Question 1

The balance sheet depicts which of the following equations?

Accepted Answer

A) Net income = revenue − expenses. 
B) Ending retained earnings = beginning retained earnings + net income − dividends. 
C) Assets = liabilities + stockholders' equity. 
D) Net cash flows = total cash inflows − total cash outflows. 
A) Net income = revenue − expenses. 
B) Ending retained earnings = beginning retained earnings + net income − dividends. 
C) Assets = liabilities + stockholders' equity. 
D) Net cash flows = total cash inflows − total cash outflows.

Question 2

Transactions related to the primary business activities of the company,such as selling goods and services to customers,are referred to as:

Accepted Answer

A) Investing activities. 
B) Operating activities. 
C) Management activities. 
D) Financing activities. 
A) Investing activities. 
B) Operating activities. 
C) Management activities. 
D) Financing activities.

Question 3

The financial statement that represents the accounting equation is the:

Accepted Answer

A) Income statement. 
B) Statement of cash flows. 
C) Balance sheet. 
D) Statement of stockholders' equity. 
A) Income statement. 
B) Statement of cash flows. 
C) Balance sheet. 
D) Statement of stockholders' equity.

Question 4

How many of the following transactions are operating activities? Borrowed $50,000 from the bank
Purchased $12,000 in supplies
Provide services to customers for $27,000
Paid the utility bill of $750
Purchased a delivery truck for $12,000
Received $25,000 from issuing common stock

Accepted Answer

A) One. 
B) Two. 
C) Three. 
D) Four. 
A) One. 
B) Two. 
C) Three. 
D) Four.

Question 5

The conceptual framework's qualitative characteristic of relevance includes:

Accepted Answer

A) Predictive value. 
B) Verifiability. 
C) Completeness. 
D) Neutrality. 
A) Predictive value. 
B) Verifiability. 
C) Completeness. 
D) Neutrality.

Question 6

Constraints on qualitative characteristics of accounting information include:

Accepted Answer

A) Freedom from material error. 
B) Going concern. 
C) Neutrality. 
D) Cost effectiveness. 
A) Freedom from material error. 
B) Going concern. 
C) Neutrality. 
D) Cost effectiveness.

Question 7

Fundamental qualitative characteristics of accounting information are:

Accepted Answer

A) Relevance and comparability. 
B) Comparability and consistency. 
C) Faithful representation and relevance. 
D) Faithful representation and consistency. 
A) Relevance and comparability. 
B) Comparability and consistency. 
C) Faithful representation and relevance. 
D) Faithful representation and consistency.

Question 8

Which of the following financial statements reports a company's retained earnings?

Accepted Answer

A) Income statement. 
B) Balance sheet. 
C) Statement of cash flows. 
D) All of the other answers are correct. 
A) Income statement. 
B) Balance sheet. 
C) Statement of cash flows. 
D) All of the other answers are correct.

Question 9

The equation best describing the balance sheet is:

Accepted Answer

A) Assets = Liabilities + Stockholders' Equity. 
B) Revenues
Expenses = Net Income. 
C) Ending Retained Earnings + Dividends = Net Income. 
D) Revenues + Expenses = Net Income. 
A) Assets = Liabilities + Stockholders' Equity. 
B) Revenues
Expenses = Net Income. 
C) Ending Retained Earnings + Dividends = Net Income. 
D) Revenues + Expenses = Net Income.

Question 10

In general,if a company's net income is increasing,so will its stock price.

Accepted Answer

A) True 
 B)False

Question 11

The 1933 Securities Act and the 1934 Securities Exchange Act were designed to restore investor confidence in financial accounting following the stock market crash in 1929.

Accepted Answer

A) True 
 B)False

Question 12

The accounts that represent resources owed to creditors are called:

Accepted Answer

A) Assets. 
B) Liabilities. 
C) Dividends. 
D) Stockholders' equity. 
A) Assets. 
B) Liabilities. 
C) Dividends. 
D) Stockholders' equity.

Question 13

Enhancing qualitative characteristics of accounting information include:

Accepted Answer

A) Relevance and comparability. 
B) Comparability and consistency. 
C) Faithful representation and relevance. 
D) Cost effectiveness and materiality. 
A) Relevance and comparability. 
B) Comparability and consistency. 
C) Faithful representation and relevance. 
D) Cost effectiveness and materiality.

Question 14

Consider the following account balances of the Shattuck Law Firm at the end of the year:   How many of these accounts would appear in Shattuck's year-end balance sheet?

Accepted Answer

A) Five. 
B) Four. 
C) Three. 
D) Two. 
A) Five. 
B) Four. 
C) Three. 
D) Two.

Question 15

Below are typical transactions for a company.Indicate whether each transaction is classified as a financing,investing,or operating activity.

Accepted Answer

1.Financing;2.Operating;3.Oper

Question 16

The conceptual framework's qualitative characteristic of faithful representation includes:

Accepted Answer

A) Predictive value. 
B) Neutrality. 
C) Confirmatory value. 
D) Comparability. 
A) Predictive value. 
B) Neutrality. 
C) Confirmatory value. 
D) Comparability.

Question 17

Which of the following statements regarding financial reports is not correct?

Accepted Answer

A) A balance sheet contains assets,liabilities,and stockholders' equity information. 
B) An income statement shows revenues and expenses. 
C) A statement of stockholders' equity reports revenues,net income,and dividends information. 
D) A statement of cash flows shows cash inflows and outflows from operating,investing,and financing activities. 
A) A balance sheet contains assets,liabilities,and stockholders' equity information. 
B) An income statement shows revenues and expenses. 
C) A statement of stockholders' equity reports revenues,net income,and dividends information. 
D) A statement of cash flows shows cash inflows and outflows from operating,investing,and financing activities.

Question 18

Accounting information that does not provide measurement bias in favor of a particular set of companies has the characteristic of:

Accepted Answer

A) Relevance. 
B) Consistency. 
C) Materiality. 
D) Neutrality. 
A) Relevance. 
B) Consistency. 
C) Materiality. 
D) Neutrality.

Question 19

Which of the following items would not appear in an income statement?

Accepted Answer

A) Salaries expense. 
B) Advertising expense. 
C) Service revenue. 
D) Cash. 
A) Salaries expense. 
B) Advertising expense. 
C) Service revenue. 
D) Cash.

Question 20

Accounting information is used by investors to decide whether to invest in a company's stock.

Accepted Answer

A) True 
 B)False

The balance sheet depicts which of the following equations?

Transactions related to the primary business activities of the company,such as selling goods and services to customers,are referred to as:

The financial statement that represents the accounting equation is the:

How many of the following transactions are operating activities? Borrowed $50,000 from the bank Purchased $12,000 in supplies Provide services to customers for $27,000 Paid the utility bill of $750 Purchased a delivery truck for $12,000 Received $25,000 from issuing common stock

The conceptual framework's qualitative characteristic of relevance includes:

Constraints on qualitative characteristics of accounting information include:

Fundamental qualitative characteristics of accounting information are:

Which of the following financial statements reports a company's retained earnings?

The equation best describing the balance sheet is:

In general,if a company's net income is increasing,so will its stock price.

The 1933 Securities Act and the 1934 Securities Exchange Act were designed to restore investor confidence in financial accounting following the stock market crash in 1929.

The accounts that represent resources owed to creditors are called:

Enhancing qualitative characteristics of accounting information include:

Consider the following account balances of the Shattuck Law Firm at the end of the year: How many of these accounts would appear in Shattuck's year-end balance sheet?

Below are typical transactions for a company.Indicate whether each transaction is classified as a financing,investing,or operating activity.

The conceptual framework's qualitative characteristic of faithful representation includes:

Which of the following statements regarding financial reports is not correct?

Accounting information that does not provide measurement bias in favor of a particular set of companies has the characteristic of:

Which of the following items would not appear in an income statement?

Accounting information is used by investors to decide whether to invest in a company's stock.

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

The balance sheet depicts which of the following equations?

Transactions related to the primary business activities of the company,such as selling goods and services to customers,are referred to as:

The financial statement that represents the accounting equation is the:

How many of the following transactions are operating activities? Borrowed $50,000 from the bank Purchased $12,000 in supplies Provide services to customers for $27,000 Paid the utility bill of $750 Purchased a delivery truck for $12,000 Received $25,000 from issuing common stock

The conceptual framework's qualitative characteristic of relevance includes:

Constraints on qualitative characteristics of accounting information include:

Fundamental qualitative characteristics of accounting information are:

Which of the following financial statements reports a company's retained earnings?

The equation best describing the balance sheet is:

In general,if a company's net income is increasing,so will its stock price.

The 1933 Securities Act and the 1934 Securities Exchange Act were designed to restore investor confidence in financial accounting following the stock market crash in 1929.

The accounts that represent resources owed to creditors are called:

Enhancing qualitative characteristics of accounting information include:

Consider the following account balances of the Shattuck Law Firm at the end of the year: How many of these accounts would appear in Shattuck's year-end balance sheet?

Below are typical transactions for a company.Indicate whether each transaction is classified as a financing,investing,or operating activity.

The conceptual framework's qualitative characteristic of faithful representation includes:

Which of the following statements regarding financial reports is not correct?

Accounting information that does not provide measurement bias in favor of a particular set of companies has the characteristic of:

Which of the following items would not appear in an income statement?

Accounting information is used by investors to decide whether to invest in a company's stock.

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