Question 1

An enterprise's obligations to pay cash or other economic resources to others are called

Accepted Answer

A)  Liabilities 
B)  Expenses 
C)  Losses 
D)  Assets 
A)  Liabilities 
B)  Expenses 
C)  Losses 
D)  Assets A

Question 2

Net assets are equal to

Accepted Answer

A)  Total assets minus owners' equity 
B)  Total assets minus net income 
C)  Total assets minus dividends paid 
D)  Total assets minus total liabilities 
A)  Total assets minus owners' equity 
B)  Total assets minus net income 
C)  Total assets minus dividends paid 
D)  Total assets minus total liabilities D

Question 3

Current assets usually are listed on a balance sheet in

Accepted Answer

A)  Decreasing order of liquidity 
B)  Increasing order of liquidity 
C)  A random fashion 
D)  Decreasing order of profitability 
A)  Decreasing order of liquidity 
B)  Increasing order of liquidity 
C)  A random fashion 
D)  Decreasing order of profitability A

Question 4

For the year ended December 31, 2012, Southern Company had the following account balances:
  
Given the above information, compute the following items:

Accepted Answer

Given the above info

Question 5

Retained earnings are

Accepted Answer

A)  The earnings of a company that have been distributed to the owners. 
B)  The earnings of a company that have been retained in the company. 
C)  The amount of cash that a company has. 
D)  The amount of cash required for company investments. 
A)  The earnings of a company that have been distributed to the owners. 
B)  The earnings of a company that have been retained in the company. 
C)  The amount of cash that a company has. 
D)  The amount of cash required for company investments.

Question 6

Another name for the balance sheet is the

Accepted Answer

A)  Statement of cash flows 
B)  Statement of earnings 
C)  Statement of financial position 
D)  Retained earnings statement 
A)  Statement of cash flows 
B)  Statement of earnings 
C)  Statement of financial position 
D)  Retained earnings statement

Question 7

The financial statement that reports resources owned, the obligations to transfer resources to other organizations, and the claims by the entity's owners is known as the

Accepted Answer

A)  Income statement 
B)  Statement of retained earnings 
C)  Balance sheet 
D)  Statement of cash flows 
A)  Income statement 
B)  Statement of retained earnings 
C)  Balance sheet 
D)  Statement of cash flows

Question 8

The following information was taken from the records of McDyce Corporation for the year ended December 31, 2013:   The retained earnings balance at December 31, 2013 was

Accepted Answer

A)  $216,425 
B)  $27,050 
C)  $146,550 
D)  $33,450 
A)  $216,425 
B)  $27,050 
C)  $146,550 
D)  $33,450

Question 9

A business owned by one person is called a

Accepted Answer

A)  Nonprofit organization 
B)  Partnership 
C)  Corporation 
D)  Sole proprietorship 
A)  Nonprofit organization 
B)  Partnership 
C)  Corporation 
D)  Sole proprietorship

Question 10

Which of the following decreases owners' equity?

Accepted Answer

A)  Additional investments in the company are made by the owners 
B)  Operations generate a loss 
C)  Operations generate a profit that is retained in the company 
D)  None of these decreases owners' equity 
A)  Additional investments in the company are made by the owners 
B)  Operations generate a loss 
C)  Operations generate a profit that is retained in the company 
D)  None of these decreases owners' equity

Question 11

Which of the following includes a company's financial position for both the current year and the preceding year?

Accepted Answer

A)  Comparative balance sheet 
B)  Income statement 
C)  Classified balance sheet 
D)  Liquidity balance sheet 
A)  Comparative balance sheet 
B)  Income statement 
C)  Classified balance sheet 
D)  Liquidity balance sheet

Question 12

During the year, Rigby Corporation earned revenues of $114,000 and incurred $98,000 for various operating expenses. There are 1,280 shares of stock outstanding. Earnings per share is

Accepted Answer

A)  $12.80 
B)  $12.50 
C)  $8.80 
D)  $8.50 
A)  $12.80 
B)  $12.50 
C)  $8.80 
D)  $8.50

Question 13

List the three categories of the balance sheet. For each category, provide the definition and examples of two types of accounts that are found in that particular category.

Accepted Answer

The answer of List the three categories of the balance...

Question 14

Financial accounting is based on certain fundamental concepts and assumptions. The importance of these items is that they allow the accountant to determine which events to account for and in what manner. Define the following:

Accepted Answer

The answer of Financial accounting is based on certain fundamental...

Question 15

Which of the following is an essential characteristic of the traditional accounting model?

Accepted Answer

A)  Going concern assumption 
B)  Cost principle 
C)  Entity concept 
D)  All of these are essential characteristics 
A)  Going concern assumption 
B)  Cost principle 
C)  Entity concept 
D)  All of these are essential characteristics

Question 16

The basic accounting equation is

Accepted Answer

A)  Assets = Liabilities + Owners' Equity 
B)  Assets + Liabilities = Owners' Equity 
C)  Assets + Owners' Equity = Liabilities 
D)  Liabilities - Owners' Equity = Assets 
A)  Assets = Liabilities + Owners' Equity 
B)  Assets + Liabilities = Owners' Equity 
C)  Assets + Owners' Equity = Liabilities 
D)  Liabilities - Owners' Equity = Assets

Question 17

Which of the following accounts is NOT an asset account?

Accepted Answer

A)  Equipment 
B)  Accounts Receivable 
C)  Accounts Payable 
D)  Supplies 
A)  Equipment 
B)  Accounts Receivable 
C)  Accounts Payable 
D)  Supplies

Question 18

Exhibit 2-3 During the month, Meridian Company had the following cash transactions:
  
-Refer to Exhibit 2-3. Given the above information, compute cash flow from operating activities.

Accepted Answer

A)  $4,250 
B)  $20,750 
C)  $15,750 
D)  $9,250 
A)  $4,250 
B)  $20,750 
C)  $15,750 
D)  $9,250

Question 19

Which of the following activities would NOT be classified as an investing activity?

Accepted Answer

A)  Purchase of land 
B)  Purchase of inventory 
C)  Sale of Land 
D)  Sale of equipment 
A)  Purchase of land 
B)  Purchase of inventory 
C)  Sale of Land 
D)  Sale of equipment

Question 20

Expense and revenue accounts appear on the

Accepted Answer

A)  Balance sheet 
B)  Income statement 
C)  Retained earnings statement 
D)  Funds statement 
A)  Balance sheet 
B)  Income statement 
C)  Retained earnings statement 
D)  Funds statement

Exam 2: Financial Statements: An Overview

An enterprise's obligations to pay cash or other economic resources to others are called

Net assets are equal to

Current assets usually are listed on a balance sheet in

For the year ended December 31, 2012, Southern Company had the following account balances: Given the above information, compute the following items:

Retained earnings are

Another name for the balance sheet is the

The financial statement that reports resources owned, the obligations to transfer resources to other organizations, and the claims by the entity's owners is known as the

The following information was taken from the records of McDyce Corporation for the year ended December 31, 2013: The retained earnings balance at December 31, 2013 was

A business owned by one person is called a

Which of the following decreases owners' equity?

Which of the following includes a company's financial position for both the current year and the preceding year?

During the year, Rigby Corporation earned revenues of $114,000 and incurred $98,000 for various operating expenses. There are 1,280 shares of stock outstanding. Earnings per share is

List the three categories of the balance sheet. For each category, provide the definition and examples of two types of accounts that are found in that particular category.

Financial accounting is based on certain fundamental concepts and assumptions. The importance of these items is that they allow the accountant to determine which events to account for and in what manner. Define the following:

Which of the following is an essential characteristic of the traditional accounting model?

The basic accounting equation is

Which of the following accounts is NOT an asset account?

Exhibit 2-3 During the month, Meridian Company had the following cash transactions: -Refer to Exhibit 2-3. Given the above information, compute cash flow from operating activities.

Which of the following activities would NOT be classified as an investing activity?

Expense and revenue accounts appear on the

Accounting Information: Users and Uses

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

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