Question 1

An increase in expenses will have the effect of reducing stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 2

On the right side of the accounting equation are two types of claims against resources.Explain what they are and give an example of an item that would increase each.Which type of claim has priority?

Accepted Answer

The two types of claims against resource

Question 3

The audit committee is responsible for all of the following except

Accepted Answer

A) engaging the company's independent auditors. 
B) assuring that reliable accounting records are kept. 
C) auditing the company's financial statements. 
D) ascertaining that the company safeguards its resources. 
A) engaging the company's independent auditors. 
B) assuring that reliable accounting records are kept. 
C) auditing the company's financial statements. 
D) ascertaining that the company safeguards its resources.

Question 4

Fraudulent financial reporting at Enron resulted in

Accepted Answer

A) thousands of people losing their jobs. 
B) thousands of people losing their pensions and investment incomes. 
C) prison sentences and fines for corporate executives. 
D) all of these choices. 
A) thousands of people losing their jobs. 
B) thousands of people losing their pensions and investment incomes. 
C) prison sentences and fines for corporate executives. 
D) all of these choices.

Question 5

Sinoyianis Realty Company had the following balance sheet accounts and balances: 
 
-What is the total of liabilities and stockholders' equity?

Accepted Answer

A) $26,000 
B) $32,000 
C) $36,000 
D) $52,000 
A) $26,000 
B) $32,000 
C) $36,000 
D) $52,000

Question 6

Most business enterprises in the United States are

Accepted Answer

A) government units. 
B) partnerships. 
C) sole proprietorships. 
D) corporations. 
A) government units. 
B) partnerships. 
C) sole proprietorships. 
D) corporations.

Question 7

Sinoyianis Realty Company had the following balance sheet accounts and balances:   What is the balance of the Retained Earnings account?

Accepted Answer

A) $8,000 
B) $12,000 
C) $28,000 
D) $30,000 
A) $8,000 
B) $12,000 
C) $28,000 
D) $30,000

Question 8

Cash is another term for stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 9

Two major goals of business are to achieve profitability and to achieve liquidity.

Accepted Answer

A) True 
 B)False

Question 10

What is the responsibility of the independent auditor? Who is responsible for the content of the published financial statements?

Accepted Answer

The responsibility of the independent au

Question 11

Staff accountants express their duty to ensure financial reports are not false or misleading in the management report that appears as part of the company's annual report.

Accepted Answer

A) True 
 B)False

Question 12

The intentional preparation of misleading financial statements,known as fraudulent financial reporting,can result from all of the following except

Accepted Answer

A) the misapplication of accounting principles. 
B) the manipulation of inventory records. 
C) fictitious sales or orders. 
D) recording a revenue that has been earned but not yet received. 
A) the misapplication of accounting principles. 
B) the manipulation of inventory records. 
C) fictitious sales or orders. 
D) recording a revenue that has been earned but not yet received.

Question 13

Financial position may be assessed by referring to a balance sheet.

Accepted Answer

A) True 
 B)False

Question 14

A liability would not include an obligation to

Accepted Answer

A) transfer assets. 
B) hire an employee. 
C) pay cash. 
D) provide services. 
A) transfer assets. 
B) hire an employee. 
C) pay cash. 
D) provide services.

Question 15

A company's management information system is a subsystem of its accounting information system.

Accepted Answer

A) True 
 B)False

Question 16

Authorized shares of stock refer to the number of shares currently held by the stockholders.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is considered by accountants to be a separate entity from its owner(s)?

Accepted Answer

A) Partnership only 
B) Sole proprietorship only 
C) Corporation only 
D) Sole proprietorship,partnership,and corporation 
A) Partnership only 
B) Sole proprietorship only 
C) Corporation only 
D) Sole proprietorship,partnership,and corporation

Question 18

The personal assets and liabilities of an owner are not shown on the business's financial statements because of the

Accepted Answer

A) separate entity concept. 
B) sole proprietorship concept. 
C) financial position concept. 
D) objectivity concept. 
A) separate entity concept. 
B) sole proprietorship concept. 
C) financial position concept. 
D) objectivity concept.

Question 19

Which of the following assets could be described as nonphysical?

Accepted Answer

A) Inventory 
B) Cash 
C) Trademarks 
D) Supplies 
A) Inventory 
B) Cash 
C) Trademarks 
D) Supplies

Question 20

Which of the following accounts is not considered an asset?

Accepted Answer

A) Accounts Receivable 
B) Inventory 
C) Accounts Payable 
D) Trademark 
A) Accounts Receivable 
B) Inventory 
C) Accounts Payable 
D) Trademark

Exam 1: Uses of Accounting Information and the Financial Statements

An increase in expenses will have the effect of reducing stockholders' equity.

On the right side of the accounting equation are two types of claims against resources.Explain what they are and give an example of an item that would increase each.Which type of claim has priority?

The audit committee is responsible for all of the following except

Fraudulent financial reporting at Enron resulted in

Sinoyianis Realty Company had the following balance sheet accounts and balances: -What is the total of liabilities and stockholders' equity?

Most business enterprises in the United States are

Sinoyianis Realty Company had the following balance sheet accounts and balances: What is the balance of the Retained Earnings account?

Cash is another term for stockholders' equity.

Two major goals of business are to achieve profitability and to achieve liquidity.

What is the responsibility of the independent auditor? Who is responsible for the content of the published financial statements?

Staff accountants express their duty to ensure financial reports are not false or misleading in the management report that appears as part of the company's annual report.

The intentional preparation of misleading financial statements,known as fraudulent financial reporting,can result from all of the following except

Financial position may be assessed by referring to a balance sheet.

A liability would not include an obligation to

A company's management information system is a subsystem of its accounting information system.

Authorized shares of stock refer to the number of shares currently held by the stockholders.

Which of the following is considered by accountants to be a separate entity from its owner(s)?

The personal assets and liabilities of an owner are not shown on the business's financial statements because of the

Which of the following assets could be described as nonphysical?

Which of the following accounts is not considered an asset?

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

Filters