ACG 2021: Chapter 1

Jeremiah Company recorded the following cash transactions for the year:Collected $460,000 from customersCollected $50,000 from lendersPaid $10,000 to purchase office equipment.Paid $140,000 for salaries.Paid $20,000 in dividends. Paid $260,000 of goods and servicesWhat was the company's net cash provided by operating activities for the year? A. $50,000 B. $200,000 C. $40,000 D. $300,000 E. $60,000

$60,000

Which of the following is not one of the three primary business activities listed on the statement of cash flows? A. All of these are activities listed on the statement of cash flows B. Financing activities C. Operating activities D. Investing activities E. Advertising activities

Advertising activities

Each form of business organization has certain characteristics. Which of the following is a disadvantage of the corporate form of business organization? A. Corporations allow for an easy transfer of ownership. B. Corporations provide their owners with limited liability. C. Corporations survive the death of their owner(s). D. Corporations can attract large amounts of capital investment. E. Corporations are subject to double taxation.

Corporations are subject to double taxation.

Which of the following is true with regards to dividends? A. None of these. B. Dividends represent a portion of corporate profits that are paid to the shareholders. C. Dividends are listed on the balance sheet as a deduction from retained earnings. D. Dividends are a cost of generating revenues and that makes them an expense. E. Dividends should be shown on the balance sheet as assets.

Dividends represent a portion of corporate profits that are paid to the shareholders.

Which of the following would appear on an income statement? A. Net cash flows from operating activities B. Cash C. Interest expense D. Accounts payable E. Unearned revenues

Interest expense

Which of the following is considered to be an external user of accounting information? A. Company officers (e.g., Company president) B. Human resource manager C. Vie president of marketing D. Investors E. Finance personnel

Investors

Which of the following is also referred to as debt? A. Revenues B. Expenses C. Stockholders' equity D. Lliabilities E. Assets

Lliabilities

If the retained earnings account decreases from the beginning of the year to the end of the year, then which of the following must be true? A. There was a net income and no dividends. B. Net income is less than dividends. C. Dividends must have been paid during the year. D. Net income is greater than dividends. E. Additional investments are less than net losses.

Net income is less than dividends.

Which of the following statements is true regarding the Sarbanes-Oxley Act (SOX)? A. None of these B. All of these C. SOX increased the penalties for financial fraud. Penalties may include fines and imprisonment. D. SOX required independent auditors become employees of the companies they audit. E. SOX eliminated the requirement that company management certify the accuracy of the company's financial statements.

SOX increased the penalties for financial fraud. Penalties may include fines and imprisonment.

Which of the following is the most appropriate definition of accounting information? A. The information system that identifies, records, and communicates the economic events of an organization to interested users B. The interconnected network of subsystems necessary to operate a business C. All of these D. Electronic collection and organization of vast amounts of financial information E. A means of collecting business information

The information system that identifies, records, and communicates the economic events of an organization to interested users

The right to receive money in the future is called a(n) A. liability. B. revenue. C. account payable. D. account receivable. E. unearned revenue.

account receivable.

The cost of assets consumed or services used is also known as A. an asset. B. a revenue. C. a liability. D. an expense. E. an equity.

an expense.