BU 127 ACCOUNTING TESTBANK, 580 PAGES of Questions With Answers Latest (VERSION) UPDATE 2020/21
1) What is the primary purpose of the statement of
... [Show More] financial position?
A) To measure the profit of a business up to a particular point in time.
B) To report assets at their current market value at a particular point in time.
C) To report the financial position of the reporting entity at a particular point in time.
D) To report the difference between cash inflows and cash outflows for the period.
Answer: C
2) On January 1, 20X1, two individuals invested $150,000 each to form Hornbeck Corporation. Hornbeck had total revenues of $15,000 during 20X1 and $40,000 during 20X2. Total expenses for the same periods were $8,000 and $22,000, respectively. Cash dividends paid out to shareholders totaled $6,000 in 20X1 and $12,000 in 20X2. What was the ending balance in Hornbeck's retained earnings account at the end of 20X1 and 20X2?
A) $1,000 and $6,000 respectively. B) $7,000 and $19,000 respectively.
C) $1,000 and $7,000, respectively. D) $301,000 and $306,000 respectively.
Answer: C
3) The BAT Corporation had revenues of $110,000, expenses of $85,000, and an income tax rate of 20 percent in 20X2. What would profit after taxes be?
A) $25,000. B) $15,000. C) $5,000. D) $20,000.
Answer: D
4) Brown Corporation reported the following amounts at the end of the first year of operations, December 31, 20X1: Share capital $20,000; Sales revenue $95,000; Total assets $85,000, No dividends, and Total liabilities $35,000. What would shareholders' equity and total expenses be?
A) Shareholders' equity, $80,000 and expenses $40,000.
B) Shareholders' equity, $80,000 and expenses $85,000.
C) Shareholders' equity, $50,000 and expenses $65,000.
D) Shareholders' equity, $60,000 and expenses $75,000.
Answer: C
5) Which of the following would not be considered an internal user of accounting data?
A) A creditor of a company. B) The controller of a company.
C) A salesperson of a company. D) The president of a company.
Answer: A
6) If total liabilities increased by $25,000 and shareholders' equity increased by $5,000 during a period, then total assets must change by what amount and direction during that same period?
A) $20,000 decrease. B) $25,000 increase.
C) $30,000 increase. D) $20,000 increase.
Answer: C
7) Which of the following activities involves raising the necessary funds to support the business?
A) Operating. B) Marketing. C) Financing. D) Investing.
Answer: C [Show Less]