Question 1

The total amount of profits generated by a company and not distributed as dividends to stockholders is called

Accepted Answer

A)  revenue. 
B)  common stock. 
C)  par value. 
D)  additional paid-in capital. 
E)  retained earnings. 
A)  revenue. 
B)  common stock. 
C)  par value. 
D)  additional paid-in capital. 
E)  retained earnings.

Question 2

A distribution of a corporation's profits to owners is a

Accepted Answer

The answer of A distribution of a corporation's profits to...

Question 3

Barrington Industries recently sold 1,000 shares of common stock with a par value of $0.10 per share and a market price of $15.00 per share. 
-As a result of this sale, Barrington's additional paid-in capital should increase by

Accepted Answer

A)  $100. 
B)  $14,900. 
C)  $15,000. 
D)  $15,100. 
E)  none of the above 
A)  $100. 
B)  $14,900. 
C)  $15,000. 
D)  $15,100. 
E)  none of the above

Question 4

The SEC's "plain English" rules apply to all financial statements submitted to that agency.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements about expense recognition rules is true?

Accepted Answer

A)  Expenses may be recognized in any period, including those periods unrelated to the related revenue recognition. 
B)  To recognize an expense, a company must either pay out cash or incur a revenue. 
C)  When no direct cause and effect can be determined and no clear expected benefit time frame can be identified, an expenditure should be recorded as an asset and remain on a business's books indefinitely. 
D)  Cash need not be paid by a company for an item to be recognized as an expense. 
E)  The matching principle indicates that all expenses can be clearly associated with particular revenues. 
A)  Expenses may be recognized in any period, including those periods unrelated to the related revenue recognition. 
B)  To recognize an expense, a company must either pay out cash or incur a revenue. 
C)  When no direct cause and effect can be determined and no clear expected benefit time frame can be identified, an expenditure should be recorded as an asset and remain on a business's books indefinitely. 
D)  Cash need not be paid by a company for an item to be recognized as an expense. 
E)  The matching principle indicates that all expenses can be clearly associated with particular revenues.

Question 6

Haidar Co.'s trial balance at December 31, 2010, included the following account balances:
  
Required:
	a.	Calculate Haidar’s gross profit for 2010.
	b.	Calculate Haidar’s gross profit percentage for 2010.
	c.	Calculate Haidar’s net income for 2010.

Accepted Answer

@#IMG-DLM&
 
 (b) Gross Profit

Question 7

Which of the following statements about property, plant, and equipment and depreciation is true?

Accepted Answer

A)  Plant, property, and equipment assets are sold to customers in the normal course of business. 
B)  Accounting requires that the cost of a depreciable asset be recorded as an expense over time periods benefited by that asset. 
C)  Accumulated depreciation is the total amount of depreciation that has been recorded on a depreciable asset in the current period. 
D)  Accounting and general usages of the term depreciation are the same. 
E)  All of the above statements are true. 
A)  Plant, property, and equipment assets are sold to customers in the normal course of business. 
B)  Accounting requires that the cost of a depreciable asset be recorded as an expense over time periods benefited by that asset. 
C)  Accumulated depreciation is the total amount of depreciation that has been recorded on a depreciable asset in the current period. 
D)  Accounting and general usages of the term depreciation are the same. 
E)  All of the above statements are true.

Question 8

Match each term listed below with the appropriate term. Terms may be used once, more than once, or not at all.
-_____ The ease with the accounting information of an entity can be compared with its similar prior period information and with similar information reported by other business entities.

Accepted Answer

A)  Accounting Period 
B)  Comparability 
C)  Expense Recognition Rules 
D)  Feedback Value 
E)  Full Disclosure
F) Going Concern
G) Historical Cost
H) Neutrality
I) Predictive Value
J) Relevance
K) Reliability
L) Representational Faithfulness
M) Revenue Recognition Rules
N) Verifiability 
A)  Accounting Period 
B)  Comparability 
C)  Expense Recognition Rules 
D)  Feedback Value 
E)  Full Disclosure
F) Going Concern
G) Historical Cost
H) Neutrality
I) Predictive Value
J) Relevance
K) Reliability
L) Representational Faithfulness
M) Revenue Recognition Rules
N) Verifiability

Question 9

Q Company paid $3,600 for a two-year insurance policy on January 2, 2010. On that date, Q Company considers the $3,600 payment a(an)

Accepted Answer

A)  account payable. 
B)  prepaid asset. 
C)  expense. 
D)  revenue. 
E)  short-term investment. 
A)  account payable. 
B)  prepaid asset. 
C)  expense. 
D)  revenue. 
E)  short-term investment.

Question 10

Jim Linght has personal assets of $430,000 and business assets of $1,580,000. Because he is a sole proprietor, he should report all $2,010,000 of assets on his company's balance sheet.

Accepted Answer

A) True 
 B)False

Question 11

Expensing a $20 pencil sharpener rather than depreciating it over its useful life would result in a material misstatement of a company's financial statements.

Accepted Answer

A) True 
 B)False

Question 12

Usefulness in decision making is the most important qualitative characteristic that accounting information should possess.

Accepted Answer

A) True 
 B)False

Question 13

On Jan. 2, 2010, Sivan Corporation acquires a truck for $500,000. Cash of $400,000 is paid and a note payable for the remaining $100,000 was signed at acquisition. The truck is depreciated over a 10 year period at $50,000 per year. What is the accumulated depreciation at January 1, 2012?

Accepted Answer

A)  $ 50,000 
B)  $100,000 
C)  $150,000 
D)  $400,000 
E)  $500,000 
A)  $ 50,000 
B)  $100,000 
C)  $150,000 
D)  $400,000 
E)  $500,000

Question 14

Which of the following characteristics make accounting information relevant?

Accepted Answer

The answer of Which of the following characteristics make accounting...

Question 15

Amounts owed by businesses to third parties are known as

Accepted Answer

A)  assets. 
B)  liabilities. 
C)  stockholders' equity. 
D)  revenues. 
E)  expenses. 
A)  assets. 
B)  liabilities. 
C)  stockholders' equity. 
D)  revenues. 
E)  expenses.

Question 16

Shelton Corp., a local manufacturer, reported the following information for 2010:
 
-
What is Shelton Corp.'s gross profit percentage?

Accepted Answer

A)  7% 
B)  10% 
C)  15% 
D)  25% 
E)  30% 
A)  7% 
B)  10% 
C)  15% 
D)  25% 
E)  30%

Question 17

On Jan. 2, 2010, Wright Construction Co. purchased equipment for $50,000. Wright expects to use the equipment for three years, at which time it will have an estimated salvage value of $27,500. What is the depreciation expense for 2010?

Accepted Answer

A)  $ 7,500 
B)  $ 9,167 
C)  $16,667 
D)  $27,500 
E)  $50,000 
A)  $ 7,500 
B)  $ 9,167 
C)  $16,667 
D)  $27,500 
E)  $50,000

Question 18

GAAP allows companies to properly record the transactions that affect financial statements.

Accepted Answer

A) True 
 B)False

Question 19

The following information is contained on either the balance sheet or income statement of Watertown Corp.: 
?   
Required:
a.	In the "Financial Statement" column, indicate whether each item listed above belongs on Watertown's balance sheet or income statement. Use a "B" for balance sheet items and an "I" for income statement items.
b.	In the "Type of Account" column, indicate whether each item listed is an asset (A), liability (L), equity (EQ), revenue (R), or expense (EX) account.

Accepted Answer

The answer of The following information is contained on either...

Question 20

Corporations report earnings per share each period to assist stockholders in determining the profit that period that is attributable to their ownership interest in the firm.

Accepted Answer

A) True 
 B)False

The total amount of profits generated by a company and not distributed as dividends to stockholders is called

A distribution of a corporation's profits to owners is a

Barrington Industries recently sold 1,000 shares of common stock with a par value of $0.10 per share and a market price of $15.00 per share. -As a result of this sale, Barrington's additional paid-in capital should increase by

The SEC's "plain English" rules apply to all financial statements submitted to that agency.

Which of the following statements about expense recognition rules is true?

Haidar Co.'s trial balance at December 31, 2010, included the following account balances: Required: a. Calculate Haidar’s gross profit for 2010. b. Calculate Haidar’s gross profit percentage for 2010. c. Calculate Haidar’s net income for 2010.

Which of the following statements about property, plant, and equipment and depreciation is true?

Match each term listed below with the appropriate term. Terms may be used once, more than once, or not at all. -_____ The ease with the accounting information of an entity can be compared with its similar prior period information and with similar information reported by other business entities.

Q Company paid $3,600 for a two-year insurance policy on January 2, 2010. On that date, Q Company considers the $3,600 payment a(an)

Jim Linght has personal assets of $430,000 and business assets of $1,580,000. Because he is a sole proprietor, he should report all $2,010,000 of assets on his company's balance sheet.

Expensing a $20 pencil sharpener rather than depreciating it over its useful life would result in a material misstatement of a company's financial statements.

Usefulness in decision making is the most important qualitative characteristic that accounting information should possess.

On Jan. 2, 2010, Sivan Corporation acquires a truck for $500,000. Cash of $400,000 is paid and a note payable for the remaining $100,000 was signed at acquisition. The truck is depreciated over a 10 year period at $50,000 per year. What is the accumulated depreciation at January 1, 2012?

Which of the following characteristics make accounting information relevant?

Amounts owed by businesses to third parties are known as

Shelton Corp., a local manufacturer, reported the following information for 2010: - What is Shelton Corp.'s gross profit percentage?

On Jan. 2, 2010, Wright Construction Co. purchased equipment for $50,000. Wright expects to use the equipment for three years, at which time it will have an estimated salvage value of $27,500. What is the depreciation expense for 2010?

GAAP allows companies to properly record the transactions that affect financial statements.

Corporations report earnings per share each period to assist stockholders in determining the profit that period that is attributable to their ownership interest in the firm.

An Introduction to the Role of Accounting in the Business World

The Mechanics of Double-Entry Bookkeeping

Cash, Short-Term Investments and Accounts Receivable

Inventory

Long-Term Assets: Property, Plant Equipment and Intangibles

Liabilities

Stockholders Equity

The Corporate Income Statement and Financial Analysis

Statement of Cash Flows

Managerial Accounting

Cost-Volume-Profit Analysis

The Master Budget

Activity-Based Management and Performance Measurementreward

Filters

Exam 2: Concepts and Elements Underlying Accounting

The total amount of profits generated by a company and not distributed as dividends to stockholders is called

A distribution of a corporation's profits to owners is a

Barrington Industries recently sold 1,000 shares of common stock with a par value of $0.10 per share and a market price of $15.00 per share. -As a result of this sale, Barrington's additional paid-in capital should increase by

The SEC's "plain English" rules apply to all financial statements submitted to that agency.

Which of the following statements about expense recognition rules is true?

Haidar Co.'s trial balance at December 31, 2010, included the following account balances: Required: a. Calculate Haidar’s gross profit for 2010. b. Calculate Haidar’s gross profit percentage for 2010. c. Calculate Haidar’s net income for 2010.

Which of the following statements about property, plant, and equipment and depreciation is true?

Match each term listed below with the appropriate term. Terms may be used once, more than once, or not at all. -_____ The ease with the accounting information of an entity can be compared with its similar prior period information and with similar information reported by other business entities.

Q Company paid $3,600 for a two-year insurance policy on January 2, 2010. On that date, Q Company considers the $3,600 payment a(an)

Jim Linght has personal assets of $430,000 and business assets of $1,580,000. Because he is a sole proprietor, he should report all $2,010,000 of assets on his company's balance sheet.

Expensing a $20 pencil sharpener rather than depreciating it over its useful life would result in a material misstatement of a company's financial statements.

Usefulness in decision making is the most important qualitative characteristic that accounting information should possess.

On Jan. 2, 2010, Sivan Corporation acquires a truck for $500,000. Cash of $400,000 is paid and a note payable for the remaining $100,000 was signed at acquisition. The truck is depreciated over a 10 year period at $50,000 per year. What is the accumulated depreciation at January 1, 2012?

Which of the following characteristics make accounting information relevant?

Amounts owed by businesses to third parties are known as

Shelton Corp., a local manufacturer, reported the following information for 2010: - What is Shelton Corp.'s gross profit percentage?

On Jan. 2, 2010, Wright Construction Co. purchased equipment for $50,000. Wright expects to use the equipment for three years, at which time it will have an estimated salvage value of $27,500. What is the depreciation expense for 2010?

GAAP allows companies to properly record the transactions that affect financial statements.

Corporations report earnings per share each period to assist stockholders in determining the profit that period that is attributable to their ownership interest in the firm.

An Introduction to the Role of Accounting in the Business World

The Mechanics of Double-Entry Bookkeeping

Cash, Short-Term Investments and Accounts Receivable

Inventory

Long-Term Assets: Property, Plant Equipment and Intangibles

Liabilities

Stockholders Equity

The Corporate Income Statement and Financial Analysis

Statement of Cash Flows

Managerial Accounting

Cost-Volume-Profit Analysis

The Master Budget

Activity-Based Management and Performance Measurementreward

Filters