1.
Decreases in retained earnings that represent costs of assets or services that
are used to earn revenues are called:
A) Contributed Capital
B) Expenses
C) Withdrawals
D) Equity
E) Liabilities
2.
Revenues are:
A) Increases in retained earnings from a company's earning activities
B) Resources owned or controlled by a company
C) The costs of assets or services used
D) The same as net income
E) The excess of expenses over assets
3.
A corporation:
A) Is a legal entity separate and distinct from its owners
B) Has shareholders who have unlimited liability for the acts of the corporation
C) Must have many owners
D) Is the same as a limited liability partnership
E) Does not have to pay taxes
4.
The first section of the income statement reports cash from operations.
A) True
B) False
5.
Beginning Assets were $437,600, Beginning Liabilities were $262,560, Common
Stock sold during the year totaled $45,000, Revenue for the year was $414,250,
Expenses for the year were $280,000, Dividends declared was $22,700, and Ending
Liabilities is $350,000.
What is Net Income for the year?
A) $612,560
B) $134,250
C) $331,590
D) $700,160
E) $175,040
6.
Ending Liabilities are 67,000, Beginning Equity was $87,000, Common Stock sold
during year totaled $31,000, Expenses for the year were $22,000, Dividends
declared totaled $13,000, Ending Equity for the year is $181,000 and Beginning
Assets for the year were $222,000.
What was Beginning Liabilities for the year?
A) $212,000
B) $155,000
C) $154,000
D) $135,000
E) $248,000
7.
Accounts payable appear on which of the following statements?
A) Income statement
B) Statement of cash flows
C) Transaction statement
D) Balance sheet
E) Statement of retained earnings
8.
Which of the following statements is not true about assets?
A) They appear on the balance sheet
B) They are economic resources owned or controlled by the business
C) They are expected to provide future benefits to the business
D) They appear on the statement of retained earnings
E) Claims on them are shared between creditors and owners
9.
Managerial accounting is an area of accounting that provides internal reports to
assist the decision making needs of internal users.
A) True
B) False
10.
To include the personal assets and transactions of a business's owner in the
records and reports of the business would be in conflict with the:
A) Revenue recognition principle
B) Going-concern principle
C) Objectivity principle
D) Realization principle
E) Business entity principle
11.
Below is accounting information for Cascade Company for 2010:
What was Total Equity for the year?
A) $116,000
B) $457,000
C) $316,000
D) $296,000
E) $320,000
12.
The area of accounting aimed at serving the decision making needs of internal
users is:
A) Governmental accounting
B) External auditing
C) SEC reporting
D) Managerial accounting
E) Financial accounting
13.
Which of the following elements are found on the income statement?
A) Retained Earnings
B) Salaries Expense
C) Accounts Receivable
D) Common Stock
E) Cash
14.
Revenues are increases in retained earnings from a company's earnings
activities.
A) True
B) False
15.
How would the accounting equation of Boston Company be affected by the billing
of a client for $10,000 of consulting work completed?
A) + $10,000 accounts receivable, + $10,000 cash
B) + $10,000 accounts receivable, + $10,000 accounts payable
C) + $10,000 accounts receivable, -$10,000 consulting revenue
D) + $10,000 accounts receivable, -$10,000 accounts payable
E) + $10,000 accounts receivable, + $10,000 consulting revenue
16.
The International Accounting Standards Board (IASB) is the government group that
establishes reporting requirements for companies that issue stock to the public.
A) True
B) False
17.
Assets are the resources owned or controlled by a business.
A) True
B) False
18.
Acme Company had equity of $55,000 at the end of the current year. During the
year the company had a $2,000 net loss and investments by owners in exchange for
stock of $7,000. Compute equity as of the beginning of the year.
A) $64,000
B) $50,000
C) $52,000
D) $46,000
E) $5,000
19.
Internal users of accounting information include lenders, shareholders, brokers
and managers.
A) True
B) False
20.
An exchange of value between two entities is called:
A) A business transaction
B) Recordkeeping or bookkeeping
C) The accounting equation
D) Net Income
E) An asset
21.
The legitimate claims of a business's creditors take precedence over the claims
of its stockholders.
A) True
B) False
22.
Investing activities are the acquiring and selling of resources that an
organization uses in its everyday operations.
A) True
B) False
23.
Owner's investments and dividends are reported on the income statement.
A) True
B) False
24.
If the liabilities of a business increased $75,000 during a period of time and
the equity in the business decreased $30,000 during the same period, the assets
of the business must have:
A) Increased $45,000
B) Decreased $45,000
C) Increased $105,000
D) Decreased $105,000
E) Increased $30,000
25.
A company reported total equity of $145,000 on its December 31, 2008, balance
sheet. The following information is available for the year ended December 31,
2009:
What are the total assets of the company at December 31, 2009?
A) $92,000
B) $45,000
C) $282,000
D) $210,000
E) $190,000
26.
Congress passed the Sarbanes-Oxley Act to
A) Help curb financial abuses at companies that issue their stock to the public
B) Provide jobs to U.S. accountants and limit the number of jobs sent outside
the country
C) Require that all companies publicly disclose their internal control plans
D) Impose penalties on CEO's and CFO's who knowingly sign off on bogus
accounting reports, although at this time the penalties are token amounts
E) Force auditors to attest to the absolute accuracy of the financial statements
27.
The income statement shows the financial position of a business on a specific
date.
A) True
B) False
28.
The primary objective of financial accounting is to provide general-purpose
financial statements to help external users analyze and interpret an
organization's activities.
A) True
B) False
29.
A balance sheet lists:
A) The assets and liabilities of a company, but not the equity
B) Only the information about what happened to retained earnings during a time
period
C) The cash inflows and outflows during the period
D) The types and amounts of the revenues and expenses of a business
E) The types and amounts of assets, liabilities and equity of a business as of a
specific date
30.
Fast-Forward has beginning equity of $257,000, net income of $51,000, dividends
of $40,000 and investments by owners in exchange for stock of $6,000. Its ending
equity is:
A) $208,000
B) $240,000
C) $223,000
D) $274,000
E) $268,000
31.
Expenses decrease retained earnings and are the costs acquired to earn revenues.
A) True
B) False
32.
Bookkeeping is the sole purpose of accounting.
A) True
B) False
33.
The four basic financial statements include the balance sheet, income statement,
statement of retained earnings and statement of cash flows.
A) True
B) False
34.
Accounting is one way important information about businesses are reported to
decision makers.
A) True
B) False
35.
Another name for equity is:
A) Expenses
B) Net income
C) Net loss
D) Revenue
E) Net assets
36.
Fast-Forward had cash inflows from operations of $62,500; cash outflows from
investing activities of $47,000; and cash inflows from financing of $25,000. The
net change in cash was:
A) $134,500 decrease
B) $9,500 increase
C) $40,500 decrease
D) $134,000 increase
E) $40,500 increase
Show Answers
1.
Decreases in retained earnings that represent costs of
assets or services that are used to earn revenues are called:
B) Expenses
2.
Revenues are:
A) Increases in
retained earnings from a company's earning activities
3.
A corporation:
A) Is a legal entity
separate and distinct from its owners
4.
The first section of the income statement reports cash
from operations.
A) True
5.
Beginning Assets were $437,600, Beginning Liabilities
were $262,560, Common Stock sold during the year totaled $45,000, Revenue
for the year was $414,250, Expenses for the year were $280,000, Dividends
declared was $22,700, and Ending Liabilities is $350,000.
What is Net Income for the year?
B) $134,250
6.
Ending Liabilities are 67,000, Beginning Equity was
$87,000, Common Stock sold during year totaled $31,000, Expenses for the
year were $22,000, Dividends declared totaled $13,000, Ending Equity for the
year is $181,000 and Beginning Assets for the year were $222,000.
What was Beginning Liabilities for the year?
E) $248,000
7.
Accounts payable appear on which of the following
statements?
D) Balance sheet
8.
Which of the following statements is not true about
assets?
D) They appear on the
statement of retained earnings
9.
Managerial accounting is an area of accounting that
provides internal reports to assist the decision making needs of internal
users.
A) True
10.
To include the personal assets and transactions of a
business's owner in the records and reports of the business would be in
conflict with the:
E) Business entity
principle
11.
Below is accounting information for Cascade Company for
2010:
What was Total Equity for the year?
C) $316,000
12.
The area of accounting aimed at serving the decision
making needs of internal users is:
D) Managerial
accounting
13.
Which of the following elements are found on the income
statement?
B) Salaries Expense
14.
Revenues are increases in retained earnings from a
company's earnings activities.
A) True
15.
How would the accounting equation of Boston Company be
affected by the billing of a client for $10,000 of consulting work
completed?
E) + $10,000 accounts
receivable, + $10,000 consulting revenue
16.
The International Accounting Standards Board (IASB) is
the government group that establishes reporting requirements for companies
that issue stock to the public.
B) False
17.
Assets are the resources owned or controlled by a
business.
A) True
18.
Acme Company had equity of $55,000 at the end of the
current year. During the year the company had a $2,000 net loss and
investments by owners in exchange for stock of $7,000. Compute equity as of
the beginning of the year.
B) $50,000
19.
Internal users of accounting information include
lenders, shareholders, brokers and managers.
B) False
20.
An exchange of value between two entities is called:
A) A business
transaction
21.
The legitimate claims of a business's creditors take precedence over the claims
of its stockholders.
A)
True
22.
Investing activities are the acquiring and selling of resources that an
organization uses in its everyday operations.
A)
True
23.
Owner's investments and dividends are reported on the income statement.
B)
False
24.
If
the liabilities of a business increased $75,000 during a period of time and the
equity in the business decreased $30,000 during the same period, the assets of
the business must have:
A)
Increased $45,000
25.
A
company reported total equity of $145,000 on its December 31, 2008, balance
sheet. The following information is available for the year ended December 31,
2009:
What are
the total assets of the company at December 31, 2009?
C)
$282,000
26.
Congress passed the Sarbanes-Oxley Act to
A)
Help curb financial abuses at companies that issue their stock to the public
27.
The income statement shows the financial position of a business on a specific
date.
A)
True
28.
The primary objective of financial accounting is to provide general-purpose
financial statements to help external users analyze and interpret an
organization's activities.
A)
True
29.
A
balance sheet lists:
E)
The types and amounts of assets, liabilities and equity of a business as of a
specific date
30.
Fast-Forward has beginning equity of $257,000, net income of $51,000, dividends
of $40,000 and investments by owners in exchange for stock of $6,000. Its ending
equity is:
D)
$274,000
31.
Expenses decrease retained earnings and are the costs acquired to earn revenues.
A)
True
32.
Bookkeeping is the sole purpose of accounting.
B)
False
33.
The four basic financial statements include the balance sheet, income statement,
statement of retained earnings and statement of cash flows.
A)
True
34.
Accounting is one way important information about businesses are reported to
decision makers.
A)
True
35.
Another name for equity is:
E)
Net assets
36.
Fast-Forward had cash inflows from operations of $62,500; cash outflows from
investing activities of $47,000; and cash inflows from financing of $25,000. The
net change in cash was:
E)
$40,500 increase
