ACCT 2000 LOWE-ARDOIN EXAM 3 ACTUAL
/UPDATED 2026 SORTED QUESTIONS AND
ANSWERS /TOP RATED A+ | Practice Questions |
A+ Verified
• What is the basic accounting equation? -✓✓Assets = Liabilities + Stockholders' Equity
• Which is an advantage of corporations relative to partnerships and sole
proprietorships? -✓✓Reduced legal liability for investors
• Which forms of business organization are considered to be separate accounting
entities? -✓✓Sole Proprietorship, Corporations, and Partnerships.
• Which of the following did NOT result from the Sarbanes-Oxley Act? -✓✓Tax rates on
corporations increased.
• The payment of dividends is an example of a(n) -✓✓financing activity
• What kind of classification is cost of goods sold? -✓✓expense
• What section of cash flow statement shows the cash spent on new equipment during
the past accounting period? -✓✓The investing section
• If total liabilities decreased by $15,000 and stockholders' equity increased by $5,000
during a period of time, then total assets must change by what amount and direction
during that same period? -✓✓$10,000 decrease
(Assets = Liabilities + Stockholders' Equity)
• Which is NOT one of the three forms of business organizations? -✓✓Creditorship
• Ease of transferring ownership is a characteristic of which form of business
organization? -✓✓Corporation
• In which forms of business organization are the owners personally liable for all the
debts of the business? -✓✓Sole proprietorships and Partnerships
• The sole proprietorship form of business organization? -✓✓Generally, receives
favorable tax treatment relative to a corporation
• To which of the following questions will internal users want answers? -✓✓All of the
answer choices are correct.
,- what selling price for our product will maximize the company's net income?
- which product line is most profitable?
- is cash sufficient to pay dividend to stockholders?
• Which of the following is NOT an external user of accounting data? -✓✓Chief
Financial Officer
• Which statement about users of accounting information is INCORRECT? -
✓✓Regulatory authorities are considered internal users.
• Which of the following is the most appropriate definition of accounting? -✓✓The
information system that identifies, records, and communicates the economic events of
an organization to interested users.
• Paying interest expense and receiving interest revenue are examples of -
✓✓Operating activates
• Which of the following is NOT one of the three primary business activities? -
✓✓Advertising
• Which of the following is an example of a financing activity? -✓✓Issuing shares of
common stock
• Resources owned by a business are referred to as -✓✓assets
• In terms of the principal types of business activities, paying salaries expense is an
example of an -✓✓operating activity
• On Jan. 10, Novis Company purchased manufacturing equipment for $80,000 cash.
What kind of activity is this? -✓✓Investing activity
• In what section of the statement of cash flows would the purchase of office equipment
for $10,000 cash appear? -✓✓Investing activities
• Which of the following is NOT one of the primary types of the financing activities in the
statement of cash flows? -✓✓Buying equipment
• Which of the following would NOT appear on the income statement? -✓✓Dividends
paid
• Which of the following would NOT appear on the retained earnings statement? -
✓✓service revenue
• Net income will result during a time period when -✓✓revenues exceed expenses
, • The financial statements for Harold Corporation contained the following information:
Accounts receivable: $5,000
Sales Revenue: $75,000
Cash: $15,000
Salaries and wages expense: $20,000
Rent expense: $10,000
How much was Harold's net income? -✓✓$45,000
• In which of the following sequences are the financial statements usually prepared? -
✓✓Income statement, retained earnings statement, balance sheet and statement of
cash flows
• Saira's Maid Service began the year with total assets of $120,000 and stockholders'
equity of $40,000. During the year the company earned $90,000 in net income and paid
$20,000 in dividends. Total assets at the end of the year were $215,000. How much
was stockholders' equity at the end of the year? -✓✓$110,000
(Beg RE + Net Income - Dividends = End RE)
• Which statement presents information as of a specific point in time? -✓✓Balance
Sheet
• How is the issuance of common stock reported on the statement of cash flows? -
✓✓Financing activity
• Which financial statement reports assets, liabilities and stockholders' equity? -
✓✓Balance Sheet
• the ending retained earnings balance appears on -✓✓both the retained earnings
statement and the balance sheet
• Saira's Maid Service began the year with total assets of $120,000 and stockholders'
equity of $40,000. During the year the company earned $90,000 in net income and paid
$20,000 in dividends. Total assets at the end of the year were $215,000. How much are
total liabilities at the end of the year? -✓✓$105,000
(Assets= Liabilities + Stockholders' Equity)
• The balance sheet -✓✓reports the assets, liabilities, and stockholders' equity at a
specific point in time
• Stockholders' equity represents -✓✓claims of owners
• As of December 31, 2022, Stoneland Corporation has assets of $3,500 and
stockholders' equity of $2,000. How much are the liabilities for Stoneland Corporation as
of December 31, 2022? -✓✓$1,500
/UPDATED 2026 SORTED QUESTIONS AND
ANSWERS /TOP RATED A+ | Practice Questions |
A+ Verified
• What is the basic accounting equation? -✓✓Assets = Liabilities + Stockholders' Equity
• Which is an advantage of corporations relative to partnerships and sole
proprietorships? -✓✓Reduced legal liability for investors
• Which forms of business organization are considered to be separate accounting
entities? -✓✓Sole Proprietorship, Corporations, and Partnerships.
• Which of the following did NOT result from the Sarbanes-Oxley Act? -✓✓Tax rates on
corporations increased.
• The payment of dividends is an example of a(n) -✓✓financing activity
• What kind of classification is cost of goods sold? -✓✓expense
• What section of cash flow statement shows the cash spent on new equipment during
the past accounting period? -✓✓The investing section
• If total liabilities decreased by $15,000 and stockholders' equity increased by $5,000
during a period of time, then total assets must change by what amount and direction
during that same period? -✓✓$10,000 decrease
(Assets = Liabilities + Stockholders' Equity)
• Which is NOT one of the three forms of business organizations? -✓✓Creditorship
• Ease of transferring ownership is a characteristic of which form of business
organization? -✓✓Corporation
• In which forms of business organization are the owners personally liable for all the
debts of the business? -✓✓Sole proprietorships and Partnerships
• The sole proprietorship form of business organization? -✓✓Generally, receives
favorable tax treatment relative to a corporation
• To which of the following questions will internal users want answers? -✓✓All of the
answer choices are correct.
,- what selling price for our product will maximize the company's net income?
- which product line is most profitable?
- is cash sufficient to pay dividend to stockholders?
• Which of the following is NOT an external user of accounting data? -✓✓Chief
Financial Officer
• Which statement about users of accounting information is INCORRECT? -
✓✓Regulatory authorities are considered internal users.
• Which of the following is the most appropriate definition of accounting? -✓✓The
information system that identifies, records, and communicates the economic events of
an organization to interested users.
• Paying interest expense and receiving interest revenue are examples of -
✓✓Operating activates
• Which of the following is NOT one of the three primary business activities? -
✓✓Advertising
• Which of the following is an example of a financing activity? -✓✓Issuing shares of
common stock
• Resources owned by a business are referred to as -✓✓assets
• In terms of the principal types of business activities, paying salaries expense is an
example of an -✓✓operating activity
• On Jan. 10, Novis Company purchased manufacturing equipment for $80,000 cash.
What kind of activity is this? -✓✓Investing activity
• In what section of the statement of cash flows would the purchase of office equipment
for $10,000 cash appear? -✓✓Investing activities
• Which of the following is NOT one of the primary types of the financing activities in the
statement of cash flows? -✓✓Buying equipment
• Which of the following would NOT appear on the income statement? -✓✓Dividends
paid
• Which of the following would NOT appear on the retained earnings statement? -
✓✓service revenue
• Net income will result during a time period when -✓✓revenues exceed expenses
, • The financial statements for Harold Corporation contained the following information:
Accounts receivable: $5,000
Sales Revenue: $75,000
Cash: $15,000
Salaries and wages expense: $20,000
Rent expense: $10,000
How much was Harold's net income? -✓✓$45,000
• In which of the following sequences are the financial statements usually prepared? -
✓✓Income statement, retained earnings statement, balance sheet and statement of
cash flows
• Saira's Maid Service began the year with total assets of $120,000 and stockholders'
equity of $40,000. During the year the company earned $90,000 in net income and paid
$20,000 in dividends. Total assets at the end of the year were $215,000. How much
was stockholders' equity at the end of the year? -✓✓$110,000
(Beg RE + Net Income - Dividends = End RE)
• Which statement presents information as of a specific point in time? -✓✓Balance
Sheet
• How is the issuance of common stock reported on the statement of cash flows? -
✓✓Financing activity
• Which financial statement reports assets, liabilities and stockholders' equity? -
✓✓Balance Sheet
• the ending retained earnings balance appears on -✓✓both the retained earnings
statement and the balance sheet
• Saira's Maid Service began the year with total assets of $120,000 and stockholders'
equity of $40,000. During the year the company earned $90,000 in net income and paid
$20,000 in dividends. Total assets at the end of the year were $215,000. How much are
total liabilities at the end of the year? -✓✓$105,000
(Assets= Liabilities + Stockholders' Equity)
• The balance sheet -✓✓reports the assets, liabilities, and stockholders' equity at a
specific point in time
• Stockholders' equity represents -✓✓claims of owners
• As of December 31, 2022, Stoneland Corporation has assets of $3,500 and
stockholders' equity of $2,000. How much are the liabilities for Stoneland Corporation as
of December 31, 2022? -✓✓$1,500
