Accounting 1 Ch. 1-7 test review questions – Flashcards

All of the following are examples of manufacturers except: a. Ford b. Amazon.com c. Whirlpool d. Boeing

The three forms of business entities are: a. financing, investing, and operating. b. sole proprietorships, partnerships, and corporations. c. wholesaler, manufacturer, and retailer. d. government, cooperatives, and philanthropic organizations.

Which of the following statements best describes the term "revenues"? a. Revenues represent an outflow of assets resulting from the sale of goods or services. b. Revenues represent assets received from the sale of products or services. c. Revenues represent assets used or consumed in the sale of products or services. d. Revenues represent the dollar amount of bonds sold to the public.

Which one of the following events involves a liability for a business? a. Inventories purchased for cash b. Amounts invested by the owners -------Sh equity c. Loans to be repaid to banks d. Stock sold to the general public-------Sh equity

The costs of doing business through the sale of goods and services are called a. expenses. b. net income. c. dividends. d. revenues.

Which of the following best describes the term "assets"? a. The amount of interest or claim that the owners have in the business. b. The cumulative profits earned by a business less any dividends distributed. c. The economic resources of a business entity. d. The amount of total profits earned by a business since it began operations.

Which of the following would be internal users of accounting information? a. Employees and customers b. Customers and vendors c. Government and banks d. Employees and managers

Which of the following would be classified as external users of financial statements? a. Stockholders and management of the company b. The company's marketing managers c. The creditors and stockholders of the company d. The controller of the company and a company's stockholders

What is the name of the branch of accounting concerned with providing managers and administrators with information to facilitate the planning and control of business operations? a. Management accounting b. Financial accounting c. Bookkeeping d. Auditing

Which of the following invests funds into a business and is considered an owner? a. Lenders b. Bankers c. Creditors d. Stockholders

Which of the following is an organization that lends funds to a business entity and expects repayment of the funds? a. A stockholder b. A creditor c. A partner d. An owner

You are a potential stockholder and are concerned that a particular company you are ready to invest in might have too much debt. Which financial statement would provide you information needed in order to evaluate your concern? a. Balance sheet b. Statement of retained earnings c. Statement of public accounting d. Income statement

Which financial statement would you analyze to determine if a company distributed any of its profits to its shareholders? a. Income Statement b. Statement of Public Accounting c. Statement of Retained Earnings d. Balance Sheet

Which one of the following is an economic obligation for a business entity? a. Amounts owed to creditors b. Materials used in manufacturing products c. Payment of rent for the next year d. Salaries paid to employees for services rendered

Which one of the following is a correct expression of the accounting equation? a. Assets + Owners' Equity = Liabilities b. Assets = Liabilities - Owners' Equity c. Assets = Liabilities + Owners' Equity d. Assets + Liabilities = Owners' Equity

How is the balance sheet linked to the other financial statements? a. There is no link between the balance sheet and other statements, as each contains different accounts and provides different information. b. Retained earnings is added to total assets and reported on the balance sheet. c. Net income increases retained earnings on the statement of retained earnings, which ultimately increases retained earnings on the balance sheet. d. The amount of retained earnings reported on the balance sheet is equal to net income.

Which of the following best describes the term "retained earnings"? a. The amount of total profits earned by a business since it began operations. b. The amount of interest or claim that the owners have on the assets of the business. c. The future economic resources of a business entity. d. The cumulative profits earned by the business less any dividends distributed.

Which one of the following items is correct concerning the time element of financial statements? a. An income statement lists amounts at a specific point in time. b. The balance sheet covers a period of time. c. The statement of retained earnings explains changes during a particular period. d. Both the income statement and the balance sheet cover a period of time.

Which one of the following items appears on a balance sheet? a. Sales revenue b. Cost of goods sold c. Utilities expense d. Accounts payable

Which one of the following correctly represents one of the basic financial statement models? a. Assets - Liabilities = Net Income b. Assets + Liabilities = Owners' Equity c. Beginning Retained Earnings + Net Income - Dividends = Ending Retained Earnings d. Revenues + Expenses = Net Income

Which of the following statements is true? a. Profits distributed to the creditors are called dividends. b. The balance sheet shows the assets, liabilities, and profits of a company. c. Dividends are an expense, and are reported on the income statement as a deduction from net income. d. The income statement reports the revenues and expenses of a company.

Which of the following terms best describes a distribution of the net income of a business to its owners? a. Dividends b. Monetary unit c. Earnings d. Revenue

23 Maestro Company's end-of-year balance sheet consisted of the following amounts: Cash $ 13900 Property, plant, and equipment 70,000 Capital stock 100,000 Retained earnings ? Accounts receivable $ 50,000 Long-term debt 40,000 Accounts payable 20,000 Inventory 35,000 What amount should Maestro report on its balance sheet for total assets? a. $188900 b. $228900 c. $183900 d. $168900

Harbor City Corporation's end-of-year balance sheet consisted of the following amounts: What is Harbor City's retained earnings balance at the end of the current year? Assets = 15000+70000+35000 + 50,000 = 170,000 Liatbilities = 40000+20000 = 60,000 Shareholders equity = assets - liabilities Capital stock + retained earnings = 170,000 - 60,000 100,000 + retained earnings = 110,000 Retained earnings = 10,000 a. $110,000 b. $160,000 c. $170,000 d. $10,000

Leary Corporation's end-of-year balance sheet consisted of the following amounts: What is Leary's total liabilities balance at the end of the current year? a. $3,000 b. $173,000 c. $63,000 d. $110,000

26 Las Palmas Company reported the following items on its financial statements for the year ending December 31, 2014: The income statement for Las Palmas will report net income for the current year in the amount of a. $45,000 b. $465,000 c. $65,000 d. $85,000 -