 |
| 1 | |
If assets total $400,000 and owners' equity totals $250,000, then total liabilities must be |
| | A) | $450,000 |
| | B) | $550,000 |
| | C) | $150,000 |
| | D) | $250,000 |
|
|
|
| 2 | |
In which order are liabilities usually listed in the balance sheet |
| | A) | The order in which they were incurred |
| | B) | The order of smallest to largest |
| | C) | Alphabetical order |
| | D) | The order in which they are expected to be repaid |
|
|
|
| 3 | |
Office equipment was purchased for cash. What effect did this transaction have in the financial position of the company? |
| | A) | Assets, decrease; Liabilities, no change; Owners' Equity, decrease. |
| | B) | Assets, decrease; Liabilities, increase; Owners' Equity, no change. |
| | C) | Assets, no change; Liabilities, no change; Owners' Equity, no change. |
| | D) | Assets, increase; Liabilities, increase; Owners' Equity, no change. |
|
|
|
| 4 | |
Office equipment was purchased by issuing a check for $10,000 and a note payable for the balance of $60,000. What effect did this transaction have in the financial position of the company? |
| | A) | Assets, no change; Liabilities, no change; Owners' Equity, no change. |
| | B) | Assets, decrease; Liabilities, increase; Owners' Equity, no change. |
| | C) | Assets, decrease; Liabilities, no change; Owners' Equity, decrease. |
| | D) | Assets, increase; Liabilities, increase; Owners' Equity, no change. |
|
|
|
| 5 | |
A balance sheet, or statement of financial position, is |
| | A) | an expansion of the basic accounting equation. |
| | B) | used to report the results of business operations over a period of time. |
| | C) | composed of four distinct major sections. |
| | D) | prepared ahead of the income statement. |
|
|
|
| 6 | |
The income statement |
| | A) | is a summary of revenues and expenses. |
| | B) | is used to report the results of operations over a specific period of time. |
| | C) | explains, in part, how the company's financial position changed over a specific time period. |
| | D) | is all of the above. |
|
|
|
| 7 | |
The beginning balance of cash was $0. The ending balance of cash is $45,600. In the statement of cash flows, cash flows from operating activities were a positive $24,000, and the cash flows used by investing activities was a negative $6,000. The cash flows from financing activities were which of the following? |
| | A) | Negative cash flow of $28,400 |
| | B) | Positive cash flow of $27,600 |
| | C) | Negative cash flow of $45,600 |
| | D) | Positive cash flow of $18,000 |
|
|
|
| 8 | |
Articulation refers to the relationship among the financial statements. What item in the income statement ties that statement to the balance sheet? |
| | A) | Revenues |
| | B) | Expenses |
| | C) | Net income |
| | D) | all of the above |
|
|
|
| 9 | |
In the short run, what distinguishes liquidity from profitability? |
| | A) | There are no distinguishable differences. |
| | B) | Profitability increases owners' equity, liquidity does not. |
| | C) | Creditors are more interested in profitability than liquidity. |
| | D) | Owners have an interest in profitability but not in liquidity. |
|
|
|
| 10 | |
A 'strong' statement of cash flows would show that the major sources of cash came from which of the following? |
| | A) | Investing activities |
| | B) | Operating activities |
| | C) | Financing activities |
| | D) | Owners |
|
|
.