 
B) Investing Activities 
C) Financing Activities 
A) Operating Activities 
B) Investing Activities 
C) Financing Activities

Question 8

Global Inc. had net income for 2015 of $24,000. It declared and paid a $13,000 cash dividend in 2015. If the company's retained earnings for the end of the year was $39,600, what was the company's retained earnings balance at the beginning of 2015?

Accepted Answer

A)  $28,600 
B)  $50,600 
C)  $76,600 
D)  $2,600 
A)  $28,600 
B)  $50,600 
C)  $76,600 
D)  $2,600

Question 9

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes. Some terms may be used more than once, while others are not used at all.
-An entity that lends a company money with the expectation of repayment.

Accepted Answer

A) Capital stock 
B) Asset 
C) Owners' equity 
D) Time period 
E) Dividends
F)Economic entity concept
G)Expense
H)Retained earnings
I)Cost principle
J)Creditor
K)Liability
L)Revenue
M)Going concern
N)Monetary unit
O)Corporation 
A) Capital stock 
B) Asset 
C) Owners' equity 
D) Time period 
E) Dividends
F)Economic entity concept
G)Expense
H)Retained earnings
I)Cost principle
J)Creditor
K)Liability
L)Revenue
M)Going concern
N)Monetary unit
O)Corporation

Question 10

Which of the following statements is true?

Accepted Answer

A)  Profits distributed to the creditors are called dividends. 
B)  The balance sheet shows the assets, liabilities, and profits of a company. 
C)  Dividends are an expense, and are reported on the income statement as a deduction from net income. 
D)  The income statement reports the revenues and expenses of a company. 
A)  Profits distributed to the creditors are called dividends. 
B)  The balance sheet shows the assets, liabilities, and profits of a company. 
C)  Dividends are an expense, and are reported on the income statement as a deduction from net income. 
D)  The income statement reports the revenues and expenses of a company.

Question 11

Which one of the following is not a major category for long-term assets?

Accepted Answer

A)  Intangibles 
B)  Property, plant, and equipment 
C)  Receivables 
D)  Goodwill 
A)  Intangibles 
B)  Property, plant, and equipment 
C)  Receivables 
D)  Goodwill

Question 12

Why is the time period assumption required?

Accepted Answer

A)  Inflation exists 
B)  External users of financial statements want statements that accurately reflect net income or earnings for a specific time period. 
C)  The dollar is the monetary unit in the United States. 
D)  The federal government requires it. 
A)  Inflation exists 
B)  External users of financial statements want statements that accurately reflect net income or earnings for a specific time period. 
C)  The dollar is the monetary unit in the United States. 
D)  The federal government requires it.

Question 13

Front Corporation's end­of­year balance sheet consisted of the following amounts:   What is Front's owners' equity balance at the end of the current year?

Accepted Answer

A)  $3,000 
B)  $110,000 
C)  $63,000 
D)  $173,000 
A)  $3,000 
B)  $110,000 
C)  $63,000 
D)  $173,000

Question 14

Here is a list of accounts and their balances that appear on the Thomas Company's income statement and balance sheet.   REQUIRED:
Identify which of these are:
a Assets
b Liabilities
c Expenses
d Revenues

Accepted Answer

a Assets: Accounts receivable, Building,

Question 15

Which of the following organizations is responsible for setting auditing standards followed by public accounting firms in conducting independent audits of financial statements?

Accepted Answer

A)  Financial Accounting Standards Board FASB 
B)  Securities and Exchange Commission SEC 
C)  Public Company Accounting Oversight Board PCAOB 
D)  International Accounting Standards Board IASB 
A)  Financial Accounting Standards Board FASB 
B)  Securities and Exchange Commission SEC 
C)  Public Company Accounting Oversight Board PCAOB 
D)  International Accounting Standards Board IASB

Question 16

Which one of the following events involves a liability for a business?

Accepted Answer

A)  Loans to be repaid to banks 
B)  Inventories purchased for cash 
C)  Amounts invested by the owners 
D)  Stock sold to the general public 
A)  Loans to be repaid to banks 
B)  Inventories purchased for cash 
C)  Amounts invested by the owners 
D)  Stock sold to the general public

Question 17

Which one of the following is not an external user of financial statements?

Accepted Answer

A)  Suppliers 
B)  Creditors 
C)  Investors 
D)  The company's controller 
A)  Suppliers 
B)  Creditors 
C)  Investors 
D)  The company's controller

Question 18

means the presentation of information is free from bias toward a particular result.

Accepted Answer

The answer of means the presentation of information is free...

Question 19

Button Transportation purchases many pieces of office furniture with an individual cost below $200 each. Button chooses to account for these expenditures as expenses when acquired rather than reporting them as property, plant, and equipment on its balance sheet. The company's accountant and independent CPA agree that no accounting principle has been violated. What accounting justification allows Button to expense the furniture?

Accepted Answer

A)  Conservatism 
B)  Matching 
C)  Materiality 
D)  Verifiability 
A)  Conservatism 
B)  Matching 
C)  Materiality 
D)  Verifiability

Question 20

For several years, Flame Corporation has had a current ratio that was consistent with other companies in its industry. For the most recent year, Flame's current ratio was significantly higher than that for the industry. What is the best possible explanation for this situation?

Accepted Answer

A)  The other companies in the industry were not as profitable. 
B)  Flame's liquidity has improved or is not leveraging financial resources effectively. 
C)  Flame has less property, plant and equipment than other companies. 
D)  Flame has too much debt. 
A)  The other companies in the industry were not as profitable. 
B)  Flame's liquidity has improved or is not leveraging financial resources effectively. 
C)  Flame has less property, plant and equipment than other companies. 
D)  Flame has too much debt.

Which one of the following is an operating activity of a business?

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Capital stock

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Borrowed cash using a long-term note

Madden Company applies the consistency convention. What does this mean?

From the following list, select the proper section from the statement of cash flows in which it would be classified. -Received cash from selling goods to customers

Global Inc. had net income for 2015 of $24,000. It declared and paid a $13,000 cash dividend in 2015. If the company's retained earnings for the end of the year was $39,600, what was the company's retained earnings balance at the beginning of 2015?

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes. Some terms may be used more than once, while others are not used at all. -An entity that lends a company money with the expectation of repayment.

Which of the following statements is true?

Which one of the following is not a major category for long-term assets?

Why is the time period assumption required?

Front Corporation's endofyear balance sheet consisted of the following amounts: What is Front's owners' equity balance at the end of the current year?

Here is a list of accounts and their balances that appear on the Thomas Company's income statement and balance sheet. REQUIRED: Identify which of these are: a Assets b Liabilities c Expenses d Revenues

Which of the following organizations is responsible for setting auditing standards followed by public accounting firms in conducting independent audits of financial statements?

Which one of the following events involves a liability for a business?

Which one of the following is not an external user of financial statements?

means the presentation of information is free from bias toward a particular result.

For several years, Flame Corporation has had a current ratio that was consistent with other companies in its industry. For the most recent year, Flame's current ratio was significantly higher than that for the industry. What is the best possible explanation for this situation?

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

Filters

Exam 1: Accounting As a Form of Communication

Which one of the following is an operating activity of a business?

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Capital stock

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Borrowed cash using a long-term note

Madden Company applies the consistency convention. What does this mean?

From the following list, select the proper section from the statement of cash flows in which it would be classified. -Received cash from selling goods to customers

Global Inc. had net income for 2015 of $24,000. It declared and paid a $13,000 cash dividend in 2015. If the company's retained earnings for the end of the year was $39,600, what was the company's retained earnings balance at the beginning of 2015?

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes. Some terms may be used more than once, while others are not used at all. -An entity that lends a company money with the expectation of repayment.

Which of the following statements is true?

Which one of the following is not a major category for long-term assets?

Why is the time period assumption required?

Front Corporation's end­of­year balance sheet consisted of the following amounts: What is Front's owners' equity balance at the end of the current year?

Here is a list of accounts and their balances that appear on the Thomas Company's income statement and balance sheet. REQUIRED: Identify which of these are: a Assets b Liabilities c Expenses d Revenues

Which of the following organizations is responsible for setting auditing standards followed by public accounting firms in conducting independent audits of financial statements?

Which one of the following events involves a liability for a business?

Which one of the following is not an external user of financial statements?

means the presentation of information is free from bias toward a particular result.

For several years, Flame Corporation has had a current ratio that was consistent with other companies in its industry. For the most recent year, Flame's current ratio was significantly higher than that for the industry. What is the best possible explanation for this situation?

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

Filters

Front Corporation's endofyear balance sheet consisted of the following amounts: What is Front's owners' equity balance at the end of the current year?