MGT 11A - Chapter 1 Practice Quiz
Ending liabilities were $67,000, beginning equity was $87,000, common stock issued during year totaled $31,000, expenses for the year were $22,000, dividends declared totaled $13,000, ending equity for the year was $181,000, and beginning assets for the year were $222,000. What are the ending assets for the year?
A. $154,000 B. $134,000 C. $212,000 D. $248,000 E. $155,000 --- Correct Answer: D Explanation: $67,000 + $181,000 = $248,000
Ending liabilities were $67,000, beginning equity was $87,000, common stock issued during year totaled $31,000, expenses for the year were $22,000, dividends declared totaled $13,000, ending equity for the year was $181,000, and beginning assets for the year were $222,000. What were beginning liabilities for the year?
A. $154,000 B. $155,000 C. $212,000 D. $248,000 E. $135,000 --- Correct Answer: E Explanation: $222,000 - $87,000 = $135,000
Beginning assets were $437,600, beginning liabilities were $262,560, common stock issued during the year totaled $45,000, revenue for the year was $414,250, expenses for the year were $280,000, dividends declared were $22,700, and ending liabilities were $350,000. What were the ending assets for the year?
A. $700,160 B. $612,560 C. $787,600 D. $681,590 E. $1,159,410 --- Correct Answer: B Explanation: ($437,600 - $262,560) + $45,000 + $414,250 - $280,000 - $22,700 = $331,590 (end. equity) + $350,000 = $681,590
Beginning assets were $437,600, beginning liabilities were $262,560, common stock issued during the year totaled $45,000, revenue for the year was $414,250, expenses for the year were $280,000, dividends declared were $22,700, and ending liabilities were $350,000. What was the beginning equity for the year?
A. $700,160 B. $787,600 C. $187,600 D. $612,560 E. $175,040 --- Correct Answer: E Explanation: $437,600 - $262,560 = $175,040
Rent expense that is paid with cash appears on which of the following statements?
A. Balance sheet. B. Income statement. C. Statement of retained earnings. D. Schedule of accounts receivable. E. Statement of cash received. --- Correct Answer: B
The income statement reports all of the following except:
A. Revenues earned by a business. B. Expenses incurred by a business. C. Assets owned by a business. D. Net income or loss earned by a business. E. The time period over which the earnings occurred. --- Correct Answer: C
Which of the following statements is not true about assets?
A. They are economic resources owned or controlled by the business. B. They are expected to provide future benefits to the business. C. They appear on the balance sheet. D. They appear on the statement of retained earnings. E. Claims on them are shared between creditors and owners. --- Correct Answer: D
A financial statement providing information that helps users understand a company's financial status and lists the types and amounts of assets, liabilities, and equity as of a specific date is called a(n):
Balance Sheet
Businesses can take all of the following forms except:
Common Stock
The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the amount of cash or cash equivalent given in exchange is the:
Cost Principle
Which of the following accounting principles would prescribe that all goods and services purchased are recorded at cost?
Cost Principle
The private board that currently has the authority to establish U.S. generally accepted accounting principles is the:
FASB
Why are ethics crucial to accounting?
For accounting information to be useful, it must be trusted and therefore the result of ethical decisions.
The principle prescribing that financial statements reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:
Going-concern Principle
The organization that attempts to create more harmony among the accounting practices of different countries by identifying preferred practices and encouraging their worldwide acceptance is the:
IASB
The financial statement that reports whether the business earned a profit and also lists the types and amounts of the revenues and expenses is called a(n):
Income Statement
Recording the items on the financial statements in dollars is done because of the:
Monetary Unit Principle
The accounting guideline prescribing that financial statement information be supported by independent, unbiased evidence other than someone's belief or opinion is the:
Objectivity Principle
Which of the following elements are found on the balance sheet?
Retained Earnings
The principle that (A) requires revenue to be recognized at the time it is earned, (B) allows the inflow of assets associated with revenue to be in a form other than cash, and (C) measures the amount of revenue as the cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services is called the:
Revenue Recognition Principle
Which of the following elements are found on the income statement?
Salaries Expense
Cash investments by owners in exchange for stock are listed on which of the following statements?
Statement of Cash Flows
The financial statement that describes where a company's cash came from and how it was spent during the period is the:
Statement of Cash Flows
Which accounting assumption assumes that all accounting information can be reported monthly or yearly?
Time Period Assumption
Expenses:
are the costs of assets or services used to earn revenues
Resources owned or controlled by a company that are expected to yield benefits are:
assets
A company borrows $125,000 from the Eastside Bank and receives the loan proceeds in cash. This represents a(n):
financing activity
Technological Advancement _________.
has freed accounting professionals to concentrate more on the analysis and interpretation of information
The owners of a partnership:
have unlimited liability
Congress passed the Sarbanes-Oxley Act to
help curb financial abuses at companies that issue their stock to the public
The International Accounting Standards Board (IASB):
hopes to create harmony among accounting practices of different countries
A limited partnership:
includes a general partner with unlimited liability
Generally accepted accounting Principles:
intend to make information on the financial statements relevant, reliable, and comparable
A company acquires equipment for $75,000 cash. This represents a(n):
investing activity
Social responsibility:
is a concern for the impact of one's actions on society as a whole
U.S. government bonds are:
low-risk and low-return investments
Internal users of accounting information always include:
managers
The objectivity principle:
means that information is supported by independent, unbiased evidence
Another name for equity is:
net assets
An example of a financing activity is:
obtaining a long-term loan.
The major activities of a business include:
operating, investing, financing
An example of an operating activity is:
paying wages
The primary objective of financial accounting is to:
provide financial statements to help external users analyze and interpret an organization's activities
An example of an investing activity is:
purchasing land
Increases in retained earnings from a company's earnings activities are:
revenues
An asset is:
something the company owns
Ethical behavior requires:
that an auditor's pay not depend on the figures in the client's reports
A balance sheet lists:
the types and amounts of assets, liabilities and equity of a business as of a specific date
Which of the following statements best describes the relationship of U.S. GAAP and IFRS?
they are similar but not identical
What is the primary purpose of accounting?
to identify, record, and communicate business transactions