Acct 701 Module 1 Exam 1_Managerial Use of Accounting Data

Module 1
(T / F) Retained earnings represent undistributed net income.

Select one:

True Correct

False

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Correct. Net income minus dividends yields retained earnings.

The correct answer is 'True'.

Question 2

Correct

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(T / F) The three forms of business organizations are single proprietorship, partnership, and
trust.

Select one:

True

False Correct

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Correct. Corporation, not trust, is the third form.

The correct answer is 'False'.

Question 3

Correct

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(T / F) Accounting rules in the United States are known as International Financial Reporting
Standards (IFRS).

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True

False Correct

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Correct.

The correct answer is 'False'.

Question 4

Incorrect

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(T / F) The income statement shows the profitability of the company and is dated as of a
particular date, such as December 31, 2014.

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True Incorrect

False

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The correct answer is 'False'.

,Question 5

Correct

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(T / F) The three types of business activity are service, merchandising, and manufacturing.

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True Correct

False

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Correct. The accounting for all three of these is covered in this text.

The correct answer is 'True'.

Question 6

Correct

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(T / F) A single proprietorship (aka sole proprietorship) is an unincorporated business owned by
an individual and often managed by that individual.

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True Correct

False

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Correct.

, The correct answer is 'True'.

Question 7

Correct

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(T / F) In a company the person in charge of the accounting activity is called the controller or
chief financial officer.

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True Correct

False

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Correct.

The correct answer is 'True'.

Question 8

Correct

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(T / F) The balance sheet contains the same major headings as appear in the accounting
equation.

Select one:

True Correct

False