Question 1

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.

Question 2

How does the objectivity principle support ethical behavior?

Accepted Answer

The objectivity principle supports ethic...

Question 3

The financial statement that shows the beginning balance of retained earnings; the changes in retained earnings that resulted from net income (or net loss) ; dividends; and the ending balance, is the:

Accepted Answer

A)  Statement of financial position.
B)  Statement of cash flows.
C)  Balance sheet.
D)  Income statement.
E)  Statement of retained earnings.

Question 4

The difference between a company's assets and its liabilities, or its net assets, is:

Accepted Answer

A)  Net income.
B)  Expense.
C)  Equity.
D)  Revenue.
E)  Net loss.

Question 5

_________________ is net income divided by average total assets.

Accepted Answer

The answer of _________________ is net income divided by average...

Question 6

All of the following are true regarding ethics except:

Accepted Answer

A)  Ethics are beliefs that separate right from wrong.
B)  Ethics rules are often set for CPAs.
C)  Ethics do not affect the operations or outcome of a company.
D)  Are critical in accounting.
E)  Ethics can be difficult to apply.

Question 7

Prepare a April 30 balance sheet in proper form for Two Rivers Vending Service, Inc. from the following alphabetical list of the accounts at April 30:

Accepted Answer

The answer of Prepare a April 30 balance sheet in...

Question 8

Cage Company had income of $350 million and average invested assets of $2,000 million. Its return on assets (ROA)  is:

Accepted Answer

A)  1.8%.
B)  35%.
C)  17.5%.
D)  5.7%.
E)  3.5%.

Question 9

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year, then the change in equity of the company during the year must have been:

Accepted Answer

A)  An increase of $80,000.
B)  A decrease of $80,000.
C)  An increase of $30,000.
D)  A decrease of $30,000.
E)  An increase of $25,000.

Question 10

Explain the role of accounting in the information age.

Accepted Answer

Accounting is an information and measure...

Question 11

The income statement reports on operating activities at a point in time.

Accepted Answer

A) True 
 B)False

Question 12

External users include lenders, shareholders, customers, and regulators.

Accepted Answer

A) True 
 B)False

Question 13

The International Accounting Standards Board (IASB) has the authority to impose its standards on companies around the world.

Accepted Answer

A) True 
 B)False

Question 14

A balance sheet covers activities over a period of time such as a month or year.

Accepted Answer

A) True 
 B)False

Question 15

All of the following are classified as assets except:

Accepted Answer

A)  Accounts Receivable.
B)  Supplies.
C)  Equipment.
D)  Accounts Payable.
E)  Land.

Question 16

The statement of retained earnings:

Accepted Answer

A)  Reports how retained earnings changes at a point in time.
B)  Reports how retained earnings 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.

Question 17

A company acquires equipment for $75,000 cash. This represents a(n) :

Accepted Answer

A)  Operating activity.
B)  Investing activity.
C)  Financing activity.
D)  Revenue activity.
E)  Expense activity.

Question 18

Assets are the resources a company owns or controls that are expected to yield future benefits.

Accepted Answer

A) True 
 B)False

Question 19

The basic financial statements include all of the following except:

Accepted Answer

A)  Balance Sheet.
B)  Income Statement.
C)  Statement of Retained Earnings.
D)  Statement of Cash Flows.
E)  Statement of Changes in Assets.

Question 20

Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities.

Accepted Answer

A) True 
 B)False

Exam 1: Introducing Financial Accounting

The International Accounting Standards Board (IASB) has the authority to impose its standards on companies around the world.

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How does the objectivity principle support ethical behavior?

Correct AnswerverifiedThe objectivity principle supports ethic...View AnswerShow Answer

The statement of retained earnings:

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Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities.

Correct AnswerverifiedShow Answer

A company acquires equipment for $75,000 cash. This represents a(n) :

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External users include lenders, shareholders, customers, and regulators.

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If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year, then the change in equity of the company during the year must have been:

Correct AnswerverifiedShow Answer

All of the following are classified as assets except:

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A balance sheet covers activities over a period of time such as a month or year.

Correct AnswerverifiedShow Answer

Prepare a April 30 balance sheet in proper form for Two Rivers Vending Service, Inc. from the following alphabetical list of the accounts at April 30:

Correct AnswerverifiedShow Answer

The basic financial statements include all of the following except:

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The financial statement that shows the beginning balance of retained earnings; the changes in retained earnings that resulted from net income (or net loss) ; dividends; and the ending balance, is the:

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

All of the following are true regarding ethics except:

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_________________ is net income divided by average total assets.

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The income statement reports on operating activities at a point in time.

Correct AnswerverifiedShow Answer

Assets are the resources a company owns or controls that are expected to yield future benefits.

Correct AnswerverifiedShow Answer

The difference between a company's assets and its liabilities, or its net assets, is:

Correct AnswerverifiedShow Answer

Explain the role of accounting in the information age.

Correct AnswerverifiedAccounting is an information and measure...View AnswerShow Answer

Cage Company had income of $350 million and average invested assets of $2,000 million. Its return on assets (ROA) is:

Correct AnswerverifiedShow Answer

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The objectivity principle supports ethic...
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Accounting is an information and measure...
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Correct Answer
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