Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Net income can best be described as:

Accepted Answer

A) Net cash received by a company during the year. 
B) Revenues minus expenses. 
C) The amount of profits retained in a company for the year. 
A) Net cash received by a company during the year. 
B) Revenues minus expenses. 
C) The amount of profits retained in a company for the year.

Question 3

The term "cooking the books" refers to:

Accepted Answer

A) Purposely providing misleading financial information to investors and creditors. 
B) Hiring an auditor to provide independent verification of the fairness of financial statements. 
C) Filing all tax-related statements by the required deadline. 
A) Purposely providing misleading financial information to investors and creditors. 
B) Hiring an auditor to provide independent verification of the fairness of financial statements. 
C) Filing all tax-related statements by the required deadline.

Question 4

Which financial statement best reveals to investors and creditors information about a company's debt?

Accepted Answer

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

Question 5

The assumption that amounts are reported using a common scale (such as the dollar in the United States)is the:

Accepted Answer

A) Monetary unit assumption. 
B) Periodicity assumption. 
C) Economic entity assumption. 
A) Monetary unit assumption. 
B) Periodicity assumption. 
C) Economic entity assumption.

Question 6

In what order are the following financial statements prepared: (1)balance sheet, (2)income statement,and (3)statement of stockholders' equity?

Accepted Answer

A) 1,2,3. 
B) 3,2,1. 
C) 1,3,2. 
D) 2,3,1. 
A) 1,2,3. 
B) 3,2,1. 
C) 1,3,2. 
D) 2,3,1.

Question 7

Amounts owed to suppliers for supplies purchased on account are defined as a(n):

Accepted Answer

A) Revenue. 
B) Asset. 
C) Liability. 
A) Revenue. 
B) Asset. 
C) Liability.

Question 8

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 9

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

Accepted Answer

A) True 
 B)False

Question 10

DW has an ending Retained Earnings balance of $51,100.If during the year DW paid dividends of $4,300 and had net income of $22,500,then what was the beginning Retained Earnings balance?

Accepted Answer

A) $24,300. 
B) $32,900. 
C) $300. 
A) $24,300. 
B) $32,900. 
C) $300.

Question 11

The two categories of stockholders' equity usually found in the balance sheet of a corporation are:

Accepted Answer

A) Common stock and liabilities. 
B) Assets and liabilities. 
C) Common stock and retained earnings. 
A) Common stock and liabilities. 
B) Assets and liabilities. 
C) Common stock and retained earnings.

Question 12

Which business form has the advantage of limited liability?

Accepted Answer

A) Corporation. 
B) Sole proprietorship. 
C) Partnership. 
A) Corporation. 
B) Sole proprietorship. 
C) Partnership.

Question 13

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

Question 14

Financial accounting does not deal with which of the following?

Accepted Answer

A) Measuring a company's economic activity. 
B) Providing information to internal users. 
C) Preparing financial reports. 
A) Measuring a company's economic activity. 
B) Providing information to internal users. 
C) Preparing financial reports.

Question 15

Use the following appropriate amounts to calculate net income: Revenues,$12,000;Liabilities,$5,000;Expenses,$4,000;Assets,$19,000;Dividends,$4,000.

Accepted Answer

A) $6,000. 
B) $8,000. 
C) $4,000. 
A) $6,000. 
B) $8,000. 
C) $4,000.

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

Net income can best be described as:

The term "cooking the books" refers to:

Which financial statement best reveals to investors and creditors information about a company's debt?

The assumption that amounts are reported using a common scale (such as the dollar in the United States)is the:

In what order are the following financial statements prepared: (1)balance sheet, (2)income statement,and (3)statement of stockholders' equity?

Amounts owed to suppliers for supplies purchased on account are defined as a(n):

Constraints on qualitative characteristics of accounting information include:

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

DW has an ending Retained Earnings balance of $51,100.If during the year DW paid dividends of $4,300 and had net income of $22,500,then what was the beginning Retained Earnings balance?

The two categories of stockholders' equity usually found in the balance sheet of a corporation are:

Which business form has the advantage of limited liability?

The equation best describing the balance sheet is:

Financial accounting does not deal with which of the following?

Use the following appropriate amounts to calculate net income: Revenues,$12,000;Liabilities,$5,000;Expenses,$4,000;Assets,$19,000;Dividends,$4,000.

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

Exam 1: A Framework for Financial Accounting

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

Net income can best be described as:

The term "cooking the books" refers to:

Which financial statement best reveals to investors and creditors information about a company's debt?

The assumption that amounts are reported using a common scale (such as the dollar in the United States)is the:

In what order are the following financial statements prepared: (1)balance sheet, (2)income statement,and (3)statement of stockholders' equity?

Amounts owed to suppliers for supplies purchased on account are defined as a(n):

Constraints on qualitative characteristics of accounting information include:

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

DW has an ending Retained Earnings balance of $51,100.If during the year DW paid dividends of $4,300 and had net income of $22,500,then what was the beginning Retained Earnings balance?

The two categories of stockholders' equity usually found in the balance sheet of a corporation are:

Which business form has the advantage of limited liability?

The equation best describing the balance sheet is:

Financial accounting does not deal with which of the following?

Use the following appropriate amounts to calculate net income: Revenues,$12,000;Liabilities,$5,000;Expenses,$4,000;Assets,$19,000;Dividends,$4,000.

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