Questions: Accounting for Managers

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| 1. | Cash is another term for Stockholders’ Equity.|
| | | True|
| x| False|
|
| | Score: 1 of 1|

| 2. | Explanatory notes and supporting schedules are an optional part of an annual report.| | | | | True|
| x| False|
|
| | Score: 1 of 1|

| 3. | Debt securities sold to investors that must be repaid at a particular date some years in the future are called| | | | | accounts payable.|
| | notes receivable.|
| | taxes payable.|
| x| bonds payable.|
|
| | Score: 0 of 1|

| 4. | Which activities involve acquiring the resources to run the business?| | | | | Delivering|
| | Financing|
| x| Investing|
| | Operating|
|
| | Score: 1 of 1|

| 5. | Which of the following is an asset?|
| | | | Mortgage Payable|
| x| Investments|
| | Common stock|
| | Retained earnings|
|
| | Score: 1 of 1|

| 6. | Dividends paid|
| | | | increase assets.|
| | increase expenses.|
| | decrease revenues.|
| x| decrease retained earnings.|
|
| | Score: 1 of 1|

| 7. | Net income results when|
| | | | Assets > Liabilities.|
| | Revenues = Expenses.|
| x| Revenues > Expenses.|
| | Revenues < Expenses.|
|
| | Score: 1 of 1|

| 8. | Ashley’s Accessory Shop started the year with total assets of $70,000 and total liabilities of $40,000. During the year the business recorded $110,000 in revenues, $55,000 in expenses, and dividends of $20,000. Stockholders’ equity at the end of the year was| | | | | $60,000.|

| | $55,000.|
| | $65,000.|
| x| $35,000.|
|
| | Score: 0 of 1|

| 9. | If total liabilities increased by $14,000 during a period of time and stockholders’ equity decreased by $6,000 during the same period, then the amount and direction (increase or decrease) of the period’s change in total assets is a(n)| | | | | $14,000 increase.|

| | $20,000 increase.|
| | $8,000 decrease.|
| x| $8,000 increase.|
|
| | Score: 1 of 1|

| 10. | Notes to the financial statements|
| | | | are optional.|
| x| help clarify information presented in the financial statements.| | | are generally brief and few in number.|
| | need not be read in detail if an unqualified opinion accompanies the financial statements.|
|
| | Score: 1 of 1|

| 11. | Most companies use a retained earnings statement rather than a statement of stockholders’ equity.| | | | | True|
| x| False|
|
| | Score: 1 of 1|

| 12. | Two primary objectives of management are to achieve profitability and liquidity.| | x| | | True|
| | False|
|
| | Score: 1 of 1|

| 13. | The economic entity assumption states that assets should be recorded at their cost.| | | | | True|
| x| False|
|
| | Score: 1 of 1|

| 14. | Intangible assets are|
| | | | listed directly under current assets on the balance sheet.| | | not listed on the balance sheet because they do not have physical substance.| | x| listed after property, plant, and equipment.|

| | listed as a long-term investment on the balance sheet.|
|
| | Score: 1 of 1|

| 15. | What is the order in which assets are generally listed on a classified balance sheet?| | | | | current and long-term|
| | current; property, plant and equipment; long-term investments; intangibles| | | current; property, plant and equipment; intangibles; long-term investments| | x| current; long-term investments; property, plant and equipment, intangibles|

|
| | Score: 1 of 1|

| 16. | The following information is available for Bradshaw Corporation and Newell Corporation: (in millions)| Bradshaw Corporation| Newell Corporation| | 2010| 2009| 2010| 2009|
Preferred stock dividends| 25| 10| 0| 30|
Net income| 500| 480...
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