Question 1

In any given period, a company's cash flow from operating activities is directly correlated with its net income.

Accepted Answer

A) True 
 B)False

Question 2

Respectively, ___ generally result from selling merchandise or providing services that a company has chosen for its primary activity and ___ are legitimate costs of doing business.

Accepted Answer

A)  revenues; expenses 
B)  expenses; revenues 
C)  assets; expenses 
D)  revenues; liabilities 
E)  revenues; dividends 
A)  revenues; expenses 
B)  expenses; revenues 
C)  assets; expenses 
D)  revenues; liabilities 
E)  revenues; dividends

Question 3

Which of the following statements about the Securities and Exchange Commission (SEC) is false?

Accepted Answer

A)  The SEC assesses the investment quality of securities issued by the companies that it regulates and prohibits the sale of highly speculative securities. 
B)  Congress established the SEC to deter abusive accounting and financial reporting practices that contributed to the 1929 stock market collapse. 
C)  Entities that sell their securities on an interstate basis are known as "publicly owned entities." 
D)  The SEC closely monitors the accounting profession's rule-making processes and has the authority to override any new rules issued by the FASB to the extent that those rules apply to publicly owned entities. 
E)  The SEC ensures that publicly owned companies provide third parties with sufficient information to make informed economic decisions regarding the securities these firms sell. 
A)  The SEC assesses the investment quality of securities issued by the companies that it regulates and prohibits the sale of highly speculative securities. 
B)  Congress established the SEC to deter abusive accounting and financial reporting practices that contributed to the 1929 stock market collapse. 
C)  Entities that sell their securities on an interstate basis are known as "publicly owned entities." 
D)  The SEC closely monitors the accounting profession's rule-making processes and has the authority to override any new rules issued by the FASB to the extent that those rules apply to publicly owned entities. 
E)  The SEC ensures that publicly owned companies provide third parties with sufficient information to make informed economic decisions regarding the securities these firms sell.

Question 4

International financial accounting standards and U.S. financial accounting standards are in the process of converging to create global consistency in accounting.

Accepted Answer

A) True 
 B)False

Question 5

The following financial information for three different companies has some missing amounts. 
‪   
Required:
For each of the companies listed above, find the missing amounts.

Accepted Answer

The answer of The following financial information for three different...

Question 6

The investing activities section of the statement of cash flows provides information on the amounts invested by stockholders into the corporation.

Accepted Answer

A) True 
 B)False

Question 7

Certified public accountants (CPAs) work in both public and private accounting.

Accepted Answer

A) True 
 B)False

Question 8

At December 31, 2009, Itah Inc. has $80,000 of assets and $45,000 of stockholders' equity. On January 5, 2010, the company bought $25,000 of assets by incurring a liability. Itah's liabilities and stockholders' equity after the purchase are, respectively,

Accepted Answer

A)  $0 and $15,000. 
B)  $0 and $70,000. 
C)  $60,000 and $20,000. 
D)  $60,000 and $45,000. 
E)  $105,000 and $20,000. 
A)  $0 and $15,000. 
B)  $0 and $70,000. 
C)  $60,000 and $20,000. 
D)  $60,000 and $45,000. 
E)  $105,000 and $20,000.

Question 9

The profits of ___ are taxed to the owners as individuals; the business organization itself pays no taxes.

Accepted Answer

A)  sole proprietorships and corporations 
B)  sole proprietorships and partnerships 
C)  partnerships and corporations 
D)  Sub S corporations and corporations 
E)  LLCs and corporations 
A)  sole proprietorships and corporations 
B)  sole proprietorships and partnerships 
C)  partnerships and corporations 
D)  Sub S corporations and corporations 
E)  LLCs and corporations

Question 10

Taxes associated with a corporation are combined with the stockholders' personal taxes.

Accepted Answer

A) True 
 B)False

Question 11

A _______ acts as a middleman and resells goods to others.

Accepted Answer

A)  limited liability company 
B)  service company 
C)  Sub S corporation 
D)  partnership 
E)  wholesaler 
A)  limited liability company 
B)  service company 
C)  Sub S corporation 
D)  partnership 
E)  wholesaler

Question 12

Which of the following statements reveals how a business generated and spent cash during a given accounting period?

Accepted Answer

A)  Balance Sheet 
B)  Income Statement 
C)  Statement of Stockholders' Equity 
D)  Statement of Cash Flows 
E)  Statement of Fund Balance 
A)  Balance Sheet 
B)  Income Statement 
C)  Statement of Stockholders' Equity 
D)  Statement of Cash Flows 
E)  Statement of Fund Balance

Question 13

The U.S. Congress passed which of the following legislative acts to enhance the accuracy and reliability of corporate financial reporting, strengthen corporate governance, and improve public accounting regulation?

Accepted Answer

A)  Public Company Accounting Oversight Act 
B)  Financial Accounting Standards Responsibility Act 
C)  Sarbanes-Oxley Act 
D)  IASB Conformity Act 
E)  Securities and Exchange Act 
A)  Public Company Accounting Oversight Act 
B)  Financial Accounting Standards Responsibility Act 
C)  Sarbanes-Oxley Act 
D)  IASB Conformity Act 
E)  Securities and Exchange Act

Question 14

The FASB is a

Accepted Answer

A)  private sector body that is funded by public accounting firms, industry, and the financial community. 
B)  private sector body that is funded by public accounting firms. 
C)  governmental entity that is funded by the Securities and Exchange Commission. 
D)  public sector body that is funded by taxpayers. 
E)  private sector body that is funded by corporate members of the New York Stock Exchange. 
A)  private sector body that is funded by public accounting firms, industry, and the financial community. 
B)  private sector body that is funded by public accounting firms. 
C)  governmental entity that is funded by the Securities and Exchange Commission. 
D)  public sector body that is funded by taxpayers. 
E)  private sector body that is funded by corporate members of the New York Stock Exchange.

Question 15

Businesses are typically categorized as

Accepted Answer

A)  industrial, service, and not-for-profit companies. 
B)  service, manufacturing, and limited liability companies. 
C)  for-profit and not-for-profit. 
D)  manufacturing, merchandising, and service companies. 
E)  wholesalers, retailers, and manufacturers. 
A)  industrial, service, and not-for-profit companies. 
B)  service, manufacturing, and limited liability companies. 
C)  for-profit and not-for-profit. 
D)  manufacturing, merchandising, and service companies. 
E)  wholesalers, retailers, and manufacturers.

Question 16

The following transactions occurred in Wimberly Corp. during 2010:
   
Required:
Indicate whether each of these transactions would be shown as an operating, investing, or financing activity on Wimberly's statement of cash flows for 2010.

Accepted Answer

The answer of The following transactions occurred in Wimberly Corp....

Question 17

The two types of merchandising companies are wholesalers and retailers.

Accepted Answer

A) True 
 B)False

Question 18

The balance sheet is also called the statement of

Accepted Answer

A)  stockholders' equity. 
B)  resources and debts. 
C)  profitability. 
D)  owners' capital. 
E)  financial position. 
A)  stockholders' equity. 
B)  resources and debts. 
C)  profitability. 
D)  owners' capital. 
E)  financial position.

Question 19

Joe and Mia are 50:50 partners in the J&M Shop. The Shop has experienced financial difficulty over the past three years. After liquidating all its assets, the Shop still owes $15,000 to creditors. Joe has $20,000 of net worth and Mia has $5,000 of net worth. Creditors can collect

Accepted Answer

A)  $10,000 from Joe and $5,000 from Mia. 
B)  $15,000 from Joe and $5,000 from Mia. 
C)  $15,000 from Joe and $0 from Mia. 
D)  $0 from Joe and $0 from Mia (since the partnership has no assets). 
E)  either a or c. 
A)  $10,000 from Joe and $5,000 from Mia. 
B)  $15,000 from Joe and $5,000 from Mia. 
C)  $15,000 from Joe and $0 from Mia. 
D)  $0 from Joe and $0 from Mia (since the partnership has no assets). 
E)  either a or c.

Question 20

The rule-making authority within the U.S. that is responsible for promulgating new financial accounting standards is the

Accepted Answer

A)  Federal Accounting Standards Board. 
B)  American Institute of Certified Public Accountants. 
C)  International Accounting Standards Board. 
D)  Institute of Management Accountants. 
E)  Financial Accounting Standards Board. 
A)  Federal Accounting Standards Board. 
B)  American Institute of Certified Public Accountants. 
C)  International Accounting Standards Board. 
D)  Institute of Management Accountants. 
E)  Financial Accounting Standards Board.

In any given period, a company's cash flow from operating activities is directly correlated with its net income.

Respectively, _ generally result from selling merchandise or providing services that a company has chosen for its primary activity and _ are legitimate costs of doing business.

Which of the following statements about the Securities and Exchange Commission (SEC) is false?

International financial accounting standards and U.S. financial accounting standards are in the process of converging to create global consistency in accounting.

The following financial information for three different companies has some missing amounts. ‪ Required: For each of the companies listed above, find the missing amounts.

The investing activities section of the statement of cash flows provides information on the amounts invested by stockholders into the corporation.

Certified public accountants (CPAs) work in both public and private accounting.

At December 31, 2009, Itah Inc. has $80,000 of assets and $45,000 of stockholders' equity. On January 5, 2010, the company bought $25,000 of assets by incurring a liability. Itah's liabilities and stockholders' equity after the purchase are, respectively,

The profits of ___ are taxed to the owners as individuals; the business organization itself pays no taxes.

Taxes associated with a corporation are combined with the stockholders' personal taxes.

A _______ acts as a middleman and resells goods to others.

Which of the following statements reveals how a business generated and spent cash during a given accounting period?

The U.S. Congress passed which of the following legislative acts to enhance the accuracy and reliability of corporate financial reporting, strengthen corporate governance, and improve public accounting regulation?

The FASB is a

Businesses are typically categorized as

The following transactions occurred in Wimberly Corp. during 2010: Required: Indicate whether each of these transactions would be shown as an operating, investing, or financing activity on Wimberly's statement of cash flows for 2010.

The two types of merchandising companies are wholesalers and retailers.

The balance sheet is also called the statement of

Joe and Mia are 50:50 partners in the J&M Shop. The Shop has experienced financial difficulty over the past three years. After liquidating all its assets, the Shop still owes $15,000 to creditors. Joe has $20,000 of net worth and Mia has $5,000 of net worth. Creditors can collect

The rule-making authority within the U.S. that is responsible for promulgating new financial accounting standards is the

Concepts and Elements Underlying Accounting

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 1: An Introduction to the Role of Accounting in the Business World

In any given period, a company's cash flow from operating activities is directly correlated with its net income.

Respectively, ___ generally result from selling merchandise or providing services that a company has chosen for its primary activity and ___ are legitimate costs of doing business.

Which of the following statements about the Securities and Exchange Commission (SEC) is false?

International financial accounting standards and U.S. financial accounting standards are in the process of converging to create global consistency in accounting.

The following financial information for three different companies has some missing amounts. ‪ Required: For each of the companies listed above, find the missing amounts.

The investing activities section of the statement of cash flows provides information on the amounts invested by stockholders into the corporation.

Certified public accountants (CPAs) work in both public and private accounting.

At December 31, 2009, Itah Inc. has $80,000 of assets and $45,000 of stockholders' equity. On January 5, 2010, the company bought $25,000 of assets by incurring a liability. Itah's liabilities and stockholders' equity after the purchase are, respectively,

The profits of ___ are taxed to the owners as individuals; the business organization itself pays no taxes.

Taxes associated with a corporation are combined with the stockholders' personal taxes.

A _______ acts as a middleman and resells goods to others.

Which of the following statements reveals how a business generated and spent cash during a given accounting period?

The U.S. Congress passed which of the following legislative acts to enhance the accuracy and reliability of corporate financial reporting, strengthen corporate governance, and improve public accounting regulation?

The FASB is a

Businesses are typically categorized as

The following transactions occurred in Wimberly Corp. during 2010: Required: Indicate whether each of these transactions would be shown as an operating, investing, or financing activity on Wimberly's statement of cash flows for 2010.

The two types of merchandising companies are wholesalers and retailers.

The balance sheet is also called the statement of

Joe and Mia are 50:50 partners in the J&M Shop. The Shop has experienced financial difficulty over the past three years. After liquidating all its assets, the Shop still owes $15,000 to creditors. Joe has $20,000 of net worth and Mia has $5,000 of net worth. Creditors can collect

The rule-making authority within the U.S. that is responsible for promulgating new financial accounting standards is the

Concepts and Elements Underlying Accounting

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

Respectively, _ generally result from selling merchandise or providing services that a company has chosen for its primary activity and _ are legitimate costs of doing business.