1. A corporation has which of the following set of characteristics?

a. Shared control, tax advantages, increased skills and resources

b. Simple to set up and maintains control with founder

c. Easier to transfer ownership and raise funds, no personal liability

d. Harder to raise funds and gives owner control

2. An item is considered material if

a. it doesnt costs a lot of money.

b. it is of a tangible good.

c. it is likely to influence the decision of an investor or creditor.

d. the cost of reporting the item is greater than its benefits.

3. The accounting equation may be expressed as

a. Assets = Stockholders Equity Liabilities.

b. Assets = Liabilities + Stockholders Equity.

c. Assets + Liabilities = Stockholders Equity.

d. Assets + Stockholders Equity = Liabilities.

4. If total liabilities decreased by $50,000 and stockholders equity increased by $10,000 during a period of time, then total assets must change by what amount and direction during that same period?

a. $40,000 decrease

b. $40,000 increase

c. $50,000 increase

d. $60,000 increase

5. For 2014 Kuhlman Corporation reported net income of $28,000; net sales $400,000; and average share outstanding 16,000. There were no preferred dividends. What was the 2014 earnings per share?

a. $1.75

b. $0.57

c. $25.00

d. $0.07

6. Generally accepted accounting principles are:

a. a set of standards and rules that are recognized as a general guide for financial reporting.

b. usually established by the Internal Revenue Service.

c. the guidelines used to resolve ethical dilemmas.

d. fundamental truths that can be derived from the laws of nature.

7. A company using the same accounting principles from year to year is an application of

a. timeliness.

b. consistency.

c. full disclosure.

d. materiality.

8. Which accounts normally have debit balances?

a. Assets, expenses, and revenues

b. Assets, expense, and retained earnings

c. Assets, liabilities, and dividends

d. Assets, expenses, and dividends

9. Winrow Company showed the following balances at the end of its first year:

Cash $11,000

Prepaid insurance 500

Accounts receivable 2,500

Accounts payable 2,000

Notes payable 3,000

Common stock 5,000

Dividends 500

Revenues 17,000

Expenses 12,500

What did Winrow Company show as total credits on its trial balance?

a. $27,500

b. $27,000

c. $26,500

d. $28,000