Question 1

Which of the following groups is not among the external users for whom financial statements are prepared?

Accepted Answer

A) Creditors. 
B) Regulators. 
C) Investors. 
D) Managers. 
A) Creditors. 
B) Regulators. 
C) Investors. 
D) Managers.

Question 2

Which of the following accounts appears in the statement of stockholders' equity?

Accepted Answer

A) Supplies. 
B) Cash. 
C) Salaries Payable. 
D) Retained Earnings. 
A) Supplies. 
B) Cash. 
C) Salaries Payable. 
D) Retained Earnings.

Question 3

Retained earnings represents the cumulative amount of net income earned over the life of the company that has not been distributed to stockholders as dividends.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is the correct order for preparing the financial statements?

Accepted Answer

A) Balance sheet,statement of stockholders' equity,and income statement. 
B) Balance sheet,income statement,and statement of stockholders' equity. 
C) Statement of stockholders' equity,income statement,and balance sheet. 
D) Income statement,statement of stockholders' equity,and balance sheet. 
A) Balance sheet,statement of stockholders' equity,and income statement. 
B) Balance sheet,income statement,and statement of stockholders' equity. 
C) Statement of stockholders' equity,income statement,and balance sheet. 
D) Income statement,statement of stockholders' equity,and balance sheet.

Question 5

Of the following,the most important objective for financial reporting is to provide information useful for:

Accepted Answer

A) Predicting cash flows. 
B) Determining taxable income. 
C) Providing accountability. 
D) Increasing future profits. 
A) Predicting cash flows. 
B) Determining taxable income. 
C) Providing accountability. 
D) Increasing future profits.

Question 6

Emmitt had the following final balances after the first year of operations: assets,$55,000;stockholders' equity,$25,000;dividends,$3,000;and net income,$10,000.What is the amount of Emmitt's liabilities?

Accepted Answer

A) $55,000. 
B) $30,000. 
C) $13,000. 
D) $7,000. 
A) $55,000. 
B) $30,000. 
C) $13,000. 
D) $7,000.

Question 7

If a company reports revenues of $17,000 and expenses of $12,000,then net income equals $5,000.

Accepted Answer

A) True 
 B)False

Question 8

GAAP is an abbreviation for:

Accepted Answer

A) Generally authorized accounting procedures. 
B) Generally applied accounting procedures. 
C) Generally accepted auditing practices. 
D) Generally accepted accounting principles. 
A) Generally authorized accounting procedures. 
B) Generally applied accounting procedures. 
C) Generally accepted auditing practices. 
D) Generally accepted accounting principles.

Question 9

The assumption that the assets and liabilities of the business are accounted for on the books of the company but not included in the records of the owner is the:

Accepted Answer

A) Monetary unit assumption. 
B) Economic entity assumption. 
C) Going concern assumption. 
D) Periodicity assumption. 
A) Monetary unit assumption. 
B) Economic entity assumption. 
C) Going concern assumption. 
D) Periodicity assumption.

Question 10

The rules of financial accounting are called Generally Accepted Accounting Principles (GAAP).

Accepted Answer

A) True 
 B)False

Question 11

The ending Retained Earnings balance of Boomer Inc.decreased by $1.0 million from the beginning of the year.The company declared a dividend of $5.4 million during the year.What was the net income earned during the year?

Accepted Answer

A) $7.5 million. 
B) $6.4 million. 
C) $4.4 million. 
D) $1.0 million. 
A) $7.5 million. 
B) $6.4 million. 
C) $4.4 million. 
D) $1.0 million.

Question 12

Operating cash flows generally include cash transactions for the purchase and sale of investments and productive long-term assets.

Accepted Answer

A) True 
 B)False

Question 13

For each transaction,indicate whether a company would classify the related account as an asset,liability,stockholders' equity,dividend,revenue,or expense.

Accepted Answer

1.Stockholders' equi

Question 14

Cash,inventory,supplies,and buildings are examples of liabilities.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following best explains the meaning of total stockholders' equity?

Accepted Answer

A) The difference between total revenues and total expenses,less dividends for the year. 
B) The amount of common stock less dividends over the life of the company. 
C) All revenues,expenses,and dividends over the life of the company. 
D) The amount of capital invested by stockholders plus profits retained over the life of the company. 
A) The difference between total revenues and total expenses,less dividends for the year. 
B) The amount of common stock less dividends over the life of the company. 
C) All revenues,expenses,and dividends over the life of the company. 
D) The amount of capital invested by stockholders plus profits retained over the life of the company.

Question 16

Riley Incorporated reports the following amounts at the end of the year:
   In addition,the company had common stock of $65,000 at the beginning of the year and issued an additional $5,000 during the year.The company also had retained earnings of $20,700 at the beginning of the year and paid dividends of $2,000 during the year.Prepare the income statement,statement of stockholders' equity,and balance sheet.

Accepted Answer

The answer of Riley Incorporated reports the following amounts at...

Question 17

Which one of the following statements regarding financial reports is correct?

Accepted Answer

A) The balance sheet classifies all assets according to operating,investing,and financing activities. 
B) The income statement is used to show that a company's resources equal claims to those resources. 
C) The statement of stockholders' equity updates the balances of common stock and retained earnings for related transactions during the year. 
D) The statement of cash flows shows cash inflows and outflows from operating activities only. 
A) The balance sheet classifies all assets according to operating,investing,and financing activities. 
B) The income statement is used to show that a company's resources equal claims to those resources. 
C) The statement of stockholders' equity updates the balances of common stock and retained earnings for related transactions during the year. 
D) The statement of cash flows shows cash inflows and outflows from operating activities only.

Question 18

Define accounting.Describe the two primary functions of financial accounting and its role in our society.

Accepted Answer

Accounting is "the language of business.

Question 19

Which of the following best describes revenue?

Accepted Answer

A) Resources of a company. 
B) Amounts earned from providing goods and services to a customer. 
C) Cash received from a customer. 
D) Dividends paid to stockholders. 
A) Resources of a company. 
B) Amounts earned from providing goods and services to a customer. 
C) Cash received from a customer. 
D) Dividends paid to stockholders.

Question 20

The costs of advertising,utilities,and salaries in the current reporting period are examples of liabilities.

Accepted Answer

A) True 
 B)False

Which of the following groups is not among the external users for whom financial statements are prepared?

Which of the following accounts appears in the statement of stockholders' equity?

Retained earnings represents the cumulative amount of net income earned over the life of the company that has not been distributed to stockholders as dividends.

Which of the following is the correct order for preparing the financial statements?

Of the following,the most important objective for financial reporting is to provide information useful for:

Emmitt had the following final balances after the first year of operations: assets,$55,000;stockholders' equity,$25,000;dividends,$3,000;and net income,$10,000.What is the amount of Emmitt's liabilities?

If a company reports revenues of $17,000 and expenses of $12,000,then net income equals $5,000.

GAAP is an abbreviation for:

The assumption that the assets and liabilities of the business are accounted for on the books of the company but not included in the records of the owner is the:

The rules of financial accounting are called Generally Accepted Accounting Principles (GAAP).

The ending Retained Earnings balance of Boomer Inc.decreased by $1.0 million from the beginning of the year.The company declared a dividend of $5.4 million during the year.What was the net income earned during the year?

Operating cash flows generally include cash transactions for the purchase and sale of investments and productive long-term assets.

For each transaction,indicate whether a company would classify the related account as an asset,liability,stockholders' equity,dividend,revenue,or expense.

Cash,inventory,supplies,and buildings are examples of liabilities.

Which of the following best explains the meaning of total stockholders' equity?

Which one of the following statements regarding financial reports is correct?

Define accounting.Describe the two primary functions of financial accounting and its role in our society.

Which of the following best describes revenue?

The costs of advertising,utilities,and salaries in the current reporting period are examples of liabilities.

The Accounting Cycle: During the Period

The Accounting Cycle: End of the Period

Cash and Internal Controls

Receivables and Sales

Inventory and Cost of Goods Sold

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

Time Value of Money

Investments

International Financial Reporting Standards

Filters

Exam 1: A Framework for Financial Accounting

Which of the following groups is not among the external users for whom financial statements are prepared?

Which of the following accounts appears in the statement of stockholders' equity?

Retained earnings represents the cumulative amount of net income earned over the life of the company that has not been distributed to stockholders as dividends.

Which of the following is the correct order for preparing the financial statements?

Of the following,the most important objective for financial reporting is to provide information useful for:

Emmitt had the following final balances after the first year of operations: assets,$55,000;stockholders' equity,$25,000;dividends,$3,000;and net income,$10,000.What is the amount of Emmitt's liabilities?

If a company reports revenues of $17,000 and expenses of $12,000,then net income equals $5,000.

GAAP is an abbreviation for:

The assumption that the assets and liabilities of the business are accounted for on the books of the company but not included in the records of the owner is the:

The rules of financial accounting are called Generally Accepted Accounting Principles (GAAP).

The ending Retained Earnings balance of Boomer Inc.decreased by $1.0 million from the beginning of the year.The company declared a dividend of $5.4 million during the year.What was the net income earned during the year?

Operating cash flows generally include cash transactions for the purchase and sale of investments and productive long-term assets.

For each transaction,indicate whether a company would classify the related account as an asset,liability,stockholders' equity,dividend,revenue,or expense.

Cash,inventory,supplies,and buildings are examples of liabilities.

Which of the following best explains the meaning of total stockholders' equity?

Which one of the following statements regarding financial reports is correct?

Define accounting.Describe the two primary functions of financial accounting and its role in our society.

Which of the following best describes revenue?

The costs of advertising,utilities,and salaries in the current reporting period are examples of liabilities.

The Accounting Cycle: During the Period

The Accounting Cycle: End of the Period

Cash and Internal Controls

Receivables and Sales

Inventory and Cost of Goods Sold

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

Time Value of Money

Investments

International Financial Reporting Standards

Filters