Question 1

Current assets are assets expected to be converted to cash, sold, or consumed within the next:

Accepted Answer

A)   12 months or within the business's normal operating cycle if longer than a year.
B)   12 months or within the business's normal operating cycle if less than a year.
C)   6 months.
D)   24 months.

Question 2

Exhibit 1.5.1 The following financial statements are to be used to answer the following questions:
  
-Refer to Exhibit 1.5-1. If Jane Austin Bookstore sold 10,000 books during 2012, what is the average selling price per book?

Accepted Answer

A)   $3.50
B)   $6.50
C)   $7.25
D)   $10.00

Question 3

Expenses are increases in retained earnings that result from operations.

Accepted Answer

A) True 
 B)False

Question 4

The balance sheet is also known as the:

Accepted Answer

A)   statement of profit and loss.
B)   operating statement.
C)   assets statement.
D)   statement of financial position.

Question 5

Proprietorships and partnerships:

Accepted Answer

A)   have the same equity accounts as a corporation.
B)   identify paid-in capital and common stock separately.
C)   use a single heading for their equity account called Capital.
D)   do not have equity accounts.

Question 6

Which financial statement must be prepared before the others?

Accepted Answer

A)   Statement of cash flows
B)   Income statement
C)   Balance sheet
D)   Statement of retained earnings

Question 7

Long-term debt is a liability that is payable beyond one year from the date of the financial statements.

Accepted Answer

A) True 
 B)False

Question 8

The CEO of ABC Company owns a vacation home in Hawaii. ABC owns a factory in Detroit where they are headquartered. Which of these properties is considered an asset(s)  of the business?

Accepted Answer

A)   Only the vacation home in Hawaii
B)   Only the factory in Detroit
C)   Both the vacation home in Hawaii and the factory in Detroit
D)   Neither the vacation home in Hawaii nor the factory in Detroit

Question 9

The type of accounting that makes projections to determine if a company should build a new store is:

Accepted Answer

A)   financial accounting.
B)   business accounting.
C)   managerial accounting.
D)   projection accounting.

Question 10

________ means that the accounting information for a company must be prepared in such a way as to be capable of being compared with information from other companies in the same period and consistent with similar information for that company in previous periods.

Accepted Answer

A)   Verifiability
B)   Timeliness
C)   Understandability
D)   Comparability

Question 11

Stockholders' equity is the stockholders' interest in the assets of the corporation.

Accepted Answer

A) True 
 B)False

Question 12

In which form of business ownership are the owners of a business legally distinct from the business?

Accepted Answer

A)   Corporation.
B)   Partnership.
C)   Proprietorship.
D)   All of the above.

Question 13

An investor wishing to assess a company's overall financial position at the end of the period would probably examine the:

Accepted Answer

A)   statement of cash flows and the income statement.
B)   income Statement only
C)   balance sheet.
D)   statement of retained earnings.

Question 14

Common stock:

Accepted Answer

A)   is issued to shareholders as evidence of their ownership.
B)   is only issued by large, international companies.
C)   is the basic component of retained earnings.
D)   represents the amount the company owes its shareholders.

Exam 1: The Financial Statements

Long-term debt is a liability that is payable beyond one year from the date of the financial statements.

Correct Answer
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Expenses are increases in retained earnings that result from operations.

Correct Answer
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Current assets are assets expected to be converted to cash, sold, or consumed within the next:

Correct Answer
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Common stock:

Correct Answer
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Exhibit 1.5.1 The following financial statements are to be used to answer the following questions: -Refer to Exhibit 1.5-1. If Jane Austin Bookstore sold 10,000 books during 2012, what is the average selling price per book?

Correct Answer
verified

Which financial statement must be prepared before the others?

Correct Answer
verified

The balance sheet is also known as the:

Correct Answer
verified

Stockholders' equity is the stockholders' interest in the assets of the corporation.

Correct Answer
verified

The CEO of ABC Company owns a vacation home in Hawaii. ABC owns a factory in Detroit where they are headquartered. Which of these properties is considered an asset(s) of the business?

Correct Answer
verified

The type of accounting that makes projections to determine if a company should build a new store is:

Correct Answer
verified

________ means that the accounting information for a company must be prepared in such a way as to be capable of being compared with information from other companies in the same period and consistent with similar information for that company in previous periods.

Correct Answer
verified

In which form of business ownership are the owners of a business legally distinct from the business?

Correct Answer
verified

Proprietorships and partnerships:

Correct Answer
verified

An investor wishing to assess a company's overall financial position at the end of the period would probably examine the:

Correct Answer
verified

Exam 1: The Financial Statements

Long-term debt is a liability that is payable beyond one year from the date of the financial statements.

Correct AnswerverifiedShow Answer

Expenses are increases in retained earnings that result from operations.

Correct AnswerverifiedShow Answer

Current assets are assets expected to be converted to cash, sold, or consumed within the next:

Correct AnswerverifiedShow Answer

Common stock:

Correct AnswerverifiedShow Answer

Exhibit 1.5.1 The following financial statements are to be used to answer the following questions: -Refer to Exhibit 1.5-1. If Jane Austin Bookstore sold 10,000 books during 2012, what is the average selling price per book?

Correct AnswerverifiedShow Answer

Which financial statement must be prepared before the others?

Correct AnswerverifiedShow Answer

The balance sheet is also known as the:

Correct AnswerverifiedShow Answer

Stockholders' equity is the stockholders' interest in the assets of the corporation.

Correct AnswerverifiedShow Answer

The CEO of ABC Company owns a vacation home in Hawaii. ABC owns a factory in Detroit where they are headquartered. Which of these properties is considered an asset(s) of the business?

Correct AnswerverifiedShow Answer

The type of accounting that makes projections to determine if a company should build a new store is:

Correct AnswerverifiedShow Answer

________ means that the accounting information for a company must be prepared in such a way as to be capable of being compared with information from other companies in the same period and consistent with similar information for that company in previous periods.

Correct AnswerverifiedShow Answer

In which form of business ownership are the owners of a business legally distinct from the business?

Correct AnswerverifiedShow Answer

Proprietorships and partnerships:

Correct AnswerverifiedShow Answer

An investor wishing to assess a company's overall financial position at the end of the period would probably examine the:

Correct AnswerverifiedShow Answer

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