Page 1 of 17
ACCT 6010 EXAM 1 REVIEW | FREQUENTLY
TESTED QUESTIONS WITH CORRECT
ANSWERS | BRAND NEW!
An increase in common stock would be reflected in the
statement of stockholders' equity.
Select one:
True
False - ✔✔✔ Correct Answer > True
Rationale: The statement of stockholders' equity reports on
changes in the accounts that make up stockholders' equity. This
includes contributed capital, retained earnings, and other equity.
In a recent year, the total assets of Microsoft Corporation equal
$258,848 million, and its equity is $82,718 million.
a. What is the amount of its liabilities?
b. Does Microsoft receive more financing from its owners or
nonowners?
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c. What percentage of financing is provided by Microsoft's
owners?Round answer to one decimal place (ex: 0.2345 = 23.5%).
- ✔✔✔ Correct Answer > a. 176,130 million
b. Nonowners
c. 32%
Starbucks reports net income for 2018 of $4,518.3 million. Its
stockholders' equity is $5,450.1 million and $1,169.5 million for
2017 and 2018, respectively.
a. Compute its return on equity for 2018. Round answer to one
decimal place (ex: 0.2345 = 23.5%)
b. Starbucks repurchased over $7,208.7 million of its common
stock in 2018. Did this repurchase increase or decrease
Starbucks' ROE?
ROE usually decreases since the repurchase of shares reduces
the denominator (avg. stockholders' equity).
ROE usually increases since the repurchase of shares reduces
the denominator (avg. stockholders' equity).
ROE usually increases since the repurchase of shares increases
the denominator (avg. stockholders' equity).
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ROE usually decreases since the repurchase of shares increases
the denominator (avg. stockholders' equity).
c. If Starbucks had not repurchased common stock in 2018, what
would ROE have been? Note: Round answer to one - ✔✔✔
Correct Answer > a. 136.5%
b. ROE usually increases since the repurchase of shares reduces
the denominator (avg. stockholders' equity).
c. 65.3%
A primary goal of managerial accounting is to provide
information to investment managers who analyze a company's
stock for external investors.
Select one:
True
False - ✔✔✔ Correct Answer > False
Rationale: Providing information for external users is the role of
financial accounting, not managerial accounting. The role of
managerial accounting is to provide information useful to
internal managers.
ACCT 6010 EXAM 1 REVIEW | FREQUENTLY
TESTED QUESTIONS WITH CORRECT
ANSWERS | BRAND NEW!
An increase in common stock would be reflected in the
statement of stockholders' equity.
Select one:
True
False - ✔✔✔ Correct Answer > True
Rationale: The statement of stockholders' equity reports on
changes in the accounts that make up stockholders' equity. This
includes contributed capital, retained earnings, and other equity.
In a recent year, the total assets of Microsoft Corporation equal
$258,848 million, and its equity is $82,718 million.
a. What is the amount of its liabilities?
b. Does Microsoft receive more financing from its owners or
nonowners?
,Page 2 of 17
c. What percentage of financing is provided by Microsoft's
owners?Round answer to one decimal place (ex: 0.2345 = 23.5%).
- ✔✔✔ Correct Answer > a. 176,130 million
b. Nonowners
c. 32%
Starbucks reports net income for 2018 of $4,518.3 million. Its
stockholders' equity is $5,450.1 million and $1,169.5 million for
2017 and 2018, respectively.
a. Compute its return on equity for 2018. Round answer to one
decimal place (ex: 0.2345 = 23.5%)
b. Starbucks repurchased over $7,208.7 million of its common
stock in 2018. Did this repurchase increase or decrease
Starbucks' ROE?
ROE usually decreases since the repurchase of shares reduces
the denominator (avg. stockholders' equity).
ROE usually increases since the repurchase of shares reduces
the denominator (avg. stockholders' equity).
ROE usually increases since the repurchase of shares increases
the denominator (avg. stockholders' equity).
, Page 3 of 17
ROE usually decreases since the repurchase of shares increases
the denominator (avg. stockholders' equity).
c. If Starbucks had not repurchased common stock in 2018, what
would ROE have been? Note: Round answer to one - ✔✔✔
Correct Answer > a. 136.5%
b. ROE usually increases since the repurchase of shares reduces
the denominator (avg. stockholders' equity).
c. 65.3%
A primary goal of managerial accounting is to provide
information to investment managers who analyze a company's
stock for external investors.
Select one:
True
False - ✔✔✔ Correct Answer > False
Rationale: Providing information for external users is the role of
financial accounting, not managerial accounting. The role of
managerial accounting is to provide information useful to
internal managers.
