Question 1

Financial accounting and reporting standards in the United States are established primarily by the Financial Accounting Standards Board (FASB).

Accepted Answer

A) True 
 B)False

Question 2

The primary functions of financial accounting are to measure business activities of a company and to communicate those measurements to internal parties for decision-making purposes.Financial accounting primarily serves to provide information to external parties.

Accepted Answer

A) True 
 B)False

Question 3

The costs of providing goods and services to customers are referred to as:

Accepted Answer

A) Assets. 
B) Expenses. 
C) Liabilities. 
A) Assets. 
B) Expenses. 
C) Liabilities.

Question 4

The difference between revenues and expenses is referred to as net income or net loss.

Accepted Answer

A) True 
 B)False

Question 5

Dividends represent:

Accepted Answer

A) Resources of the company. 
B) Cash payments to stockholders. 
C) Amounts owed to creditors. 
A) Resources of the company. 
B) Cash payments to stockholders. 
C) Amounts owed to creditors.

Question 6

The accounting equation is defined as:

Accepted Answer

A) Assets = Liabilities + Stockholders' Equity. 
B) Assets = Liabilities - Stockholders' Equity. 
C) Net Income = Revenues - Expenses. 
A) Assets = Liabilities + Stockholders' Equity. 
B) Assets = Liabilities - Stockholders' Equity. 
C) Net Income = Revenues - Expenses.

Question 7

Which financial statement is typically prepared first?

Accepted Answer

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

Question 8

The balance sheet is a financial statement that reports the company's revenues and expenses over an interval of time.The income statement reports revenues and expenses.

Accepted Answer

A) True 
 B)False

Question 9

Any transaction that affects the income statement ultimately affects the balance sheet through the balance of retained earnings.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Operating activities include transactions that relate to the primary operations of the company.

Accepted Answer

A) True 
 B)False

Question 12

Enhancing qualitative characteristics of accounting information include:

Accepted Answer

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

Question 13

If total assets of a company equal $12,000 and total stockholders' equity equals $4,000,then total liabilities equal $8,000.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not a balance sheet item?

Accepted Answer

A) Assets. 
B) Common stock. 
C) Retained earnings. 
D) Revenues. 
A) Assets. 
B) Common stock. 
C) Retained earnings. 
D) Revenues.

Question 15

Aikman Company has paid dividends of $2,410,$0,$1,570 and $1,060 over the first four years of the company's existence.If Retained Earnings after year four has an ending balance of $9,700,what is the average annual amount of net income (loss)over the past four years for Aikman?

Accepted Answer

A) $3,685. 
B) $14,740. 
C) $840. 
A) $3,685. 
B) $14,740. 
C) $840.

Question 16

Liabilities are shown in which of the following statements?

Accepted Answer

A) Income statement. 
B) Statement of cash flows. 
C) Balance sheet. 
A) Income statement. 
B) Statement of cash flows. 
C) Balance sheet.

Question 17

Common stock represents an external source of stockholders' equity,whereas retained earnings represents an internal source.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following does not represent an asset of a company?

Accepted Answer

A) Supplies held by the company. 
B) Amounts owed to suppliers. 
C) Equipment owned and used for operations. 
A) Supplies held by the company. 
B) Amounts owed to suppliers. 
C) Equipment owned and used for operations.

Question 19

Financing activities include:

Accepted Answer

A) The purchase of a building. 
B) Issuing common stock to stockholders. 
C) Transactions with company employees. 
A) The purchase of a building. 
B) Issuing common stock to stockholders. 
C) Transactions with company employees.

Question 20

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

Accepted Answer

A) True 
 B)False

Financial accounting and reporting standards in the United States are established primarily by the Financial Accounting Standards Board (FASB).

The primary functions of financial accounting are to measure business activities of a company and to communicate those measurements to internal parties for decision-making purposes.Financial accounting primarily serves to provide information to external parties.

The costs of providing goods and services to customers are referred to as:

The difference between revenues and expenses is referred to as net income or net loss.

Dividends represent:

The accounting equation is defined as:

Which financial statement is typically prepared first?

The balance sheet is a financial statement that reports the company's revenues and expenses over an interval of time.The income statement reports revenues and expenses.

Any transaction that affects the income statement ultimately affects the balance sheet through the balance of retained earnings.

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

Operating activities include transactions that relate to the primary operations of the company.

Enhancing qualitative characteristics of accounting information include:

If total assets of a company equal $12,000 and total stockholders' equity equals $4,000,then total liabilities equal $8,000.

Which of the following is not a balance sheet item?

Aikman Company has paid dividends of $2,410,$0,$1,570 and $1,060 over the first four years of the company's existence.If Retained Earnings after year four has an ending balance of $9,700,what is the average annual amount of net income (loss)over the past four years for Aikman?

Liabilities are shown in which of the following statements?

Common stock represents an external source of stockholders' equity,whereas retained earnings represents an internal source.

Which of the following does not represent an asset of a company?

Financing activities include:

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

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

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Exam 1: A Framework for Financial Accounting

Financial accounting and reporting standards in the United States are established primarily by the Financial Accounting Standards Board (FASB).

The primary functions of financial accounting are to measure business activities of a company and to communicate those measurements to internal parties for decision-making purposes.Financial accounting primarily serves to provide information to external parties.

The costs of providing goods and services to customers are referred to as:

The difference between revenues and expenses is referred to as net income or net loss.

Dividends represent:

The accounting equation is defined as:

Which financial statement is typically prepared first?

The balance sheet is a financial statement that reports the company's revenues and expenses over an interval of time.The income statement reports revenues and expenses.

Any transaction that affects the income statement ultimately affects the balance sheet through the balance of retained earnings.

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

Operating activities include transactions that relate to the primary operations of the company.

Enhancing qualitative characteristics of accounting information include:

If total assets of a company equal $12,000 and total stockholders' equity equals $4,000,then total liabilities equal $8,000.

Which of the following is not a balance sheet item?

Aikman Company has paid dividends of $2,410,$0,$1,570 and $1,060 over the first four years of the company's existence.If Retained Earnings after year four has an ending balance of $9,700,what is the average annual amount of net income (loss)over the past four years for Aikman?

Liabilities are shown in which of the following statements?

Common stock represents an external source of stockholders' equity,whereas retained earnings represents an internal source.

Which of the following does not represent an asset of a company?

Financing activities include:

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

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

Filters