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| 1 | |
Which of the following financial statements is for a particular date rather than a period of time? |
| | A) | The income statement. |
| | B) | The cash flow statement. |
| | C) | The statement of stockholders' equity. |
| | D) | The balance sheet. |
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| 2 | |
Which of the following items would be shown as part of the Stockholders' Equity on the balance sheet? |
| | A) | Cash |
| | B) | Notes Payable |
| | C) | Retained Earnings |
| | D) | Accounts Receivable |
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| 3 | |
Assets equal $450,000, liabilities equal $120,000, and common stock equals $200,000. What is the dollar amount of retained earnings? |
| | A) | $80,000 |
| | B) | $330,000 |
| | C) | $320,000 |
| | D) | $130,000 |
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| 4 | |
A company sold $400,000 of merchandise for cash and $120,000 of merchandise on credit to customers who will pay for the merchandise in a later time period. How much revenue should be reported on the income statement of the current time period? |
| | A) | $280,000 |
| | B) | $520,000 |
| | C) | $400,000 |
| | D) | $120,000 |
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| 5 | |
The beginning balance of retained earnings was $7,500. The dividends paid to stockholders were $1,500. The ending balance of retained earnings is $5,000. What was the net income or net loss for the accounting period? |
| | A) | net loss of $1,000 |
| | B) | net income of $1,000 |
| | C) | net loss of $2,000 |
| | D) | net income of $2,500 |
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| 6 | |
Which cash flow activity is related to borrowing money on a long-term basis? |
| | A) | operating activities |
| | B) | investing activities |
| | C) | financing activities |
| | D) | investing and financing activities |
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| 7 | |
Which of the following transactions would be considered an investing activity on a Statement of Cash Flows?
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| | A) | a |
| | B) | b |
| | C) | c |
| | D) | d |
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| 8 | |
Which of the following would not appear on an income statement? |
| | A) | Sales revenue |
| | B) | Accounts payable |
| | C) | Rent expense |
| | D) | Cost of goods sold |
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| 9 | |
Which organization has primary responsibility for developing United States' generally accepted accounting principles (GAAP)? |
| | A) | American Institute of Certified Public Accountants (AICPA) |
| | B) | Financial Accounting Standards Board (FASB) |
| | C) | Securities and Exchange Commission (SEC) |
| | D) | Internal Revenue Service (IRS) |
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| 10 | |
The primary purpose of an audit (examination) of the financial reports of a company is to: |
| | A) | uncover fraud. |
| | B) | determine who is guilty of malpractice. |
| | C) | determine whether the financial reports conform to GAAP. |
| | D) | examine every document and transaction to verify it was accurately reported. |
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