Question 1

Which of the following would not affect a company's net income?

Accepted Answer

A)  A change in the company's income taxes.
B)  Changing the selling price of a company's product.
C)  Paying a dividend to shareholders.
D)  Advertising a new product.E) A) and C)
F) None of the above

Question 2

In the above statement of cash flows which letters represent cash inflows?

Accepted Answer

A)  B,C,D,F and G.
B)  A,E and G.
C)  B,C,E and F.
D)  A and E E) None of the above
F) All of the above

Question 3

Which of the following are the disadvantages of setting a corporation?

Accepted Answer

A)  Legal fees can be high and separate tax returns have to be filed for owners and the business.
B)  Owners are legally responsible for the liabilities of the corporation.
C)  Owners must be involved in day to day running of the business.
D)  The business and owners are considered as separate legal entities.E) A) and C)
F) A) and D)

Question 4

Which of the following would be reported on the income statement for 2005?

Accepted Answer

A)  Supplies that were purchased and used in 2004 but paid for in 2005.
B)  Dividends that were paid in 2005.
C)  Supplies that were purchased and used in 2005 but paid for in 2004.
D)  All of the above.E) A) and D)
F) None of the above

Question 5

At the end of last year,the company's assets totalled $860,000 and its liabilities totalled $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,

Accepted Answer

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

Question 6

The WC Company borrowed $26,500 from a bank during 2007.

Accepted Answer

A)  This would be listed as ($26,500) under investing activities on the statement of cash flows.
B)  This would be listed as ($26,500) under operating activities on the statement of cash flows.
C)  This would be listed as $26,500 under investing activities on the statement of cash flows.
D)  This would be listed as $26,500 under financing activities on the statement of cash flows.E) None of the above
F) B) and C)

Question 7

Assets are listed on the balance sheet in order of:

Accepted Answer

A)  date acquired.
B)  liquidity.
C)  estimated replacement date.
D)  value.E) B) and C)
F) None of the above

Question 8

A company's balance sheet contained the following information: Assuming Notes Payable is the only other item on the balance sheet:

Accepted Answer

A)  Notes Payable must equal $200,000.
B)  Notes Payable must equal $8,000.
C)  Notes Payable must equal $72,000.
D)  Notes Payable must equal $344,000.E) All of the above
F) C) and D)

Question 9

Which of the following is not true?

Accepted Answer

A)  Assets = Liabilities + Shareholders' Equity
B)  Liabilities = Assets - Shareholders' Equity
C)  Shareholders' Equity + Liabilities - Assets = 0
D)  Liabilities - Shareholders' Equity = AssetsE) All of the above
F) A) and B)

Question 10

Which of the following are the three basic elements of the balance sheet?

Accepted Answer

A)  assets,liabilities,and retained earnings.
B)  assets,liabilities,and contributed capital.
C)  assets,liabilities,and revenues.
D)  assets,liabilities,and shareholders' equity.E) A) and B)
F) A) and C)

Question 11

Questionable ethical practices can make it harder for a company to attract lenders and investors in the future.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 12

The accounting decisions that were made when preparing a company's financial statements are explained in the auditor's report.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a principle of accounting?

Accepted Answer

A)  Matching
B)  Separate entity
C)  Integrity
D)  Time periodE) B) and C)
F) A) and D)

Question 14

What would a financial statement user learn from reading the auditors' report?

Accepted Answer

A)  Whether the financial statements present a fair picture of the company's financial results.
B)  Whether the financial statements are prepared in accordance with GAAP.
C)  Both of the above.
D)  None of the above.E) C) and D)
F) A) and B)

Question 15

A company is involved in operating activities when these:

Accepted Answer

A)  activities are directly related to running the core business to earn profits.
B)  activities involve buying and selling productive resources with long lives (such as buildings,land,equipment,and tools) ,purchasing investments,and lending to others.
C)  activities involve borrowing from banks,repaying bank loans,receiving contributions from shareholders,or paying dividends to shareholders
D)  All of the aboveE) None of the above
F) B) and C)

Question 16

When is the financial information a faithful representation?

Accepted Answer

A)  If it fully depicts the economic substance of business activities
B)  If it allows management to be faithful to its shareholders
C)  Meets the requirements of the stock exchanges
D)  If it makes a difference in decision makingE) A) and B)
F) A) and C)

Exam 1: Business Decisions and Financial Accounting

A company's balance sheet contained the following information: Assuming Notes Payable is the only other item on the balance sheet:

Correct Answer
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Assets are listed on the balance sheet in order of:

Correct Answer
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When is the financial information a faithful representation?

Correct Answer
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A company is involved in operating activities when these:

Correct Answer
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Which of the following are the three basic elements of the balance sheet?

Correct Answer
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At the end of last year,the company's assets totalled $860,000 and its liabilities totalled $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,

Correct Answer
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Which of the following would be reported on the income statement for 2005?

Correct Answer
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Which of the following would not affect a company's net income?

Correct Answer
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Which of the following are the disadvantages of setting a corporation?

Correct Answer
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What would a financial statement user learn from reading the auditors' report?

Correct Answer
verified

Questionable ethical practices can make it harder for a company to attract lenders and investors in the future. BT: Comprehension

Correct Answer
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The WC Company borrowed $26,500 from a bank during 2007.

Correct Answer
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Which of the following is a principle of accounting?

Correct Answer
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Which of the following is not true?

Correct Answer
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The accounting decisions that were made when preparing a company's financial statements are explained in the auditor's report. BT: Knowledge

Correct Answer
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In the above statement of cash flows which letters represent cash inflows?

Correct Answer
verified

Exam 1: Business Decisions and Financial Accounting

A company's balance sheet contained the following information: Assuming Notes Payable is the only other item on the balance sheet:

Correct AnswerverifiedShow Answer

Assets are listed on the balance sheet in order of:

Correct AnswerverifiedShow Answer

When is the financial information a faithful representation?

Correct AnswerverifiedShow Answer

A company is involved in operating activities when these:

Correct AnswerverifiedShow Answer

Which of the following are the three basic elements of the balance sheet?

Correct AnswerverifiedShow Answer

At the end of last year,the company's assets totalled $860,000 and its liabilities totalled $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,

Correct AnswerverifiedShow Answer

Which of the following would be reported on the income statement for 2005?

Correct AnswerverifiedShow Answer

Which of the following would not affect a company's net income?

Correct AnswerverifiedShow Answer

Which of the following are the disadvantages of setting a corporation?

Correct AnswerverifiedShow Answer

What would a financial statement user learn from reading the auditors' report?

Correct AnswerverifiedShow Answer

Questionable ethical practices can make it harder for a company to attract lenders and investors in the future. BT: Comprehension

Correct AnswerverifiedShow Answer

The WC Company borrowed $26,500 from a bank during 2007.

Correct AnswerverifiedShow Answer

Which of the following is a principle of accounting?

Correct AnswerverifiedShow Answer

Which of the following is not true?

Correct AnswerverifiedShow Answer

The accounting decisions that were made when preparing a company's financial statements are explained in the auditor's report. BT: Knowledge

Correct AnswerverifiedShow Answer

In the above statement of cash flows which letters represent cash inflows?

Correct AnswerverifiedShow Answer

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