Question 1

On the statement of cash flows, the ______________________________ section involves the purchase and sale of products and services.

Accepted Answer

Operating

Question 2

Which of the following events will cause a company's current ratio to rise?

Accepted Answer

A)  The collection of an account receivable 
B)  Selling land for cash. 
C)  The discharge of an account payable by signing a short-term note payable 
D)  None of these choices. 
A)  The collection of an account receivable 
B)  Selling land for cash. 
C)  The discharge of an account payable by signing a short-term note payable 
D)  None of these choices.

Question 3

Carnival Bakery borrowed $500,000 from Front Street Bank.Carnival then hired a contractor to build a new Jonesie distribution outlet.In which section of Carnival's statement of cash flows would you find information that indicated that Carnival acquired the new Jonesie distribution outlet?

Accepted Answer

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

Question 4

From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Paid cash for supplies

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

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 6

._________________________ are cash and other assets that are reasonably expected to be converted to cash during the normal operating cycle of the business.

Accepted Answer

The answer of ._________________________ are cash and other assets that...

Question 7

Which of the following include only current assets?

Accepted Answer

A)  Accounts receivable, cash, inventory, office supplies 
B)  Cash, accounts payable, inventory, office supplies 
C)  Cash, land, accounts receivable, inventory 
D)  Accounts receivable, cash, furniture, office supplies 
A)  Accounts receivable, cash, inventory, office supplies 
B)  Cash, accounts payable, inventory, office supplies 
C)  Cash, land, accounts receivable, inventory 
D)  Accounts receivable, cash, furniture, office supplies

Question 8

Accountants are the main reason financial statements are prepared.

Accepted Answer

A) True 
 B)False

Question 9

For each item listed, select the section of the balance sheet in which the item would be reported.
-Interest payable

Accepted Answer

A) Current Assets 
B) Property.Plant, and Equipment 
C) Current Liabilities 
D) Long-term Liabilities 
E) Stockholders' Equity 
A) Current Assets 
B) Property.Plant, and Equipment 
C) Current Liabilities 
D) Long-term Liabilities 
E) Stockholders' Equity

Question 10

The operating cycle for all businesses is one year.

Accepted Answer

A) True 
 B)False

Question 11

An investor found the following in an annual report: "The financial statements, in our opinion, present fairly the financial position, operating results, and cash flows, in conformity with accounting principles generally accepted in the United States." In which section of the annual report did the investor find this?

Accepted Answer

A)  Balance Sheet 
B)  Notes to the Financial Statements 
C)  Management's Discussion and Analysis 
D)  Report of the Independent Accountants 
A)  Balance Sheet 
B)  Notes to the Financial Statements 
C)  Management's Discussion and Analysis 
D)  Report of the Independent Accountants

Question 12

From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Purchased land for cash

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 13

Which one of the following is a financing activity of a business?

Accepted Answer

A)  Paying for purchases of inventory 
B)  Issuing stock for cash 
C)  Paying salaries 
D)  Purchasing a manufacturing plant 
A)  Paying for purchases of inventory 
B)  Issuing stock for cash 
C)  Paying salaries 
D)  Purchasing a manufacturing plant

Question 14

In a ____________________-step income statement, all expenses and losses are added together, then deducted from the sum of all revenues and gains.

Accepted Answer

The answer of In a ____________________-step income statement, all expenses...

Question 15

Bevco Company has provided the following information from its accounting records for the current year: $$\begin{array} { l r l r } 
\text { Cash } & \$ 55,000 & \text { Accounts receivable } & \$ 45,000 \
\text { Inventory } & 65,000 & \text { Land } & 75,000 \
\text { Accounts payable } & 50,000 & \text { Notes payable (due 2020) } & 150,000 \
\text { Retained earnings } & ? & \text { Capital stock } & 20,000
\end{array}$$
-Read the information for Bevco Corporation.What are Bevco' current assets?

Accepted Answer

A)  $ 100,000 
B)  $ 165,000 
C)  $ 210,000 
D)  $ 240,000 
A)  $ 100,000 
B)  $ 165,000 
C)  $ 210,000 
D)  $ 240,000

Question 16

Most businesses have an operating cycle of greater than one year.

Accepted Answer

A) True 
 B)False

Question 17

The preparation of financial statements requires that the information be understandable

Accepted Answer

A)  Only to CPAs. 
B)  To those willing to spend the time to understand it. 
C)  Only to those who take an accounting course. 
D)  Only to financial analysts and brokers. 
A)  Only to CPAs. 
B)  To those willing to spend the time to understand it. 
C)  Only to those who take an accounting course. 
D)  Only to financial analysts and brokers.

Question 18

Which of the following is the best description of the purpose of financial reporting?

Accepted Answer

A)  To allow users to access to the daily detailed records of a business. 
B)  To help the users reach their decisions in an informed manner. 
C)  To provide users with an assessment of how long the company will continue as a going concern. 
D)  To allow users access to a list of all the individuals who owe the company money. 
A)  To allow users to access to the daily detailed records of a business. 
B)  To help the users reach their decisions in an informed manner. 
C)  To provide users with an assessment of how long the company will continue as a going concern. 
D)  To allow users access to a list of all the individuals who owe the company money.

Question 19

Which of the following statements is true regarding the multiple-step income statement?

Accepted Answer

A)  The multiple-step income statement is used only by companies that sell products, not those that provide services. 
B)  The multiple-step income statement is helpful in determining a company's working capital. 
C)  The multiple-step income statement reports the same net income as the single-step income statement. 
D)  The multiple-step income statement is required under generally accepted accounting principles. 
A)  The multiple-step income statement is used only by companies that sell products, not those that provide services. 
B)  The multiple-step income statement is helpful in determining a company's working capital. 
C)  The multiple-step income statement reports the same net income as the single-step income statement. 
D)  The multiple-step income statement is required under generally accepted accounting principles.

Question 20

If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable to settle an open account will cause the ratio to decrease.

Accepted Answer

A) True 
 B)False

On the statement of cash flows, the ______________________________ section involves the purchase and sale of products and services.

Which of the following events will cause a company's current ratio to rise?

Carnival Bakery borrowed $500,000 from Front Street Bank.Carnival then hired a contractor to build a new Jonesie distribution outlet.In which section of Carnival's statement of cash flows would you find information that indicated that Carnival acquired the new Jonesie distribution outlet?

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Paid cash for supplies

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

._________________________ are cash and other assets that are reasonably expected to be converted to cash during the normal operating cycle of the business.

Which of the following include only current assets?

Accountants are the main reason financial statements are prepared.

For each item listed, select the section of the balance sheet in which the item would be reported. -Interest payable

The operating cycle for all businesses is one year.

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Purchased land for cash

Which one of the following is a financing activity of a business?

In a ____________________-step income statement, all expenses and losses are added together, then deducted from the sum of all revenues and gains.

Most businesses have an operating cycle of greater than one year.

The preparation of financial statements requires that the information be understandable

Which of the following is the best description of the purpose of financial reporting?

Which of the following statements is true regarding the multiple-step income statement?

If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable to settle an open account will cause the ratio to decrease.

Accounting As a Form of Communication

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 True Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters

Exam 2: Financial Statements and the Annual Report

On the statement of cash flows, the ______________________________ section involves the purchase and sale of products and services.

Which of the following events will cause a company's current ratio to rise?

Carnival Bakery borrowed $500,000 from Front Street Bank.Carnival then hired a contractor to build a new Jonesie distribution outlet.In which section of Carnival's statement of cash flows would you find information that indicated that Carnival acquired the new Jonesie distribution outlet?

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Paid cash for supplies

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

._________________________ are cash and other assets that are reasonably expected to be converted to cash during the normal operating cycle of the business.

Which of the following include only current assets?

Accountants are the main reason financial statements are prepared.

For each item listed, select the section of the balance sheet in which the item would be reported. -Interest payable

The operating cycle for all businesses is one year.

From the following choices, select the answer that describes the effect on working capital as a result of the transaction. -Purchased land for cash

Which one of the following is a financing activity of a business?

In a ____________________-step income statement, all expenses and losses are added together, then deducted from the sum of all revenues and gains.

Most businesses have an operating cycle of greater than one year.

The preparation of financial statements requires that the information be understandable

Which of the following is the best description of the purpose of financial reporting?

Which of the following statements is true regarding the multiple-step income statement?

If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable to settle an open account will cause the ratio to decrease.

Accounting As a Form of Communication

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 True Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters