acg ch.1 quiz
Gilkey Corporation began the year with retained earnings of $465,000. During the year, the company issued $630,000 of common stock, recorded expenses of $1,800,000, and paid dividends of $120,000. If Gilkey's ending retained earnings was $495,000, what was the company's revenue for the year?
$1,950,000
The financial records for Harold Corporation included the following information: Accounts receivable, $60,000 Accounts payable, $5,000 Cash, $30,000 Common stock, $5,000 Dividends, $20,000 Insurance expense, $10,000 Salaries and wages expense, $40,000 Sales revenue, $150,000Based on this information, how much was its net income?
$100,000
The financial records for Harold Corporation included the following information:Accounts receivable, $60,000Accounts payable, $5,000Cash, $30,000Common stock, $5,000Dividends, $20,000Insurance expense, $10,000Salaries and wages expense, $40,000Sales revenue, $150,000Based on this information, how much was its net income?
$100,000
Chris's Maid Service began the year with total assets of $125,000 and stockholders' equity of $40,000. During the year the company earned $90,000 in net income and paid $20,000 in dividends. Total assets at the end of the year were $215,000. How much are total liabilities at the end of the year?
$105,000
Jackson Company recorded the following cash transactions for the year: Paid $130,000 for salaries. Paid $60,000 to purchase inventory. Borrowed $6,000 from a bank. Collected $245,000 from customers.What is the company's net cash from operating activities for the year?
$115,000
If total liabilities increased by $15,000 and total stockholders' equity increased by $5,000 during a period of time, then total assets must have changed by what amount and direction during that same period?
$20,000 increase
Chris's Maid Service began the year with total liabilities of $100,000 and stockholders' equity of $40,000. During the year the company earned $110,000 in net income and paid $5,000 in dividends. Total liabilities at the end of the year were $240,000. How much are total assets at the end of the year?
$385,000
During the year, Finney Company recorded revenues of $370,000, recorded expenses of $320,000, issued an additional $10,000 of common stock, and paid dividends of $40,000. Its ending retained earnings is 400,000. What was the company beginning retained earnings? Correct!
$390,000
During the year, Finney Company recorded revenues of $370,000, recorded expenses of $320,000, issued an additional $10,000 of common stock, and paid dividends of $40,000. Its ending retained earnings is 400,000. What was the company beginning retained earnings? You Answered
$390,000
If total liabilities increased by $50,000 and stockholders' equity decreased by $10,000 then total assets changed by what amount and in what direction during that same period?
$40,000 increase
The financial records for Harold Corporation included the following information: Accounts receivable, $60,000 Accounts payable, $25,000 Cash, $15,000 Common stock, $10,000 Dividends, $5,000 Rent expense, $10,000 Sales revenue, $75,000 Salaries and wages expense, $20,000 Based on this information, how much was its net income?
$45,000
Marvin Services Corporation had the following accounts and balances: Accounts payable $ 8,000 Accounts receivable 10,000 Buildings 45,000 Cash 6,000 Common stock 7,000 Equipment 10,000 Notes payable 7,000 Retained earnings Not given Unearned service revenue 3,000 What is the balance of the company's retained earnings account?
$46,000
Elton Company's retained earnings at the start of the current year was $375,000. At the end of the current year, its accounts had the following balances: Accounts payable, $100,000 Accounts receivable, $75,000 Cash, $125,000 Common stock, $150,000 Dividends, $50,000 Equipment, $425,000 Salaries expense, $625,000 Service revenue, $700,000 Supplies, $25,000 The balance of Elton Company's year-end retained earnings is not given. Elton Company's total assets at year-end are
$650,000
Jackson Company recorded the following cash transactions for the year: Paid $150,000 for salaries. Paid $45,000 to purchase inventory. Paid $10,000 in dividends. Collected $275,000 from customers.What is the company's net cash from operating activities for the year?
$80,000
Which of the following is true with regards to the forms of business organization? - The majority of U.S. business is transacted by sole proprietorships. - A corporation is a business organized as a separate legal entity owned by stockholders. - Corporations and their owners generally receive more favorable tax treatment than sole proprietorships and partnerships. - Proprietors are generally not personally liable for their proprietorships' debts. - All of these are true
A corporation is a business organized as a separate legal entity owned by stockholders.
A company borrowing money from a bank is an example of - a financing activity. - an administrating activity. - None of these - an operating activity. - an investing activity.
A financing activity
Which of the following is not one of the three primary business activities listed on the statement of cash flows? - Financing activities - Investing activities - Advertising activities - Operating activities - All of these are activities listed on the statement of cash flows
Advertising activities
What type of account or account classification is Prepaid Insurance? - Expense - Revenue - Equity - Asset - Liability
Asset
Resources owned by a business are referred to as - expenses. - revenues. - stockholders' equity. - liabilities. - assets.
Assets
Which of the following is not considered to be an external user of accounting information? - Company officers (e.g., Company president) - Investors - Creditors - Tax authorities such as the Internal - Revenue Service (IRS) - Labor unions
Company officers (e.g., Company president)
Easy transfer of ownership is a characteristic of which form of business organization? - partnerships and corporations - partnership - Corporation - Sole proprietorship - Sole proprietorships and partnerships
Corporation
Which statement about users of accounting information is correct? - Creditors are considered external users. - Regulatory authorities are considered internal users. - Management is considered an external user. - Labor unions are considered internal users. - Taxing authorities are considered internal users.
Creditors are considered external users.
Payments to a corporation's stockholders are called - debits. - liabilities. - dividends. - revenues. - expenses.
Dividends
Publicly traded U.S. companies must provide shareholders with an annual report. Which of the following is not part of the annual report provided to shareholders? - Statement of cash flows - Internal control certificate - Auditor's report - Management discussion and analysis - Notes to the financial statements
Internal control certificate
Which of the following is an asset? - Dividends - Interest expense - Retained earnings - Inventory - Notes payable
Inventory
Which of the following is an asset? - Interest expense - Dividends - Retained earnings - Inventory - Notes payable
Inventory
Which of the following did not result from the Sarbanes-Oxley Act (SOX)? - Top management must now certify the accuracy of financial information. - The Sarbanes-Oxley Act caused all of these to occur. - The independence of outside auditors increased. - It decreased the oversight role of boards of directors. - Penalties for fraudulent activity increased.
It decreased the oversight role of boards of directors.
Which of the following is also referred to as debt? - Liabilities - Expenses - Revenues - Stockholders' equity - Assets
Liabilities
Which of the following is also referred to as debt? - Revenues - Stockholders' equity - Assets - Liabilities - Expenses
Liabilities
In which of the following sequences are these financial statements usually prepared? - The retained earnings statement is prepared before the income statement. - None of these - The balance sheet is prepared before the income statement. - The balance sheet is prepared before the retained earnings statement. - All of these
None of these
A corporation has which of the following characteristics? - None of these - Owners are not personally liable for its debts. - Harder to raise funds relative to other forms of business - It is the simplest form of business to create - Favorable tax treatment
Owners are not personally liable for its debts.
Which of the following statements concerning internal and external users of accounting information is not correct? - Regulatory authorities are considered internal users. - Taxing authorities are considered external users. - Creditors are considered external users. - Management is considered an internal user. - The company's investors are considered external users
Regulatory authorities are considered internal users.
Which of the following would appear on a balance sheet? - Net cash flows from operating activities - Salaries and wages expense - Dividends - Retained earnings - Service revenue
Retained earnings
Which of the following statements is true regarding the Sarbanes-Oxley Act (SOX)? - SOX eliminated the requirement that company management certify the accuracy of the company's financial statements. - SOX required independent auditors become employees of the companies they audit. - None of these - SOX increased the penalties for financial fraud. Penalties may include fines and imprisonment. - All of these
SOX increased the penalties for financial fraud. Penalties may include fines and imprisonment.
Which of the following would not appear on a balance sheet? - Service revenue - Retained earnings - Equipment - Cash - Accounts payable
Service revenue
Which of the following best describes stockholders' equity? - Stockholders' equity are the economic resources of the firm. - Stockholders' equity are the claims of owners. - Stockholders' equity are the claims of creditors. - Stockholders' equity is the difference between revenues and expenses. - Stockholders' equity is the cash collected from owners.
Stockholders' equity are the claims of owners.
Which of the following best describes stockholders' equity? - Stockholders' equity are the economic resources of the firm. - Stockholders' equity is the difference between revenues and expenses. - Stockholders' equity are the claims of creditors. - Stockholders' equity are the claims of owners. - Stockholders' equity is the cash collected from owners.
Stockholders' equity are the claims of owners.
Which of the following best describes stockholders' equity? - Stockholders' equity is the cash collected from owners. - Stockholders' equity are the claims of owners. - Stockholders' equity are the economic resources of the firm. - Stockholders' equity is the difference between revenues and expenses. - Stockholders' equity are the claims of creditors.
Stockholders' equity are the claims of owners.
What section of a cash flows statement shows the amount of cash received from shareholders in exchange for issuing additional shares of its stock to its shareholders? - This type of cash inflow would not be reported on the statement of cash flows. - The property section - The investing section - The financing section - The operating section
The financing section
Which of the following is required as a result of the Sarbanes-Oxley Act (SOX) passed into law in 2002? - The independence of outsides auditors increased. - All shareholders now have an oversight role of the company's financial activities. - Corporate income tax rates increased. - Companies that go bankrupt must repay shareholders for lost investments. - None of these
The independence of outsides auditors increased.
Which of the following best defines accounting? - The information system that identifies, measures, and communicates economic information to permit informed judgements and decisions by the users of the information. - The action or business of promoting and selling products or services, including market research and advertising. - The organization and coordination of the activities of a business in order to achieve defined objectives. - The management of large amounts of money, especially by governments or large companies. - The processing system and regulatory rules for determining the fair market value of a business organization.
The information system that identifies, measures, and communicates economic information to permit informed judgements and decisions by the users of the information.
Which of the following best defines accounting? - The processing system and regulatory rules for determining the fair market value of a business organization. - The information system that identifies, measures, and communicates the economic events of an organization to interested users. - The system of electronic collection, organization, and communication of valuation information. - The procedures for collecting information about the production of merchandise and services for sale to customers. - The interconnected network of financial information used to track the cash flows of a business organization.
The information system that identifies, measures, and communicates the economic events of an organization to interested users.
Which of the following is the most appropriate definition of accounting information? - A means of collecting business information - The interconnected network of subsystems necessary to operate a business - Electronic collection and organization of vast amounts of financial information - All of these - The information system that identifies, records, and communicates the economic events of an organization to interested users
The information system that identifies, records, and communicates the economic events of an organization to interested users
Which financial statement is divided into three sections including operating activities, investing activities, and financing activities? - The statement of cash flows - The retained earnings statement - The income statement - The balance sheet - The statement of financial position
The statement of cash flows
When a company purchases goods on account from a supplier it has an obligation to pay for the goods. The obligation to pay for these goods is called - cash. - unearned revenue. - notes receivable. - accounts payable. - revenue.
accounts payable.
Retained earnings is - equal to cash. - an equity account. - equal to total assets minus total liabilities. - an asset account. - equal to revenues minus expenses.
an equity account.
The cost of assets consumed or services used is also known as - a liability. - an expense. - an equity. - an asset. - a revenue.
an expense.
When the auditor is satisfied that the financial statements provide a fair representation of the company's financial position and results of operation in accordance with generally accepted accounting principles, the auditor will express - a disclaimer of opinion. - an unqualified opinion. - a qualified opinion. - a certified opinion. - an adverse opinion.
an unqualified opinion.
When the auditor is satisfied that the financial statements provide a fair representation of the company's financial position and results of operation in accordance with generally accepted accounting principles, the auditor will express - an unqualified opinion. - a certified opinion. - a qualified opinion. - an adverse opinion. - a disclaimer of opinion.
an unqualified opinion.
Liabilities - are things of value owned by a business. - are a type of expense. - are owners' claims on a business. - are debts and obligations. - are future economic benefits.
are debts and obligations.
A balance sheet shows - assets, liabilities, and expenses. - revenues, liabilities, and stockholders' equity. - revenues, expenses, and dividends. - expenses, dividends, and stockholders' equity. - assets, liabilities, and equity
assets, liabilities, and equity
The segment of the annual report that presents an opinion regarding the fairness of the presentation of the financial position and results of operations is/are the - auditor's opinion. - financial statements. - income statement. - balance sheet. - management discussion and analysis.
auditor's opinion.
Retained earnings is - equal to stockholders' equity. - equal to revenues minus expenses. - an asset account. - equal to cash. - equal to the amount of net income minus dividends paid since the company began operations.
equal to the amount of net income minus dividends paid since the company began operations.
Retained earnings is - equal to the amount of net income minus dividends paid since the company began operations. - an asset account. - equal to stockholders' equity. - equal to cash. - equal to revenues minus expenses.
equal to the amount of net income minus dividends paid since the company began operations.
Issuing shares of stock in exchange for cash is an example of a(n) - operating activity. - delivering activity. - capital activity. - investing activity. - financing activity.
financing activity.
The portion of the annual report that presents management's views on the company's ability to fund operations and expansion is the - auditor's report. - management discussion and analysis. - notes to the financial statements. - chief executive's officer's reconciliation. - investor analysis report.
management discussion and analysis.
The portion of the annual report that presents management's views on the company's near-term debt paying ability and results of operations are found in the - chief executive's officer's ledger analysis report. - management discussion and analysis. - notes to the financial statements. - president's State of the Company report. - auditor's report.
management discussion and analysis.
The retained earnings statement - reports the assets, liabilities, and stockholders' equity at a specific date. - reports the changes in assets, liabilities, and stockholders' equity over a period of time. - presents the revenues and expenses for a specific period of time. - reports the amounts and causes of changes in retained earnings for a specific period of time such as a year. - summarizes the cash inflows and cash outflows for a period of time partitioned into operating, investing, and financing activities.
reports the amounts and causes of changes in retained earnings for a specific period of time such as a year.
Dividends paid by a company to its shareholders are reported on the company's - retained earnings statement and statement of cash flows. - income statement and retained earnings statement. - balance sheet and statement of cash flows. - income statement and balance sheet. - balance sheet.
retained earnings statement and statement of cash flows.
The heading or title on the income statement identifies all of the following except - all of these appear in the heading or title. - the name of the company - the independent auditor who reviewed the statement. - the type of financial statement. - the time period covered by the statement.
the independent auditor who reviewed the statement.