Account 101- A framewok for Financial counting|
Questions and Answers
1.
Which of the following questions is most likely to be asked by a creditor?
Will the company be capable of repaying its debt when it is due?
What are the company's terms of credit with its suppliers?
Will the company's stock increase in value?
What is the amount of taxes owed to the government? ** Answ** Will the company's
stock increase in value?
2.
Which of the following questions is most likely to be asked by an investor?
What are the company's terms of credit with its suppliers?
What is the amount of taxes owed to the government?
Will the company be able to repay its debt when it is due?
Will the company's stock increase in value? ** Answ** Will the company's stock
increase in value?
3. Which of the following is a feature of the corporate form of business ownership?
Unlimited liability
Lower tax rates
Limited resources
Double taxation ** Answ** Double taxation
4. Which of the following is an alternate form of the accounting equation?
Assets − Liabilities = Stockholders' Equity
Revenues − Expenses = Net Income
Assets = Liabilities − Stockholders' Equity
Expenses − Dividends = Net Income ** Answ** Assets − Liabilities = Stockholders'
Equity
5.
If stockholders' equity is $50,000 and liabilities are $78,000, then assets must equal:
$28,000
$50,000
$78,000
, $128,000 ** Answ** 128,000
6.
Expenses are best defined as:
Amounts owed to creditors.
Amounts the owners have invested in the business.
Costs of providing products and services.
Distributions to stockholders. ** Answ** Costs of providing products and services.
7. Which of the following is not one of the four primary financial statements?
Balance Sheet
Trial Balance
Income Statement
Statement of Cash Flows ** Answ** Trial Balance
8. Use the following amounts to calculate net income: Assets, $165,000; Dividends,
$9,000; Expenses, $61,000; Liabilities, $74,000; Revenues, $82,000.
$12,000
$21,000
$30,000
$91,000 ** Answ** NI=R-E
NI=82,00-61,00=21,00
9. The balance sheet:
Presents the financial position of a company at a point in time.
Indicates if a company is profitable.
Shows the net change in cash over a period of time.
Reports the difference between revenues and expenses. ** Answ** Presents the
financial position of a company at a point in time.
10. The statement of cash flows:
Presents the financial position of a company at a point in time.
Indicates if a company is profitable.
Shows the net change in cash over a period of time.
Reports the difference between revenues and expenses. ** Answ** Presents the
financial position of a company at a point in time.
11. Net income appears in which two financial statements?
Balance Sheet and Statement of Cash Flows
Balance Sheet and Statement of Stockholders' Equity
Questions and Answers
1.
Which of the following questions is most likely to be asked by a creditor?
Will the company be capable of repaying its debt when it is due?
What are the company's terms of credit with its suppliers?
Will the company's stock increase in value?
What is the amount of taxes owed to the government? ** Answ** Will the company's
stock increase in value?
2.
Which of the following questions is most likely to be asked by an investor?
What are the company's terms of credit with its suppliers?
What is the amount of taxes owed to the government?
Will the company be able to repay its debt when it is due?
Will the company's stock increase in value? ** Answ** Will the company's stock
increase in value?
3. Which of the following is a feature of the corporate form of business ownership?
Unlimited liability
Lower tax rates
Limited resources
Double taxation ** Answ** Double taxation
4. Which of the following is an alternate form of the accounting equation?
Assets − Liabilities = Stockholders' Equity
Revenues − Expenses = Net Income
Assets = Liabilities − Stockholders' Equity
Expenses − Dividends = Net Income ** Answ** Assets − Liabilities = Stockholders'
Equity
5.
If stockholders' equity is $50,000 and liabilities are $78,000, then assets must equal:
$28,000
$50,000
$78,000
, $128,000 ** Answ** 128,000
6.
Expenses are best defined as:
Amounts owed to creditors.
Amounts the owners have invested in the business.
Costs of providing products and services.
Distributions to stockholders. ** Answ** Costs of providing products and services.
7. Which of the following is not one of the four primary financial statements?
Balance Sheet
Trial Balance
Income Statement
Statement of Cash Flows ** Answ** Trial Balance
8. Use the following amounts to calculate net income: Assets, $165,000; Dividends,
$9,000; Expenses, $61,000; Liabilities, $74,000; Revenues, $82,000.
$12,000
$21,000
$30,000
$91,000 ** Answ** NI=R-E
NI=82,00-61,00=21,00
9. The balance sheet:
Presents the financial position of a company at a point in time.
Indicates if a company is profitable.
Shows the net change in cash over a period of time.
Reports the difference between revenues and expenses. ** Answ** Presents the
financial position of a company at a point in time.
10. The statement of cash flows:
Presents the financial position of a company at a point in time.
Indicates if a company is profitable.
Shows the net change in cash over a period of time.
Reports the difference between revenues and expenses. ** Answ** Presents the
financial position of a company at a point in time.
11. Net income appears in which two financial statements?
Balance Sheet and Statement of Cash Flows
Balance Sheet and Statement of Stockholders' Equity
