Preparing a budget for a business is considered
A. financial accounting.
B. managerial accounting - ANSWER-B
Accounting is the information system
... [Show More] that
A. measures business activities
B. communicates the results to decision makers
C. processes information into reports
D. all of the above. - ANSWER-D
Which of the following is not an external user of a business's financial information?
A. Taxing authorities B. Customers
C. Employees
D. Investors - ANSWER-C
Which statement below best describes the accounting equation?
A. The change in retained earnings equals net income less dividends.
B. Equality of revenue and expense transactions over time.
C. Financing activities equal investing and operating activities.
D. Resources of the company equal creditors' and owners' claims to those resources. - ANSWER-D
Owners' claims to the company's resources are referred to as:
A. Liabilities.
B. Assets.
C. Stockholders' equity.
D. Net liabilities. - ANSWER-C
If total assets of a company equal $25,000 and total stockholders' equity equals $10,000, then total liabilities equal $15,000.
A. True
B. False - ANSWER-A
Amounts owed to suppliers for supplies purchased on account are defined as a(n):
A. Revenue.
B. Asset.
C. Liability.
D. Expense - ANSWER-C
If total liabilities of a company equal $29,000 and total stockholders' equity equals $15,000, then total assets equal $14,000.
A. True
B. False - ANSWER-B
Financial accounting does not deal with which of the following?
A. Measuring a company's economic activity.
B. Providing information to internal users.
C. Preparing financial reports.
D. Communicating financial results to investors. - ANSWER-B
The accounting equation shows that a company's resources equal creditors' and owners' claims to those resources.
A. True
B. False - ANSWER-A
An alternative form of the accounting equation is:
A. Assets ‐ Liabilities = Stockholders' Equity.
B. Net Income = Revenues ‐ Expenses.
C. Stockholders' Equity = Assets + Liabilities.
D. Assets = Liabilities ‐ Stockholders' Equity. - ANSWER-A
Which of the following does not represent an asset of a company?
A. Supplies held by the company.
B. Amounts owed to suppliers.
C. Equipment owned and used for
operations.
D. Amounts receivable from customers. - ANSWER-B
The amounts recorded when the company sells products or provides services to customers are referred to as:
A. Liabilities
B. Revenues
C. Assets
D. Expenses - ANSWER-B
If a company has stockholders' equity of $25,000 at the end of the year, which of the following statements must be true?
A. The company has issued $25,000 of common stock.
B. Net income for the year equals $25,000.
C. The company's assets exceed liabilities by $25,000.
D. Total revenues during the year equal $25,000. - ANSWER-C
The costs of providing goods and services to customers are referred to as:
A. Assets
B. Expenses
C. Liabilities
D. Revenues - ANSWER-B
Which of the following best describes revenue?
A. Resources of a company.
B. Sales of goods and services to a customer.
C. Cash received from a customer.
D. Dividends paid to stockholders. - ANSWER-B
The difference between revenues and expenses is referred to as net income or net loss.
A. True
B. False - ANSWER-A
Use the following amounts to calculate net income: Revenues, $12,000; Liabilities, $5,000; Expenses, $4,000; Assets, $19,000; Dividends, $4,000
A. $6,000.
B. $8,000.
C. $4,000
D. $14,000. - ANSWER-B
Dividends represent a return of the company's profits to its owners, the stockholders.
A. True
B. False - ANSWER-A
The resources of a company are referred to as:
A. Liabilities
B. Revenues
C. Assets
D. Expenses - ANSWER-C
Liabilities can be best described as:
A. The amount of expenses over the past year.
B. The amount expected to be distributed to stockholders.
C. The amount owed to creditors
D. The amount of services provided to customers during the year. - ANSWER-C
Most business enterprises in the United States are
A. government units.
B. partnerships
C. sole proprietorships.
D. corporations. - ANSWER-C
Transfer of ownership will not affect the continuity of a
A. corporation or partnership
B. corporation
C. partnership
D. sole proprietorship - ANSWER-B
Which business form has the advantage of limited liability?
A. Corporation
B. Sole proprietorship
C. Partnership
D. All business forms share equal limited liability - ANSWER-A
Which of the following is an operating activity?
A. Issuing common stock.
B. Paying dividends.
C. Borrowing cash from a bank to acquire a factory.
D. Paying electricity bills for the month. - ANSWER-D
Financing activities include:
A. The purchase of a building.
B. Issuing common stock to stockholders.
C. Transactions with company employees.
D. Selling goods or services to customers. - ANSWER-B
How many of the following transactions are operating activities?
1. Borrowed $50,000 from the bank
2. Purchased $12,000 in supplies
3. Provide services to customers for $27,000
4. Paid the utility bill of $750
5. Purchased a delivery truck for $12,000
6. Received $25,000 from issuing common stock
A. One.
B. Two
C. Three
D. Four - ANSWER-C
Transactions related to the primary business activities of the company, such as selling goods and services to customers, are referred to as:
A. Investing activities.
B. Operating activities.
C. Management activities.
D. Financing activities. - ANSWER-B
The equation best describing the income statement is:
A. Revenues ‐ Expenses = Income
B. Assets = Revenues - Expenses
C. Assets = Liabilities + Stockholders' Equity
D. Revenues + Expenses = Income - ANSWER-A
The costs related to rent, utilities, and salaries in the current reporting period are examples of liabilities.
A. True
B. False - ANSWER-B
Which of the following items would not appear in an income statement?
A. Salaries expense
B. Service revenue
C. Cash
D. Advertising expense - ANSWER-C
Which of the following best explains the meaning of total stockholders' equity?
A. The difference between total revenues and total expenses, less dividends for the year.
B. The amount of common stock less dividends over the life of the company.
C. All revenues, expenses, and dividends over the life of the company.
D. The amount of capital invested by stockholders plus profits retained over the life of the company. - ANSWER-D
The statement of changes in stockholders' equity is a financial statement that summarizes stockholders' equity at a point in time.
A. True
B. False - ANSWER-B
Retained earnings at the end of the year is calculated using:
A. Beginning retained earnings, income, and dividends.
B. Common stock and dividends.
C. Stockholders' equity, income, and dividends.
D. Income and dividends. - ANSWER-A
Which of the following accounts represents a resource of the company?
A. Common stock.
B. Service revenue.
C. Accounts receivable.
D. Supplies expense. - ANSWER-C
Emmitt had the following final balances after the first year of operations: assets, $55,000; stockholders' equity, $25,000; dividends, $3,000; and income, $10,000. What is the amount of Emmitt's liabilities?
A. $55,000.
B. $30,000.
C. $13,000.
D. $ 7,000. - ANSWER-B
Any transaction that affects the income statement ultimately affects the balance sheet through the balance of retained earnings.
A. True
B. False - ANSWER-A
How many of following accounts would appear in a year‐end balance sheet?
Accounts Payable
$4,400
Salaries Expense
12,800
Cash
1,700
Common Stock
2,400
Service Revenue
8,300
Supplies
4,300
Retained Earnings
1,100
Utilities Expense
5,000
A. five
B. four
C. three
D. two - ANSWER-A
Investing cash flows in the statement of cash flows would include which of the following?
A. Paying salaries for the month.
B. Purchase of land.
C. Paying dividends to stockholders.
D. Selling goods or services to customers. - ANSWER-B
Cash received from bank borrowing would be reported in the statement of cash flows as what type of activity?
A. Investing
B. Organizing
C. Operating
D. Financing - ANSWER-D
Income (loss) appears in which two financial statements?
A. Balance sheet and income statement.
B. Income statement and statement of stockholders' equity.
C. Statement of stockholders' equity and balance sheet.
D. Income appears in only one financial statement. - ANSWER-B
Which one of the following statements regarding financial reports is correct?
A. The balance sheet classifies all assets according to operating, investing, and financing activities.
B. The income statement is used to show that a company's resources equal claims to those resources.
C. The statement of stockholders' equity updates the balances of common stock and retained earnings for related transactions during the year.
D. The statement of cash flows shows cash inflows and outflows from operating activities only. - ANSWER-C
The financial statement(s) that record activity over an interval of time include the
A. Income statement
B. Balance sheet
C. Balance sheet and income statement
D. Income statement and statement of cash flows. - ANSWER-D
In what order are the following financial statements prepared: (1) balance sheet, (2) income statement, and (3) statement of stockholders' equity?
A. 1, 2, 3.
B. 3,2,1
C. 1,3,2 [Show Less]