financial accounting final exam multiple choice – Flashcards

1. Anadvantageofthecorporateformofbusinessisthat A) it has limited life. B) its owner's personal resources are at stake. C) its ownership is easily transferable via the sale of shares of stock. D) it is simple to establish.

2. WhichofthefollowingstatementsisnottrueregardingtheSarbanes-OxleyAct(SOX)? A) The Act calls for increased oversight responsibilities for boards of directors. B) The Act has resulted in increased penalties for financial fraud by top management. C) The Act calls for decreased independence of outside auditors reviewing corporate financial statements. D) The Act is meant to decrease the likelihood of unethical corporate behavior.

5. Therighttoreceivemoneyinthefutureiscalleda(n) A) account payable. B) account receivable. C) liability. D) revenue.

7. Thecostofassetsconsumedorservicesusedisalsoknownas A) a revenue. B) an expense. C) a liability. D) an asset.

8. Whenexpensesexceedrevenues,whichofthefollowingistrue? A) a net loss results B) a net income results C) assets equal liabilities D) assets are increased

10. HensonCompanybegantheyearwithretainedearningsof$330,000.Duringtheyear,thecompany recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Henson's retained earnings at the end of the year? A) $490,000 B) $410,000 C) $790,000 D) $450,000

12. Jimmy'sRepairShopstartedtheyearwithtotalassetsof$200,000andtotalliabilitiesof$160,000.During the year the business recorded $420,000 in revenues, $220,000 in expenses, and dividends of $40,000. Stockholders' equity at the end of the year was A) $240,000. B) $200,000. C) $160,000. D) $180,000.

15. ElstonCompanycompiledthefollowingfinancialinformationasofDecember31,2014: Service revenue Common stock Equipment Operating expenses Cash Dividends Supplies Accounts payable Accounts receivable Retained earnings, 1/1/14 $700,000 150,000 200,000 625,000 175,000 50,000 25,000 100,000 75,000 375,000 Elston's retained earnings on December 31, 2014 are A) $375,000. B) $450,000. C) $400,000. D) $ 25,000.

18. MarvinServicesCorporationhadthefollowingaccountsandbalances: Accounts payable Accounts receivable Buildings Cash $18,000 Equipment 3,000 Land ? Unearned service revenue 9,000 Total stockholders' equity $21,000 21,000 6,000 ? If the balance of the Buildings account was $45,000 and the equipment was sold for $21,000, what would be the total of stockholders' equity? A) $39,000 B) $54,000 C) $69,000 D) $75,000

21. For2014FielderCorporationreportednetincomeof$30,000;netsales$400,000;andaverageshare outstanding 16,000. There were no preferred dividends. What was the 2014 earnings per share? A) $0.08 B) $0.53 C) $25.00 D) $1.88

22. Declaring a cash dividend will A) increase retained earnings. B) decrease retained earnings. C) increasecommonstock. D) decrease common stock.

23. Reportinganetincomeof$95,000will A) increase retained earnings. B) decrease retained earnings. C) increasecommonstock. D) decrease common stock.