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Exam 1: Accounting Information and Decision Making

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Question 71

Multiple Choice

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Which of the following is not a major section in the statement of cash flows?

A) Cash flows from operating activities.
B) Cash flows from financing activities.
C) Cash flows from customers.
D) Cash flows from investing activities.

E) B) and D)
F) A) and B)

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Question 72

Multiple Choice

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GAAP is an abbreviation for:

A) Generally authorized accounting procedures.
B) Generally applied accounting procedures.
C) Generally accepted auditing practices.
D) Generally accepted accounting principles.

E) B) and C)
F) A) and D)

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Question 73

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Financial accounting has an impact on everyday business decisions as well as wide-ranging economic consequences.

Expenses are shown in which of the following statements?

In general,if a company's net income is increasing,so will its stock price.

Which accounting amount best represents value created for stockholders during the current period?

The two categories of stockholders' equity usually found in the balance sheet of a corporation are:

The owners' interest in a corporation is called:

Which of the following statements regarding financial reports is not correct?

The two primary components of stockholders' equity include common stock and revenue.

Use the following information available at the end of 2012 to prepare an income statement and balance sheet on December 31,2012,for Goldie Company. Fees for services performed during the year,$120,000 Accounts payable,$18,500 Accounts receivable,$17,300 Miscellaneous costs for the year,$8,700 Supplies on hand,$2,700 Notes payable outstanding,$30,000 Interest cost on the note for the year,$3,000 Equipment,$84,400 Cash on hand,$11,200 Salaries cost for the year,$71,500 Supplies cost for the year,$9,400 Rent cost for the year,$12,000 Common stock that has been issued,$60,000 Retained earnings at the end of the year,$7,100

Constraints on qualitative characteristics of accounting information include:

Independent auditors express an opinion on the:

McGill purchases additional office equipment to better serves its customers.This purchase is classified as what type of activity?

Limited liability means the stockholders are not held personally responsible for the financial obligations of the corporation.

Given the information below about Thomas Corporation,what was the amount of dividends the company paid in the current period? $\begin{array} { | l | r | } \hline \text { Beginning retained earnings } & \$ 54,000 \\\hline \text { Ending retained earnings } & \$ 110,000 \\\hline \text { Decrease in cash } & \$ 10,000 \\\hline \text { Net income } & \$ 84,000 \\\hline \text { Change in stockholders' equity } & \$ 15,000 \\\hline\end{array}$

An alternative form of the accounting equation is:

Enhancing qualitative characteristics of accounting information include:

If total liabilities of a company equal $16,000 and total stockholders' equity equals $9,000,then total assets equal $7,000.

Use the following appropriate amounts to calculate net income: Revenues,$12,000; Liabilities,$5,000; Expenses,$4,000; Assets,$19,000; Dividends,$4,000.