Question 1

The following are examples of external users of accounting information except

Accepted Answer

A)  government 
B)  customers 
C)  creditors 
D)  managers 
A)  government 
B)  customers 
C)  creditors 
D)  managers

Question 2

If a corporation had net income of $60,000 and $20,000 in cash dividends were declared and paid then the retained earnings account would increase by $40,000.

Accepted Answer

A) True 
 B)False

Question 3

Transactions affecting stockholders' equity include

Accepted Answer

A)  shares of capital stock issued to stockholders and payment of liabilities 
B)  shares of capital stock issued to stockholders, dividends declared and paid to stockholders, revenues, and expenses 
C)  shares of capital stock issued to stockholders, revenues, expenses, and collection of accounts receivable 
D)  dividends declared and paid to stockholders, revenues, expenses, and purchases of supplies on account 
A)  shares of capital stock issued to stockholders and payment of liabilities 
B)  shares of capital stock issued to stockholders, dividends declared and paid to stockholders, revenues, and expenses 
C)  shares of capital stock issued to stockholders, revenues, expenses, and collection of accounts receivable 
D)  dividends declared and paid to stockholders, revenues, expenses, and purchases of supplies on account

Question 4

Owners' rights to assets rank ahead of creditors' rights to assets.

Accepted Answer

A) True 
 B)False

Question 5

Given below are the accounts and amounts for Bright Futures Company as of August 31, 2011. All of the revenue and expense amounts are for the month of August.
 $\begin{array}{ll}
\text { Telephone Expense } & \$ 1,150 \
\text { Cash } & 3,000 \
\text { AccountsPayable } & 1,540 \
\text { Dividends } & 800 \
\text { FeesEarned } & 15,700 \
\text { Rent Expense } & 1,400 \
\text { Supplies } & 140 \
\text { Accounts Receivable } & 1,500 \
\text { Computer Equipment } & 20,000 \
\text { Capital Stock } & 10,000 \
\text { WagesExpense } & 4,800 \
\text { Utilities Expense } & 750 \
\text { Notes Payable } & 2,400 \
\text { Retained Earnings } & 4,320 \
\text { Office Expense } & 420
\end{array}$ Based on the data provided for Bright Futures Company, prepare in good format a balance sheet as of August 31, 2011.

Accepted Answer

The answer of Given below are the accounts and amounts...

Question 6

Ramos Repair Company paid $750 in dividends to its stockholders. How does this transaction affect Ramos Repair Company's accounting equation?

Accepted Answer

A)  Increase Assets (Accounts Receivable) and decrease Assets (Cash) 
B)  Decrease Assets (Cash) and decrease Stockholders' Equity (Dividends) 
C)  Decrease Assets (Cash) and decrease Liabilities (Accounts Payable) 
D)  Increase Assets (Cash) and decrease Stockholders' Equity (Dividends) 
A)  Increase Assets (Accounts Receivable) and decrease Assets (Cash) 
B)  Decrease Assets (Cash) and decrease Stockholders' Equity (Dividends) 
C)  Decrease Assets (Cash) and decrease Liabilities (Accounts Payable) 
D)  Increase Assets (Cash) and decrease Stockholders' Equity (Dividends)

Question 7

The total assets and total liabilities of Paul's Pools, a corporation, at the beginning and at the end of the current fiscal year are as follows:

Accepted Answer

The answer of The total assets and total liabilities of...

Question 8

Revenue is earned only when money is received.

Accepted Answer

A) True 
 B)False

Question 9

Debts owed by a business are referred to as

Accepted Answer

A)  accounts receivables 
B)  assets 
C)  stockholder's equity 
D)  liabilities 
A)  accounts receivables 
B)  assets 
C)  stockholder's equity 
D)  liabilities

Question 10

Managerial accounting information is used by external and internal users equally.

Accepted Answer

A) True 
 B)False

Question 11

Proper ethical conduct implies that you only consider what's in your best interest.

Accepted Answer

A) True 
 B)False

Question 12

Cash investments made by stockholders in exchange for capital stock in a business are reported on the statement of cash flows in the

Accepted Answer

A)  financing activities section 
B)  investing activities section 
C)  operating activities section 
D)  supplemental statement 
A)  financing activities section 
B)  investing activities section 
C)  operating activities section 
D)  supplemental statement

Question 13

The assets and liabilities of S&P Day Spa at December 31, 2014 and expenses for the year are listed below. The retained earnings balance was $68,000 at January 1, 2014.
   Prepare a retained earnings statement for the current year ended December 31, 2014.

Accepted Answer

The answer of The assets and liabilities of S&P Day...

Question 14

No significant differences exist between the accounting standards issued by the FASB and the IASB.

Accepted Answer

A) True 
 B)False

Question 15

The statement of cash flows consists of three sections: cash flows from operating activities, cash flows from income activities, and cash flows from equity activities.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not a general-purpose financial statement?

Accepted Answer

A)  balance sheet 
B)  income statement 
C)  retained earnings statement 
D)  cash budget 
A)  balance sheet 
B)  income statement 
C)  retained earnings statement 
D)  cash budget

Question 17

If stockholders wanted to know how money flowed into and out of the company, what financial statement would they use?

Accepted Answer

A)  income statement 
B)  statement of cash flows 
C)  balance sheet 
D)  none of these 
A)  income statement 
B)  statement of cash flows 
C)  balance sheet 
D)  none of these

Question 18

Company G has a ratio of liabilities to stockholders' equity of 0.12 and 0.28 for 2010 and 2011, respectively. In contrast, Company M has a ratio of liabilities to stockholders' equity of 1.13 and 1.29 for the same period.
REQUIRED:
Based on this information, which company's creditors are more at risk and why? Should the creditors of either company fear the risk of nonpayment?

Accepted Answer

Company M's creditors are more at risk t

Question 19

The basic difference between manufacturing and merchandising companies is the completion level of the products they purchase for resale to customers.

Accepted Answer

A) True 
 B)False

Question 20

Cash dividends paid to stockholders decrease assets and increase equity.

Accepted Answer

A) True 
 B)False

Exam 1: Introduction to Accounting and Business

The following are examples of external users of accounting information except

If a corporation had net income of $60,000 and $20,000 in cash dividends were declared and paid then the retained earnings account would increase by $40,000.

Transactions affecting stockholders' equity include

Owners' rights to assets rank ahead of creditors' rights to assets.

Ramos Repair Company paid $750 in dividends to its stockholders. How does this transaction affect Ramos Repair Company's accounting equation?

The total assets and total liabilities of Paul's Pools, a corporation, at the beginning and at the end of the current fiscal year are as follows:

Revenue is earned only when money is received.

Debts owed by a business are referred to as

Managerial accounting information is used by external and internal users equally.

Proper ethical conduct implies that you only consider what's in your best interest.

Cash investments made by stockholders in exchange for capital stock in a business are reported on the statement of cash flows in the

The assets and liabilities of S&P Day Spa at December 31, 2014 and expenses for the year are listed below. The retained earnings balance was $68,000 at January 1, 2014. Prepare a retained earnings statement for the current year ended December 31, 2014.

No significant differences exist between the accounting standards issued by the FASB and the IASB.

The statement of cash flows consists of three sections: cash flows from operating activities, cash flows from income activities, and cash flows from equity activities.

Which of the following is not a general-purpose financial statement?

If stockholders wanted to know how money flowed into and out of the company, what financial statement would they use?

The basic difference between manufacturing and merchandising companies is the completion level of the products they purchase for resale to customers.

Cash dividends paid to stockholders decrease assets and increase equity.

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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