Question 1

If equity is $300,000 and liabilities are $192,000,then assets equal:

Accepted Answer

A)  $108,000.
B)  $192,000.
C)  $300,000.
D)  $492,000.
E)  $792,000.F) A) and B)
G) A) and C)

Question 2

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Accepted Answer

A) True 
 B)False

Question 3

Cage Company had income of $35 million and average invested assets of $200 million.Its return on assets (ROA) is:

Accepted Answer

A)  1.8%.
B)  35%.
C)  17.5%.
D)  5.7%.
E)  3.5%.F) All of the above
G) A) and E)

Question 4

Planning is a part of each business activity (Operating,investing,and financing),and gives each activity meaning and focus.

Accepted Answer

A) True 
 B)False

Question 5

________ users of accounting information are not directly involved in running the organization.

Accepted Answer

The answer of ________ users of accounting information are not...

Question 6

A ________ is a business that is owned by only one person.

Accepted Answer

The answer of A ________ is a business that is...

Question 7

Which of the following accounts is not included in the asset section of the balance sheet?

Accepted Answer

A)  Buildings.
B)  Wages expense.
C)  Supplies.
D)  Land.
E)  FurnitureF) B) and D)
G) A) and D)

Question 8

On May 31 of the current year,the assets and liabilities of Riser,Inc.are as follows: Cash $20,500; Accounts Receivable,$7,250; Supplies,$650; Equipment,$12,000; Accounts Payable,$9,300.What is the amount of equity as of May 31 of the current year?

Accepted Answer

A)  $49,700.
B)  $13,050.
C)  $20,500.
D)  $31,100.
E)  $40,400.F) C) and D)
G) B) and C)

Question 9

If a company uses $1,300 of its cash to purchase supplies,the effect on the accounting equation would be:

Accepted Answer

A)  Assets increase $1,300 and liabilities decrease $1,300.
B)  One asset increases $1,300 and another asset decreases $1,300,causing no effect.
C)  Assets decrease $1,300 and equity decreases $1,300.
D)  Assets decrease $1,300 and equity increases $1,300.
E)  Assets increase $1,300 and liabilities increase $1,300.F) B) and D)
G) B) and C)

Question 10

The statement of cash flows:

Accepted Answer

A)  Reports how equity changes at a point in time.
B)  Reports how equity changes over a period of time.
C)  Reports on cash flows for operating,financing,and investing activities over a period of time.
D)  Reports on cash flows for operating,financing,and investing activities at a point in time.
E)  Reports on amounts for assets,liabilities,and equity at a point in time.F) None of the above
G) A) and C)

Question 11

If Houston Company billed a client for $10,000 of consulting work completed,the accounts receivable asset increases by $10,000 and:

Accepted Answer

A)  Accounts payable decreases $10,000.
B)  Accounts payable increases $10,000.
C)  Cash increases $10,000.
D)  Revenue increases $10,000.
E)  Revenue decreases $10,000F) A) and B)
G) B) and E)

Question 12

Contessa Company collected $42,000 cash on its accounts receivable.The effects of this transaction as reflected in the accounting equation are:

Accepted Answer

A)  Total assets decrease and equity increases.
B)  Both total assets and total liabilities decrease.
C)  Total assets,total liabilities,and total equity are unchanged.
D)  Both total assets and equity are unchanged and liabilities increase.
E)  Total assets increase and equity decreases.F) B) and C)
G) All of the above

Question 13

Which of the following combinations results in a net loss reported on the income statement?

Accepted Answer

A)  Total revenues of $80,000 and total expenses of $74,000.
B)  Total revenues of $70,000 and total expenses of $74,000.
C)  Total revenues of $60,000 and total expenses of $52,000.
D)  Total revenues of $20,000 and total expenses of $16,000.
E)  Total revenues of $40,000 and total expenses of $31,000.F) None of the above
G) A) and D)

Question 14

Charlie's Chocolates' stockholders made investments of $50,000 and received dividends of $20,000.The company has revenues of $83,000 and expenses of $64,000.Calculate its net income.

Accepted Answer

A)  $30,000.
B)  $83,000.
C)  $64,000.
D)  $19,000.
E)  $49,000.F) B) and D)
G) B) and C)

Question 15

A company's balance sheet shows: cash $22,000,accounts receivable $16,000,office equipment $50,000,and accounts payable $17,000.What is the amount of stockholders' equity?

Accepted Answer

A)  $17,000.
B)  $29,000.
C)  $71,000.
D)  $88,000.
E)  $105,000.F) A) and B)
G) B) and E)

Question 16

The Financial Accounting Standards Board is the governmental agency that sets both broad and specific accounting principles.

Accepted Answer

A) True 
 B)False

Question 17

Use the following information for Meeker Corp to determine the amount of equity to report.

Accepted Answer

A)  $390,000.
B)  $140,000.
C)  $20,000.
D)  $530,000.
E)  $270,000.F) C) and E)
G) A) and D)

Question 18

The Securities and Exchange Commission (SEC)is a government agency that has legal authority to establish GAAP.

Accepted Answer

A) True 
 B)False

Question 19

Recordkeeping,or bookkeeping,is the recording of transactions and events,either manually or electronically.

Accepted Answer

A) True 
 B)False

Question 20

Identify several opportunities in accounting and distinguish between private accounting and public accounting.

Accepted Answer

The four broad areas of accounting are f...

Exam 1: Introducing Financial Statements

________ users of accounting information are not directly involved in running the organization.

Correct AnswerverifiedShow Answer

Which of the following combinations results in a net loss reported on the income statement?

Correct AnswerverifiedShow Answer

Charlie's Chocolates' stockholders made investments of $50,000 and received dividends of $20,000.The company has revenues of $83,000 and expenses of $64,000.Calculate its net income.

Correct AnswerverifiedShow Answer

A company's balance sheet shows: cash $22,000,accounts receivable $16,000,office equipment $50,000,and accounts payable $17,000.What is the amount of stockholders' equity?

Correct AnswerverifiedShow Answer

Planning is a part of each business activity (Operating,investing,and financing),and gives each activity meaning and focus.

Correct AnswerverifiedShow Answer

If equity is $300,000 and liabilities are $192,000,then assets equal:

Correct AnswerverifiedShow Answer

Identify several opportunities in accounting and distinguish between private accounting and public accounting.

Correct AnswerverifiedThe four broad areas of accounting are f...View AnswerShow Answer

If Houston Company billed a client for $10,000 of consulting work completed,the accounts receivable asset increases by $10,000 and:

Correct AnswerverifiedShow Answer

Cage Company had income of $35 million and average invested assets of $200 million.Its return on assets (ROA) is:

Correct AnswerverifiedShow Answer

A ________ is a business that is owned by only one person.

Correct AnswerverifiedShow Answer

If a company uses $1,300 of its cash to purchase supplies,the effect on the accounting equation would be:

Correct AnswerverifiedShow Answer

Recordkeeping,or bookkeeping,is the recording of transactions and events,either manually or electronically.

Correct AnswerverifiedShow Answer

The statement of cash flows:

Correct AnswerverifiedShow Answer

Contessa Company collected $42,000 cash on its accounts receivable.The effects of this transaction as reflected in the accounting equation are:

Correct AnswerverifiedShow Answer

The Securities and Exchange Commission (SEC)is a government agency that has legal authority to establish GAAP.

Correct AnswerverifiedShow Answer

Which of the following accounts is not included in the asset section of the balance sheet?

Correct AnswerverifiedShow Answer

Use the following information for Meeker Corp to determine the amount of equity to report.

Correct AnswerverifiedShow Answer

The Financial Accounting Standards Board is the governmental agency that sets both broad and specific accounting principles.

Correct AnswerverifiedShow Answer

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Correct AnswerverifiedShow Answer

On May 31 of the current year,the assets and liabilities of Riser,Inc.are as follows: Cash $20,500; Accounts Receivable,$7,250; Supplies,$650; Equipment,$12,000; Accounts Payable,$9,300.What is the amount of equity as of May 31 of the current year?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The four broad areas of accounting are f...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified