ACC 290 Orion WileyPLUS Build Your Proficiency
Chapter 1 thru 13 Financial Accounting 7e
Ch 1: Introduction to Financial Statements
Q 1.1: What is the primary purpose of the statement of cash flows?
A to report a company's financing transactions
B to present information about a company's assets and liabilities
C to provide information about cash receipts and cash payments
D to report how much revenue was retained in the business for future growth
Q 1.2:
Which financial statement summarizes the financial position of a company?
A statement of cash flows
B balance sheet
C income statement
D retained earnings statement
Q 1.3: Which financial statement provides information for a specific point in time?
A balance sheet
B statement of cash flows
C retained earnings statement
D income statement
Q 1.4: The income statement reports revenues and expenses and resulting net
income or less for a period in time. (income statement correct answer)
.
, Q 1.5: The income statement does not report cash received from the sale of stock
because it is not considered revenue.
A True
B False
Q 1.6: Torres Travel’s stockholders' equity at the beginning of March 2014 was
$200,000. During the month, the company earned net income of $50,000 and paid
dividends of $10,000. At the end of March 2014, what is the amount of stockholders'
equity?
A $260,000
B $200,000
C $150,000
D $240,000
Q 1.7: According to the basic accounting equation, assets (assets correct
answer)
must equal liabilities plus stockholders' equity on the balance sheet.
Q 1.8: Tonelli Trucking buys a $65,000 truck on credit. Which financial statement will
be affected by this transaction?
A balance sheet only
B income statement, retained earnings statement, and balance sheet
C income statement only
D income statement and retained earnings statement only
Q 1.9:
Which of the following financial statements would be included in an annual report?
A statement of cash flows
B all of the choices are correct
C retained earnings statement
D income statement
Q 1.10: An independent audit of an annual report must be completed by a certified
public accountant
, Q 1.11:
An owner who wants to have limited liability should form which type of business
enterprise?
A a proprietorship
B a sole proprietorship
C a partnership
D a corporation
Q 1.12: Which of the following statements about accounting information is true?
A Accounting communicates financial information about a business enterprise to
both internal and external users.
B Accounting information is used only by internal users who are responsible for
planning and organizing a business enterprise.
C Accounting information is used only by external users with a financial interest
in a business enterprise.
D A business enterprise’s management is the major external user of information.
Q 1.13: Which of the following would NOT be considered internal users of accounting
information for a company?
A marketing representatives
B customers
C technology support managers
D the chief executive officer
Q 1.14: Ethics are the principles of conduct that are used to judge whether decisions
are
A moral or immoral
B honest or dishonest
C all of the choices are correct
D right or wrong
Q 1.15: When a company borrows money from a bank to purchase equipment, this
action is called
, A a liability activity
B an operating activity
C a financing activity
D an investing activity
Q 1.16: Companies can borrow money if they need a source of outside funds.
Borrowing money is called
A equity financing
B debt financing
C bonds payable
D creditors' claims
Q 1.17: Purchasing plant assets that a company needs in order to operate is called
A operating activity
B investing activity
C financing activity
D expanding activity
Q 1.18: The main purpose of operating activities is to
A limit liabilities
B raise funds through borrowing or selling stocks and bonds
C generate revenue to increase profits
D raise funds for investments
Q 1.19: Which of the following components supplement the financial statements in an
annual report?
A management discussion and analysis
B all of the choices are correct
C auditor's report
D notes to the financial statements
Q 1.20: Which of the following is true of a partnership?
A A partnership must have more than one owner.
Chapter 1 thru 13 Financial Accounting 7e
Ch 1: Introduction to Financial Statements
Q 1.1: What is the primary purpose of the statement of cash flows?
A to report a company's financing transactions
B to present information about a company's assets and liabilities
C to provide information about cash receipts and cash payments
D to report how much revenue was retained in the business for future growth
Q 1.2:
Which financial statement summarizes the financial position of a company?
A statement of cash flows
B balance sheet
C income statement
D retained earnings statement
Q 1.3: Which financial statement provides information for a specific point in time?
A balance sheet
B statement of cash flows
C retained earnings statement
D income statement
Q 1.4: The income statement reports revenues and expenses and resulting net
income or less for a period in time. (income statement correct answer)
.
, Q 1.5: The income statement does not report cash received from the sale of stock
because it is not considered revenue.
A True
B False
Q 1.6: Torres Travel’s stockholders' equity at the beginning of March 2014 was
$200,000. During the month, the company earned net income of $50,000 and paid
dividends of $10,000. At the end of March 2014, what is the amount of stockholders'
equity?
A $260,000
B $200,000
C $150,000
D $240,000
Q 1.7: According to the basic accounting equation, assets (assets correct
answer)
must equal liabilities plus stockholders' equity on the balance sheet.
Q 1.8: Tonelli Trucking buys a $65,000 truck on credit. Which financial statement will
be affected by this transaction?
A balance sheet only
B income statement, retained earnings statement, and balance sheet
C income statement only
D income statement and retained earnings statement only
Q 1.9:
Which of the following financial statements would be included in an annual report?
A statement of cash flows
B all of the choices are correct
C retained earnings statement
D income statement
Q 1.10: An independent audit of an annual report must be completed by a certified
public accountant
, Q 1.11:
An owner who wants to have limited liability should form which type of business
enterprise?
A a proprietorship
B a sole proprietorship
C a partnership
D a corporation
Q 1.12: Which of the following statements about accounting information is true?
A Accounting communicates financial information about a business enterprise to
both internal and external users.
B Accounting information is used only by internal users who are responsible for
planning and organizing a business enterprise.
C Accounting information is used only by external users with a financial interest
in a business enterprise.
D A business enterprise’s management is the major external user of information.
Q 1.13: Which of the following would NOT be considered internal users of accounting
information for a company?
A marketing representatives
B customers
C technology support managers
D the chief executive officer
Q 1.14: Ethics are the principles of conduct that are used to judge whether decisions
are
A moral or immoral
B honest or dishonest
C all of the choices are correct
D right or wrong
Q 1.15: When a company borrows money from a bank to purchase equipment, this
action is called
, A a liability activity
B an operating activity
C a financing activity
D an investing activity
Q 1.16: Companies can borrow money if they need a source of outside funds.
Borrowing money is called
A equity financing
B debt financing
C bonds payable
D creditors' claims
Q 1.17: Purchasing plant assets that a company needs in order to operate is called
A operating activity
B investing activity
C financing activity
D expanding activity
Q 1.18: The main purpose of operating activities is to
A limit liabilities
B raise funds through borrowing or selling stocks and bonds
C generate revenue to increase profits
D raise funds for investments
Q 1.19: Which of the following components supplement the financial statements in an
annual report?
A management discussion and analysis
B all of the choices are correct
C auditor's report
D notes to the financial statements
Q 1.20: Which of the following is true of a partnership?
A A partnership must have more than one owner.
