Question 1

Who has primary responsibility for making sure that a company's financial statements follow GAAP?

Accepted Answer

A)   Management
B)   Independent auditors (CPAs) 
C)   The Securities and Exchange Commission (SE
C)  
D)   The Public Company Accounting Oversight Board (PCAO
B)  E) A) and D)
F) C) and D)

Question 2

Which of the following would appear in the cash flows from operating activities section of the statement of cash flows?

Accepted Answer

A)   Cash paid to suppliers and employees
B)   Cash paid to purchase equipment
C)   Cash paid on notes payable
D)   Cash paid for dividendsE) B) and C)
F) None of the above

Question 3

Generally accepted accounting principles (GAAP) were (are) established by:

Accepted Answer

A)   an Italian monk in 1494.
B)   the U.S. Congress and the SEC.
C)   the PCAOB.
D)   the FASB on an ongoing basis.E) B) and D)
F) B) and C)

Question 4

Borrowing from a bank is a(n) :

Accepted Answer

A)   operating activity.
B)   investing activity.
C)   financing activity.
D)   expense.E) A) and D)
F) B) and C)

Question 5

Public corporations are businesses:

Accepted Answer

A)   owned by two or more people, each of whom is personally liable for the debts of the business.
B)   whose stock is bought and sold on a stock exchange.
C)   whose stock is bought and sold privately.
D)   where stock is not used as evidence of ownership.E) A) and D)
F) A) and B)

Question 6

In the U.S.,Generally Accepted Accounting Principles (GAAP) are established by the:

Accepted Answer

A)   International Accounting Standards Board (IAS
B)  .
B)   Public Company Accounting Oversight Board (PCAO
B)  .
C)   Financial Accounting Standards Board (FAS
B)  .
D)   American Institute of Certified Public Accountants (AICP
A)  .E) All of the above
F) B) and D)

Question 7

Revenues are:

Accepted Answer

A)   earned by selling goods or services to customers.
B)   amounts that owners have contributed directly to the business.
C)   cash payments that a business has made directly to its owners.
D)   the amount of cash a company has left after it has paid its liabilities.E) A) and B)
F) None of the above

Question 8

A net loss for a period arises when:

Accepted Answer

A)   Assets are greater than liabilities.
B)   Revenues are less than expenses.
C)   Liabilities are greater than stockholder's equity.
D)   Revenues are greater than expenses.E) B) and C)
F) None of the above

Question 9

If National Inc.has Common Stock of $80,000,total assets of $170,000,and total liabilities of $70,000,its Retained Earnings equals:

Accepted Answer

A)   $20,000.
B)   $90,000.
C)   $100,000.
D)   $110,000.E) B) and D)
F) B) and C)

Question 10

The payment of dividends is a financing activity on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 11

Accounting systems:

Accepted Answer

A)   are summarized in publicly published reports.
B)   analyze, record, summarize, and the activities affecting its financial condition and performance.
C)   monitor business activities only in financial terms.
D)   capture only the information that is needed by the owners of the company.E) C) and D)
F) A) and D)

Question 12

The table shows financial data for Purrfect Pets,Inc.as of June 30,Year 3.
  
Required:
Prepare a balance sheet using these data.

Accepted Answer

The answer of The table shows financial data for Purrfect...

Question 13

Which of the following business organizations has only one owner?

Accepted Answer

A)   Corporation
B)   Sole proprietorship
C)   Public company
D)   PartnershipE) A) and B)
F) C) and D)

Question 14

A company started the year with the following: Assets $100,000; Liabilities $30,000; Common Stock $60,000; Retained Earnings $10,000.During the year, the company earned revenue of $5,000, all of which was received in cash, and incurred expenses of $3,000, all of which were unpaid as of the end of the year.In addition, the company paid dividends of $1,000 to owners.Assume no other activities occurred during the year.
-Use the information above to answer the following question.The amount of assets at the end of the year is

Accepted Answer

A)   $105,000.
B)   108,000.
C)   $104,000.
D)   $107,000.E) B) and D)
F) A) and D)

Question 15

At the end of last year,the company's assets totaled $860,000 and its liabilities totaled $740,000.During the current year,the company's total assets increased by $58,000 and its total liabilities increased by $24,000.At the end of the current year,stockholders' equity was:

Accepted Answer

A)   $154,000.
B)   $120,000.
C)   $34,000.
D)   $178,000.E) C) and D)
F) B) and C)

Question 16

Expenses appear on the:

Accepted Answer

A)   statement of retained earnings.
B)   balance sheet.
C)   income statement.D) A) and B)
E) A) and C)

Question 17

Cash activity from the buying and selling of productive resources,such as land,buildings and equipment,are reported as cash flows from _________ activities on the statement of cash flows.

Accepted Answer

A)   investing
B)   operating
C)   financing
D)   managingE) All of the above
F) B) and C)

Question 18

With respect to the audience targeted for financial accounting reports,which of the parties below is not an external user?

Accepted Answer

A)   Customers of the company issuing the reports
B)   Creditors of the company issuing the reports
C)   Managers of the company issuing the reports
D)   Stockholders of the company issuing the reportsE) None of the above
F) B) and C)

Question 19

When faced with an ethical dilemma,an accountant should:

Accepted Answer

A)   Identify who will be affected by the situation, identify and evaluate the alternative courses of action, and choose the alternative that is the most ethical.
B)   report the matter to the SEC.
C)   report the matter to the IRS.
D)   resign.E) A) and C)
F) A) and D)

Question 20

The types of business activities measured by the statement of cash flows are:

Accepted Answer

A)   selling goods, selling services, and obtaining financing.
B)   operating activities, investing activities, and financing activities.
C)   hiring, producing, and advertising.
D)   generating revenues, paying expenses, and paying dividends.E) A) and C)
F) B) and D)

Exam 1: Business Decisions and Financial Accounting

Who has primary responsibility for making sure that a company's financial statements follow GAAP?

Correct Answer
verified

The types of business activities measured by the statement of cash flows are:

Correct Answer
verified

At the end of last year,the company's assets totaled $860,000 and its liabilities totaled $740,000.During the current year,the company's total assets increased by $58,000 and its total liabilities increased by $24,000.At the end of the current year,stockholders' equity was:

Correct Answer
verified

If National Inc.has Common Stock of $80,000,total assets of $170,000,and total liabilities of $70,000,its Retained Earnings equals:

Correct Answer
verified

When faced with an ethical dilemma,an accountant should:

Correct Answer
verified

Correct Answer
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Public corporations are businesses:

Correct Answer
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In the U.S.,Generally Accepted Accounting Principles (GAAP) are established by the:

Correct Answer
verified

With respect to the audience targeted for financial accounting reports,which of the parties below is not an external user?

Correct Answer
verified

Borrowing from a bank is a(n) :

Correct Answer
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Generally accepted accounting principles (GAAP) were (are) established by:

Correct Answer
verified

Which of the following business organizations has only one owner?

Correct Answer
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Expenses appear on the:

Correct Answer
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Which of the following would appear in the cash flows from operating activities section of the statement of cash flows?

Correct Answer
verified

The payment of dividends is a financing activity on the statement of cash flows.

Correct Answer
verified

Cash activity from the buying and selling of productive resources,such as land,buildings and equipment,are reported as cash flows from _________ activities on the statement of cash flows.

Correct Answer
verified

A net loss for a period arises when:

Correct Answer
verified

Accounting systems:

Correct Answer
verified

The table shows financial data for Purrfect Pets,Inc.as of June 30,Year 3. Required: Prepare a balance sheet using these data.

Correct Answer
verified

Revenues are:

Correct Answer
verified

Exam 1: Business Decisions and Financial Accounting

Who has primary responsibility for making sure that a company's financial statements follow GAAP?

Correct AnswerverifiedShow Answer

The types of business activities measured by the statement of cash flows are:

Correct AnswerverifiedShow Answer

At the end of last year,the company's assets totaled $860,000 and its liabilities totaled $740,000.During the current year,the company's total assets increased by $58,000 and its total liabilities increased by $24,000.At the end of the current year,stockholders' equity was:

Correct AnswerverifiedShow Answer

If National Inc.has Common Stock of $80,000,total assets of $170,000,and total liabilities of $70,000,its Retained Earnings equals:

Correct AnswerverifiedShow Answer

When faced with an ethical dilemma,an accountant should:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Public corporations are businesses:

Correct AnswerverifiedShow Answer

In the U.S.,Generally Accepted Accounting Principles (GAAP) are established by the:

Correct AnswerverifiedShow Answer

With respect to the audience targeted for financial accounting reports,which of the parties below is not an external user?

Correct AnswerverifiedShow Answer

Borrowing from a bank is a(n) :

Correct AnswerverifiedShow Answer

Generally accepted accounting principles (GAAP) were (are) established by:

Correct AnswerverifiedShow Answer

Which of the following business organizations has only one owner?

Correct AnswerverifiedShow Answer

Expenses appear on the:

Correct AnswerverifiedShow Answer

Which of the following would appear in the cash flows from operating activities section of the statement of cash flows?

Correct AnswerverifiedShow Answer

The payment of dividends is a financing activity on the statement of cash flows.

Correct AnswerverifiedShow Answer

Cash activity from the buying and selling of productive resources,such as land,buildings and equipment,are reported as cash flows from _________ activities on the statement of cash flows.

Correct AnswerverifiedShow Answer

A net loss for a period arises when:

Correct AnswerverifiedShow Answer

Accounting systems:

Correct AnswerverifiedShow Answer

The table shows financial data for Purrfect Pets,Inc.as of June 30,Year 3. Required: Prepare a balance sheet using these data.

Correct AnswerverifiedShow Answer

Revenues are:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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