Question 1

Exhibit 1.5.1 The following financial statements are to be used to answer the following questions:
  
-Refer to Exhibit 1.5-1. What is the Cost of goods sold for the year ended December 31, 2012?

Accepted Answer

A)   $8,000
B)   $12,000
C)   $65,000
D)   $100,000E) A) and B)
F) A) and C)

Question 2

At the end of the current accounting period, account balances were as follows: Cash, $15,000; Accounts Receivable, $20,000; Common Stock, $8,000; Retained Earnings, $14,000. Liabilities for the period were:

Accepted Answer

A)   $13,000.
B)   $20,000.
C)   $27,000.
D)   $32,000.E) A) and B)
F) None of the above

Question 3

Information that is material must be separately disclosed in the financial statements.

Accepted Answer

A) True 
 B)False

Question 4

If a company prepares its financial statements three years after the end of their accounting period, they have violated the qualitative characteristic of :

Accepted Answer

A)   understandability.
B)   timeliness.
C)   verifiability.
D)   full disclosure.E) C) and D)
F) None of the above

Question 5

Cash dividends:

Accepted Answer

A)   decrease revenue on the income statement.
B)   decrease retained earnings on the statement of retained earnings.
C)   increase expenses on the income statement.
D)   decrease operating activities on the statement of cash flows.E) A) and B)
F) B) and D)

Question 6

Accrued expenses are a current asset.

Accepted Answer

A) True 
 B)False

Question 7

On January 1, 2010, total assets for Liftoff Technologies were $125,000; on December 31, 2010, total assets were $145,000. On January 1, 2010, total liabilities were $110,000; on December 31, 2010, total liabilities were $115,000. What is the amount of the change and the direction of the change in Liftoff Technologies' stockholders' equity for 2010?

Accepted Answer

A)   Decrease of $15,000.
B)   Increase of $15,000.
C)   Increase of $30,000.
D)   Decrease of $30,000.E) B) and D)
F) C) and D)

Question 8

All of the following would be considered investing activities EXCEPT for:

Accepted Answer

A)   purchase of land for cash.
B)   the sale of equipment for cash.
C)   the payment of cash dividends.
D)   the purchase of equipment for cash.E) All of the above
F) A) and C)

Question 9

Which statement(s)  summarizes the revenues, gains, expenses, and losses of an entity?

Accepted Answer

A)   Balance sheet
B)   Statement of cash flows and income statement
C)   Statement of retained earnings and statement of operations
D)   Income statementE) None of the above
F) C) and D)

Question 10

What is the proper order for the categories of the statement of cash flows?

Accepted Answer

A)   Financing activities, investing activities, and operating activities
B)   Operating activities, investing activities, and financing activities
C)   Operating activities, financing activities, and investing activities
D)   Investing activities, financing activities, and operating activitiesE) A) and D)
F) All of the above

Question 11

Verifiability means that the information:

Accepted Answer

A)   is timely.
B)   is understandable.
C)   must be capable of being checked for accuracy.
D)   is material and relevant.E) A) and B)
F) B) and C)

Question 12

Decision makers who use accounting include:

Accepted Answer

A)   the SEC
B)   investors.
C)   managers.
D)   all of the above.E) B) and C)
F) A) and C)

Question 13

Accounting produces financial statements, which report information about a business entity.

Accepted Answer

A) True 
 B)False

Question 14

When preparing a company's income statement:

Accepted Answer

A)   commonly controlled corporations cannot combine all of their revenues and expenses and report them as one total.
B)   the statement is prepared as of a specific date.
C)   the term "other" generally notes that the amount is not sufficiently material to label it separately.
D)   expenses are listed before revenues.E) B) and D)
F) A) and D)

Question 15

All corporations must use the calendar year as its accounting year.

Accepted Answer

A) True 
 B)False

Question 16

Accounting information is used by investors and creditors, but not by individuals.

Accepted Answer

A) True 
 B)False

Question 17

An entity that must pay its own income taxes is:

Accepted Answer

A)   proprietorship.
B)   partnership.
C)   limited-liability company.
D)   corporation.E) C) and D)
F) B) and D)

Question 18

The basic component of paid-in capital is common stock.

Accepted Answer

A) True 
 B)False

Question 19

When a company is purchasing long-term assets, this is a sign of growth. This information can be obtained by examining:

Accepted Answer

A)   the equity section of the balance sheet.
B)   the revenues section of the income statement.
C)   the investing cash flows section of the statement of cash flows.
D)   the net income section of the statement of retained earnings.E) All of the above
F) None of the above

Question 20

The accounting equation can be stated as:

Accepted Answer

A)   Assets + Stockholders' Equity = Liabilities.
B)   Assets -Liabilities = Stockholders' Equity.
C)   Assets = Liabilities - Stockholders' Equity.
D)   Assets - Stockholders' Equity + Liabilities = Zero.E) None of the above
F) A) and B)

Exam 1: The Financial Statements

When preparing a company's income statement:

Correct Answer
verified

The accounting equation can be stated as:

Correct Answer
verified

Verifiability means that the information:

Correct Answer
verified

Accounting information is used by investors and creditors, but not by individuals.

Correct Answer
verified

What is the proper order for the categories of the statement of cash flows?

Correct Answer
verified

Exhibit 1.5.1 The following financial statements are to be used to answer the following questions: -Refer to Exhibit 1.5-1. What is the Cost of goods sold for the year ended December 31, 2012?

Correct Answer
verified

Cash dividends:

Correct Answer
verified

All corporations must use the calendar year as its accounting year.

Correct Answer
verified

Accounting produces financial statements, which report information about a business entity.

Correct Answer
verified

Accrued expenses are a current asset.

Correct Answer
verified

The basic component of paid-in capital is common stock.

Correct Answer
verified

An entity that must pay its own income taxes is:

Correct Answer
verified

All of the following would be considered investing activities EXCEPT for:

Correct Answer
verified

Which statement(s) summarizes the revenues, gains, expenses, and losses of an entity?

Correct Answer
verified

If a company prepares its financial statements three years after the end of their accounting period, they have violated the qualitative characteristic of :

Correct Answer
verified

Correct Answer
verified

When a company is purchasing long-term assets, this is a sign of growth. This information can be obtained by examining:

Correct Answer
verified

Decision makers who use accounting include:

Correct Answer
verified

Information that is material must be separately disclosed in the financial statements.

Correct Answer
verified

At the end of the current accounting period, account balances were as follows: Cash, $15,000; Accounts Receivable, $20,000; Common Stock, $8,000; Retained Earnings, $14,000. Liabilities for the period were:

Correct Answer
verified

Exam 1: The Financial Statements

When preparing a company's income statement:

Correct AnswerverifiedShow Answer

The accounting equation can be stated as:

Correct AnswerverifiedShow Answer

Verifiability means that the information:

Correct AnswerverifiedShow Answer

Accounting information is used by investors and creditors, but not by individuals.

Correct AnswerverifiedShow Answer

What is the proper order for the categories of the statement of cash flows?

Correct AnswerverifiedShow Answer

Exhibit 1.5.1 The following financial statements are to be used to answer the following questions: -Refer to Exhibit 1.5-1. What is the Cost of goods sold for the year ended December 31, 2012?

Correct AnswerverifiedShow Answer

Cash dividends:

Correct AnswerverifiedShow Answer

All corporations must use the calendar year as its accounting year.

Correct AnswerverifiedShow Answer

Accounting produces financial statements, which report information about a business entity.

Correct AnswerverifiedShow Answer

Accrued expenses are a current asset.

Correct AnswerverifiedShow Answer

The basic component of paid-in capital is common stock.

Correct AnswerverifiedShow Answer

An entity that must pay its own income taxes is:

Correct AnswerverifiedShow Answer

All of the following would be considered investing activities EXCEPT for:

Correct AnswerverifiedShow Answer

Which statement(s) summarizes the revenues, gains, expenses, and losses of an entity?

Correct AnswerverifiedShow Answer

If a company prepares its financial statements three years after the end of their accounting period, they have violated the qualitative characteristic of :

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a company is purchasing long-term assets, this is a sign of growth. This information can be obtained by examining:

Correct AnswerverifiedShow Answer

Decision makers who use accounting include:

Correct AnswerverifiedShow Answer

Information that is material must be separately disclosed in the financial statements.

Correct AnswerverifiedShow Answer

At the end of the current accounting period, account balances were as follows: Cash, $15,000; Accounts Receivable, $20,000; Common Stock, $8,000; Retained Earnings, $14,000. Liabilities for the period were:

Correct AnswerverifiedShow 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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified