INTERMEDIATE ACCOUNTING. QUESTIONS AND
ANSWERS PROVIDED FOR EXAM REVISION. A+
GRADE GUARANTEED 2024
1. The primary objective of financial reporting is to provide
information A. to the federal government.
B. about the profitability of the enterprise.
C. regarding the cash flows of the enterprise.
D. that is useful for making investment and lending decisions.: D
2. How much are total liabilities if owners' equity is $38,000 and
total assets are $56,000?
A. $94,000
B. $18,000
C. $20,000
D. $74,000: B
3. Revenues are
A. Increases in paid-in capital resulting from the owner’s putting
money into the business.
B. Increases in retained earnings resulting from selling
products or performing services.
C. Increases in liabilities resulting from borrowing money.
D. All of the above.: B
4. Another name for the balance sheet is
A. Statement of operations
B. Statement of earnings
C. Statement of profit and loss
, INTERMEDIATE ACCOUNTING. QUESTIONS AND
ANSWERS PROVIDED FOR EXAM REVISION. A+
GRADE GUARANTEED 2024
D. Statement of financial position: D
5. The number of dividends declared by a company to its owners
is shown on the
A. Balance sheet
B. Income statement
C. Statement of retained earnings
D. Income statement and retained earnings statement: C
6. If assets increased by $20,000 during a given period and
liabilities decreased by $4,000 during the same period,
stockholders' equity must have
A. Increased by $16,000
B. Increased by $24,000
C. Decreased by $24,000
D. Decreased by $16,000: B
7. All of the following accounts generally are classified as current
assets except
A. Furniture C. Office Supplies
B. Accounts Receivable D. Cash: A
8. Increases in stockholders' equity arise from
A. Investments in the business by owners
B. Earning net income
C. Borrowing money
, INTERMEDIATE ACCOUNTING. QUESTIONS AND
ANSWERS PROVIDED FOR EXAM REVISION. A+
GRADE GUARANTEED 2024
D. Both A and B but not C: D
9. The ending balance of retained earnings appears on
A. Both the statement of retained earnings and the balance
sheet
B. The retained earnings statement only
C. The income statement only
D. The balance sheet only: A
10. An owner investment of cash into the business will
A. Increase total assets
B. Decrease total liabilities
C. Decrease stockholders' equity
D. Have no effect on total assets: A
1 1. Purchasing office equipment on account will
A. Increase total assets
B. Increase total liabilities
C. Have no effect on stockholders' equity
D. All of the above: D
12. Performing a service on account will
A. Increase total assets
B. Increase stockholders' equity
C. Decrease total liabilities
D. Both A and B.: D
, INTERMEDIATE ACCOUNTING. QUESTIONS AND
ANSWERS PROVIDED FOR EXAM REVISION. A+
GRADE GUARANTEED 2024
13. Receiving payment from a customer on account (i.e.,
collection of an account receivable) will
A. Increase total assets
B. Have no effect on total assets
C. Decrease liabilities
D. Increase stockholders' equity: B
14. Purchasing a building for $100,000 by paying cash of $20,000
and obtaining a mortgage for $80,000 will
A. Increase both total assets and total liabilities
by $100,000. B. Increase both total assets and
total liabilities by $80,000.
C. Decrease total assets and increase total liabilities by
$20,000.
D. Decrease both total assets and total liabilities by $20,000.: B
15. What is the effect on total assets and stockholders' equity
of paying the electric
bill as soon as it is received each
month? Total assets
Stockholders' equity
A. Decrease Decrease
B. No effect No effect
C. Decrease No effect
ANSWERS PROVIDED FOR EXAM REVISION. A+
GRADE GUARANTEED 2024
1. The primary objective of financial reporting is to provide
information A. to the federal government.
B. about the profitability of the enterprise.
C. regarding the cash flows of the enterprise.
D. that is useful for making investment and lending decisions.: D
2. How much are total liabilities if owners' equity is $38,000 and
total assets are $56,000?
A. $94,000
B. $18,000
C. $20,000
D. $74,000: B
3. Revenues are
A. Increases in paid-in capital resulting from the owner’s putting
money into the business.
B. Increases in retained earnings resulting from selling
products or performing services.
C. Increases in liabilities resulting from borrowing money.
D. All of the above.: B
4. Another name for the balance sheet is
A. Statement of operations
B. Statement of earnings
C. Statement of profit and loss
, INTERMEDIATE ACCOUNTING. QUESTIONS AND
ANSWERS PROVIDED FOR EXAM REVISION. A+
GRADE GUARANTEED 2024
D. Statement of financial position: D
5. The number of dividends declared by a company to its owners
is shown on the
A. Balance sheet
B. Income statement
C. Statement of retained earnings
D. Income statement and retained earnings statement: C
6. If assets increased by $20,000 during a given period and
liabilities decreased by $4,000 during the same period,
stockholders' equity must have
A. Increased by $16,000
B. Increased by $24,000
C. Decreased by $24,000
D. Decreased by $16,000: B
7. All of the following accounts generally are classified as current
assets except
A. Furniture C. Office Supplies
B. Accounts Receivable D. Cash: A
8. Increases in stockholders' equity arise from
A. Investments in the business by owners
B. Earning net income
C. Borrowing money
, INTERMEDIATE ACCOUNTING. QUESTIONS AND
ANSWERS PROVIDED FOR EXAM REVISION. A+
GRADE GUARANTEED 2024
D. Both A and B but not C: D
9. The ending balance of retained earnings appears on
A. Both the statement of retained earnings and the balance
sheet
B. The retained earnings statement only
C. The income statement only
D. The balance sheet only: A
10. An owner investment of cash into the business will
A. Increase total assets
B. Decrease total liabilities
C. Decrease stockholders' equity
D. Have no effect on total assets: A
1 1. Purchasing office equipment on account will
A. Increase total assets
B. Increase total liabilities
C. Have no effect on stockholders' equity
D. All of the above: D
12. Performing a service on account will
A. Increase total assets
B. Increase stockholders' equity
C. Decrease total liabilities
D. Both A and B.: D
, INTERMEDIATE ACCOUNTING. QUESTIONS AND
ANSWERS PROVIDED FOR EXAM REVISION. A+
GRADE GUARANTEED 2024
13. Receiving payment from a customer on account (i.e.,
collection of an account receivable) will
A. Increase total assets
B. Have no effect on total assets
C. Decrease liabilities
D. Increase stockholders' equity: B
14. Purchasing a building for $100,000 by paying cash of $20,000
and obtaining a mortgage for $80,000 will
A. Increase both total assets and total liabilities
by $100,000. B. Increase both total assets and
total liabilities by $80,000.
C. Decrease total assets and increase total liabilities by
$20,000.
D. Decrease both total assets and total liabilities by $20,000.: B
15. What is the effect on total assets and stockholders' equity
of paying the electric
bill as soon as it is received each
month? Total assets
Stockholders' equity
A. Decrease Decrease
B. No effect No effect
C. Decrease No effect
