Question 1

Knowledge of the exchange rate is necessary to apply the money measure concept in case of international transactions.

Accepted Answer

A) True 
 B)False

Question 2

Upshaw Corporation had a balance in Retained Earnings on December 31,2009,of $260,000.During 2010,the company reported a net income of $112,000 after taxes.During 2010,the company declared and paid cash dividends totaling $16,000.Prepare the company's statement of retained earnings for the year ended December 31,2010.

Accepted Answer

None

Question 3

The statement of cash flows would disclose the purchase of a building for cash

Accepted Answer

A)  nowhere on the statement. 
B)  in the operating activities section. 
C)  in the investing activities section. 
D)  in the financing activities section. 
A)  nowhere on the statement. 
B)  in the operating activities section. 
C)  in the investing activities section. 
D)  in the financing activities section.

Question 4

Financial accounting information is used primarily by management.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not a satisfactory statement of the accounting equation?

Accepted Answer

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

Question 6

Use the following information to calculate at,or for the year ended,December 31,2010 (a)net income,(b)retained earnings,(c)total liabilities and stockholders' equity,and (d)accounts receivable.
 $\begin{array}{lrlr}
\text { Supplies } & \$ 1,000 & \text { Cash } & \$ 32,000 \
 \text { Wages Expense } & 14,000 & \text { Dividends } & 16,000 \
 \text { Accounts Payable } & 22,000 & \text { Notes Payable } & 4,000 \
 \text { Retained Earnings, December 31, } & 8,000 & \text { Patents } & 7,000 \
2009\
& & \begin{array}{l}
\text { Retained Earnings, } \
\text { December 31, } 2010
\end{array} &? \
 \text {Accounts Receivable  } & \text { ? } & & \
 \text { Rent Expense } & 6,000 & \text { Common Stock } & 20,000 \
 \text {Commissions Earned } & 30,000 & & \
\end{array}$

Accepted Answer

a.$30,000 - $6,000 - $14,000 =

Question 7

The declaration of a dividend will reduce net income.

Accepted Answer

A) True 
 B)False

Question 8

One user of accounting information with an indirect financial interest in a business is

Accepted Answer

A)  a creditor. 
B)  a financial adviser. 
C)  management. 
D)  an investor. 
A)  a creditor. 
B)  a financial adviser. 
C)  management. 
D)  an investor.

Question 9

Responsibility for ethical financial reporting rests solely with the accountant.

Accepted Answer

A) True 
 B)False

Question 10

The management of a corporation is responsible for electing the board of directors.

Accepted Answer

A) True 
 B)False

Question 11

An auditor maintains no direct financial interest in the company he or she is auditing.The principle being followed is

Accepted Answer

A)  independence. 
B)  integrity. 
C)  objectivity. 
D)  due care. 
A)  independence. 
B)  integrity. 
C)  objectivity. 
D)  due care.

Question 12

Stockholders' equity of a corporation would not show

Accepted Answer

A)  retained earnings. 
B)  additional paid-in capital on stock issued. 
C)  the par value of stock issued. 
D)  revenues and expenses. 
A)  retained earnings. 
B)  additional paid-in capital on stock issued. 
C)  the par value of stock issued. 
D)  revenues and expenses.

Question 13

The heading for a balance sheet might include the line "As of December 31,20xx."

Accepted Answer

A) True 
 B)False

Question 14

Use the following information to calculate at,or for the year ended,December 31,2010,(a)net income,(b)retained earnings,(c)total assets,and (d)cash.

Accepted Answer

a.$20,000 - $4,000 - $2,000 = $14,000
b.

Question 15

Dividends are an example of an expense.

Accepted Answer

A) True 
 B)False

Question 16

Match between columns
                        Premises:  Common Stock
 Dividends
 Wages Expense
 Commissions Earned
 Buildings
 Accounts Payable
 Utilities Expense
 Beginning Retained Earnings
 Accounts Receivable
 Notes Payable

Accepted Answer

The Answer of income statement and balance sheet and Statement is...

Question 17

All of the following are considered nonexchange transactions except

Accepted Answer

A)  the day-by-day accumulation of interest. 
B)  the wear and tear on machinery. 
C)  the sale of goods and services. 
D)  losses from fire, flood, and theft. 
A)  the day-by-day accumulation of interest. 
B)  the wear and tear on machinery. 
C)  the sale of goods and services. 
D)  losses from fire, flood, and theft.

Question 18

Regulatory agencies are considered information users with an indirect financial interest.

Accepted Answer

A) True 
 B)False

Question 19

Flores Realty Corporation had the following balance sheet accounts and balances: $$\begin{array} { l c l r } 
\text { Accounts Payable } & \$ 6,000 & \text { Common Stock } & ? \
\text { Accounts Receivable } & 1,000 & \text { Equigment } & \$7 , 000 \
\text { Building } & ? & \text { Land } & 7,000 \
\text { Cash } & 3,000 & \text { Retained Earnings } & 2,000
\end{array}$$ If the balance of the Building account were $15,000 and if the equipment were sold for $7,000,what would be the total of stockholders' equity?

Accepted Answer

A)  $27,000 
B)  $16,000 
C)  $15,000 
D)  $33,000 
A)  $27,000 
B)  $16,000 
C)  $15,000 
D)  $33,000

Question 20

Accountants consider money the common unit of measure for all business transactions.

Accepted Answer

A) True 
 B)False

Exam 1: Uses of Accounting Information and the Financial Statements

Knowledge of the exchange rate is necessary to apply the money measure concept in case of international transactions.

The statement of cash flows would disclose the purchase of a building for cash

Financial accounting information is used primarily by management.

Which of the following is not a satisfactory statement of the accounting equation?

The declaration of a dividend will reduce net income.

One user of accounting information with an indirect financial interest in a business is

Responsibility for ethical financial reporting rests solely with the accountant.

The management of a corporation is responsible for electing the board of directors.

An auditor maintains no direct financial interest in the company he or she is auditing.The principle being followed is

Stockholders' equity of a corporation would not show

The heading for a balance sheet might include the line "As of December 31,20xx."

Use the following information to calculate at,or for the year ended,December 31,2010,(a)net income,(b)retained earnings,(c)total assets,and (d)cash.

Dividends are an example of an expense.

All of the following are considered nonexchange transactions except

Regulatory agencies are considered information users with an indirect financial interest.

Accountants consider money the common unit of measure for all business transactions.

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Contributed Capital

Investments

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

The Changing Business Environment - a Managers Perspective

Cost Concepts and Cost Allocation

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, incltarget Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

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