IU Kelley A100 Final Exam Questions with Verified
Correct Answers
Which of the following statements are true regarding stockholders?
A. They are creditors of the company.
B. They are owners of the company.
C. They expect to receive interest on their investment.
D. They expect to receive their investment back at a specified point in time. -
CORRECT ANSWER -B. They are owners of the company
Which of the following is correctly classified?
A. Selling stock to stockholders is an investing cash flow.
B. Paying for operations of the business is an investing cash flow.
C. Buying a building is an investing cash flow.
D. Borrowing money from the bank is an operating cash flow. - CORRECT ANSWER
-C. Buying a building is an investing cash flow.
Dividends are
A. required to be paid to creditors.
B. voluntary payments made by the company to creditors.
C. payments made to both creditors and stockholders.
D. payments made to stockholders. - CORRECT ANSWER -D. payments made to
stockholders.
Which of the following is true regarding the SEC?
,A. It is responsible for preparing the financial statements of all publicly-held
companies.
B. Its rules and regulations apply to all companies, both public and private.
C. It was established in 1934
D. It comes under the control of the FASB.
E. It was enacted as a result of Sarbanes-Oxley. - CORRECT ANSWER -Which of the
following is true regarding the SEC?
Which of the following is NOT one of the Big Four?
A. E&Y
B. Deloitte
C. PwC
D. KPMG
E. FRST - CORRECT ANSWER -E. FRST
Which of the following is true?
A. GAAP gives less guidance that IFRS.
B. GAAP is a principles-based system.
C. UASB are the rules that companies based in most other countries are required
to use.
D. GAAP are the rules companies based in the US are required to use. - CORRECT
ANSWER -D. GAAP are the rules companies based in the US are required to use.
Which of the following is a liability account?
, A. Utilities payable
B. Equipment
C. Common stock
D. Retained earnings - CORRECT ANSWER -A. utilities payable
Which of the following is true of retained earnings?
A. It is the amount received when common stock was first issued.
B. It is all the net incomes the company has earned since it first started in business
minus any dividends paid.
C. It is the amount of cash the company has at the end of the period.
E. It is the balance the company owes to customers at the end of the period. -
CORRECT ANSWER -B. It is all the net incomes the company has earned since it
first started in business minus any dividends paid.
Which of the following is true?
A. Assets = liabilities + retained earnings
B. Assets - retained earnings = liabilities
C. Assets - liabilities = stockholders' equity
D. Assets + liabilities = stockholders' equity - CORRECT ANSWER -C. Assets -
liabilities = stockholders' equity
Which of the following statements are true?
A. The Balance Sheet is in balance when net income equals ending retained
earnings.
Correct Answers
Which of the following statements are true regarding stockholders?
A. They are creditors of the company.
B. They are owners of the company.
C. They expect to receive interest on their investment.
D. They expect to receive their investment back at a specified point in time. -
CORRECT ANSWER -B. They are owners of the company
Which of the following is correctly classified?
A. Selling stock to stockholders is an investing cash flow.
B. Paying for operations of the business is an investing cash flow.
C. Buying a building is an investing cash flow.
D. Borrowing money from the bank is an operating cash flow. - CORRECT ANSWER
-C. Buying a building is an investing cash flow.
Dividends are
A. required to be paid to creditors.
B. voluntary payments made by the company to creditors.
C. payments made to both creditors and stockholders.
D. payments made to stockholders. - CORRECT ANSWER -D. payments made to
stockholders.
Which of the following is true regarding the SEC?
,A. It is responsible for preparing the financial statements of all publicly-held
companies.
B. Its rules and regulations apply to all companies, both public and private.
C. It was established in 1934
D. It comes under the control of the FASB.
E. It was enacted as a result of Sarbanes-Oxley. - CORRECT ANSWER -Which of the
following is true regarding the SEC?
Which of the following is NOT one of the Big Four?
A. E&Y
B. Deloitte
C. PwC
D. KPMG
E. FRST - CORRECT ANSWER -E. FRST
Which of the following is true?
A. GAAP gives less guidance that IFRS.
B. GAAP is a principles-based system.
C. UASB are the rules that companies based in most other countries are required
to use.
D. GAAP are the rules companies based in the US are required to use. - CORRECT
ANSWER -D. GAAP are the rules companies based in the US are required to use.
Which of the following is a liability account?
, A. Utilities payable
B. Equipment
C. Common stock
D. Retained earnings - CORRECT ANSWER -A. utilities payable
Which of the following is true of retained earnings?
A. It is the amount received when common stock was first issued.
B. It is all the net incomes the company has earned since it first started in business
minus any dividends paid.
C. It is the amount of cash the company has at the end of the period.
E. It is the balance the company owes to customers at the end of the period. -
CORRECT ANSWER -B. It is all the net incomes the company has earned since it
first started in business minus any dividends paid.
Which of the following is true?
A. Assets = liabilities + retained earnings
B. Assets - retained earnings = liabilities
C. Assets - liabilities = stockholders' equity
D. Assets + liabilities = stockholders' equity - CORRECT ANSWER -C. Assets -
liabilities = stockholders' equity
Which of the following statements are true?
A. The Balance Sheet is in balance when net income equals ending retained
earnings.
