ACC 255 Chp. 1 – Flashcards
25 test answers
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Which of the following is not an external user of accounting data? Entry field with incorrect answer Labor unions Customers Economic planners Chief Financial Officer
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Chief Financial Officer
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Which of the following did not result from the Sarbanes-Oxley Act? Entry field with correct answer Top management must now certify the accuracy of financial information. Auditors cannot provide non-audit services to the same client. Penalties for fraudulent activity increased. Tax rates on corporations increased.
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Tax rates on corporations increased.
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Which of the following is the most appropriate definition of accounting information? Entry field with correct answer A means of collecting information The interconnected network of subsystems necessary to operate a business Electronic collection and organization of vast amounts of financial information The information system that identifies, records, and communicates the economic events of an organization to interested users
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The information system that identifies, records, and communicates the economic events of an organization to interested users
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The payment of dividends is an example of a(n) Entry field with correct answer Investing activity. Delivery activity. Financing activity. Operating activity.
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Financing activity.
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Which of the following is an example of a financing activity? Entry field with incorrect answer Issuing shares of common stock Selling goods on account Buying delivery equipment Buying inventory
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Issuing shares of common stock
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Resources owned by a business are referred to as revenues. assets. stockholders' equity. liabilities.
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assets.
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What kind of classification is cost of goods sold? Expense Liability Asset Revenue
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Expense
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Which of the following would not appear on the income statement? Net income Interest expense Dividends paid Service revenue
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Dividends paid
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Which of the following would not appear on the retained earnings statement? Entry field with incorrect answer Service revenue Net income Beginning retained earnings balance Dividends
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Service revenue
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Net income will result during a time period when Entry field with correct answer revenues exceed expenses. expenses exceed revenues. assets exceed liabilities. assets exceed revenues.
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revenues exceed expenses.
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The financial statements for Harold Corporation contained the following information: Accounts receivable $ 5,000 Sales revenue 75,000 Cash 15,000 Salaries and wages expense 20,000 Rent expense 10,000 How much was Harold's net income? Entry field with correct answer $15,000 $65,000 $45,000 $60,000
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$45,000
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Saira's Maid Service began the year with total assets of $120,000 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 was stockholders' equity at the end of the year? Entry field with correct answer $150,000 $130,000 $110,000 $135,000
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$110,000
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Which statement presents information as of a specific point in time? Entry field with incorrect answer Balance sheet Statement of cash flows Retained earnings statement Income statement
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Balance sheet
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Which financial statement reports assets, liabilities, and stockholders' equity? Retained earnings statement. Statement of cash flows. Balance sheet. Income statement.
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Balance sheet.
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The ending retained earnings balance appears on Both the retained earnings statement and the balance sheet. The income statement and the retained earnings statement. The retained earnings statement only. The balance sheet only.
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Both the retained earnings statement and the balance sheet.
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If total liabilities decreased by $15,000 and stockholders' equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period? $10,000 increase $20,000 increase $10,000 decrease $15,000 decrease
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$10,000 decrease
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Stockholders' equity represents claims of creditors. the difference between revenues and expenses. claims of owners. economics resouces to be used in the future.
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claims of owners.
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As of December 31, 2014, Stoneland Corporation has assets of $3,500 and stockholders' equity of $2,000. How much are the liabilities for Stoneland Corporation as of December 31, 2014? $1,500 $2,000 $1,000 $2,500
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$1,500
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The segment of a corporation's annual report that describes the corporation's accounting methods is the income statement. management discussion and analysis. notes to the financial statements. auditor's report.
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notes to the financial statements.
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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 r auditor's opinion. income statement. balance sheet. financial statements.
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auditor's opinion.
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Which section of the annual report presents highlights of favorable or unfavorable trends and identifies significant events and uncertainties affecting a company's ability to pay near-term obligations, and a company's ability to fund operations and expansion? Financial statements Management discussion and analysis Notes to the financial statements Auditor's report
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Management discussion and analysis
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