Acct 2610 Spring 2003 Practice
Acct 2610 Spring 2003 Practice Quiz 1 1. The financial statements of all companies, both private and public, must follow generally accepted accounting principles as well as the Securities and Exchange Commission's accounting rules. TRUE FALSE
2. The payment of a cash dividend to stockholders reduces stockholders' equity. TRUE FALSE
3. The financial statement that shows an entity's economic resources and its liabilities is the statement of retained earnings. TRUE FALSE
4. When the auditors give an unqualified opinion, it means the company's financial statements do not conform to generally accepted accounting principles. TRUE FALSE
5. The income statement is an "earnings statement," while the balance sheet is a "position statement." …show more content…
On January 1, 20A, Virginia Company had $22,000 of Retained Earnings. During 20A Virginia earned net income of $40,000 and declared and paid dividends of $20,000. In addition, the company received cash of $15,000 as an additional investment by its owners. Therefore, the ending balance in Retained Earnings at December 31, 20A would be A) $67,000. B) $42,000. C) $57,000. D) $32,000.
8. On a balance sheet, assets are listed in the order of A) dollar amount (largest first). B) date of acquisition (earliest first). C) ease of conversion to cash. D) importance to the operation of the business.
9. During 20A, Burton Company delivered products to customers for which customers paid or promised to pay $3,820,000. The company collected $3,670,000 in cash from customers during the year. Indicate which of these amounts will appear on the income statement and which on the statement of cash flows. A) $3,670,000 appears on both the income statement and statement of cash flows. B) $3,670,000 appears on the statement of cash flows, and $3,820,000 appears on the income statement. C) $3,820,000 appears on both the income statement and the statement of cash flows. D) $3,820,000 appears on the statement of cash flows, and $3,670,000 appears on the income
2. The payment of a cash dividend to stockholders reduces stockholders' equity. TRUE FALSE
3. The financial statement that shows an entity's economic resources and its liabilities is the statement of retained earnings. TRUE FALSE
4. When the auditors give an unqualified opinion, it means the company's financial statements do not conform to generally accepted accounting principles. TRUE FALSE
5. The income statement is an "earnings statement," while the balance sheet is a "position statement." …show more content…
On January 1, 20A, Virginia Company had $22,000 of Retained Earnings. During 20A Virginia earned net income of $40,000 and declared and paid dividends of $20,000. In addition, the company received cash of $15,000 as an additional investment by its owners. Therefore, the ending balance in Retained Earnings at December 31, 20A would be A) $67,000. B) $42,000. C) $57,000. D) $32,000.
8. On a balance sheet, assets are listed in the order of A) dollar amount (largest first). B) date of acquisition (earliest first). C) ease of conversion to cash. D) importance to the operation of the business.
9. During 20A, Burton Company delivered products to customers for which customers paid or promised to pay $3,820,000. The company collected $3,670,000 in cash from customers during the year. Indicate which of these amounts will appear on the income statement and which on the statement of cash flows. A) $3,670,000 appears on both the income statement and statement of cash flows. B) $3,670,000 appears on the statement of cash flows, and $3,820,000 appears on the income statement. C) $3,820,000 appears on both the income statement and the statement of cash flows. D) $3,820,000 appears on the statement of cash flows, and $3,670,000 appears on the income