During the closing process, what happens to dividends?

Group of answer choices

They are closed into total expenses

They are closed into income summary

Dividends are not a temporary account, and are not closed

They are closed into retained earnings

They are closed into net income

Flag this Question

Question 2

3pts

The concept of earnings quality aligns with the conceptual framework's notion of:

Group of answer choices

Completeness

Confirmatory value

Neutrality

Preditive value

Verifiability

Temporary accounts include:

Group of answer choices

Retained earnings

Accumulated depreciation

Unearned revenue

Cost of goods sold

More than one of these answers is correct

Flag this Question

Question 4

3pts

Redbox makes money by getting people to drive to their boxes and rent discs. This business model will almost certainly fail, but Redbox does their accounting as if the firm will live forever. What accounting principal or assumption does this illustrate?

Group of answer choices

Periodicity assumption

Economic entity assumption

The realization principal

Going concern assumption

The matching principal

Flag this Question

Question 5

3pts

Which of the following statements presents a company's financial situation at a particular point in time?

Group of answer choices

Statement of shareholders' equity

More than one of these answers is correct

Income statement

Balance sheet

Statement of cash flows

Flag this Question

Question 6

3pts

A construction company had a side business selling shoes. The shoe business had an operating profit of $20000 for the first six months of the year (January - June), and then management decided to discontinue it and put it up for sale. It sold in November for 100,000. The assets of the shoe business at that time were $50,000. The shoe business had an operating loss of 10,000 July-November. The firm's tax rate is 20%. What amount will the firm report for discontinued operations?

Group of answer choices

48000

32000

40000

60000

None of these

Flag this Question

Question 7

3pts

The most important objective for financial reporting is to provide useful information for:

Group of answer choices

Auditors

Shareholders and creditors

The IRS and SEC

Management

Standard setters like the FASB

Flag this Question

Question 8

3pts

Which of the following is a U.S. GAAP component of other comprehensive income?

Group of answer choices

Loss on discontinued operations

Loss on write-down of goodwill

Interest revenue

Translation gains on foreign currency

Change in revaluation surplus of PPE

Flag this Question

Question 9

3pts

At the end of current year, Sierra Inc. reports an inventory account of $1,000 and a note payable account of $1,500. Meanwhile, the income statement for the current year presents total revenue and total expense of $5,500 and $4,500, respectively. According to the information above, what is the balance of the income summary account before it is closed into retained earnings?

Group of answer choices

None of these

Credit balance of 1000

Debit balance of 1500

Credit balance of 500

Debit balance of 1000

Flag this Question

Question 10

3pts

The Taco Stand conducts all sales on credit. It has $40,000 as a beginning balance in A/R, and an ending balance of $37,000. There were no write-offs. It collected $392,000 in cash payments from customers. What is total sales revenue?

Group of answer choices

355000

389000

392000

352000

395000

Flag this Question

Question 11

3pts

The conceptual framework's qualitative characteristic of faithful representation includes:

Group of answer choices

Freedom from error

Neutrality

All of these

Completeness

None of these

Flag this Question

Question 12

3pts

Which of the following is considered a constraint by the FASB's conceptual framework?

Group of answer choices

Cost effectiveness

Consistency

Accuracy

Timeliness

Verifiability

Flag this Question

Question 13

3pts

A mining company had a side business selling tacos. The taco business had an operating profit of $10000 for the year, but management has decided to discontinue it and put it up for sale. It is expected to sell for 100,000 but by the end of the year had not sold yet. The assets of the taco business at year end were $50,000. The firm's tax rate is 20%. What amount will the firm report for discontinued operations?

Group of answer choices

32000

48000

40000

60000

None of these

Flag this Question

Question 14

3pts

Which of the following would not be an adjusting entry?

Group of answer choices

DR Wage expense, CR Wages payable

DR Bad debt expense, CR Allowance for doubtful accounts

DR Prepaid rent, CR Rent expense

DR Unearned revenue, CR Sales revenue

DR Prepaid rent, CR Cash

Flag this Question

Question 15

3pts

According to the conceptual framework, the two fundamental qualitative characteristics that make accounting information useful for decision making are:

Group of answer choices

Neutrality and completness

Relevance and faithful representation

Consistency and comparability

Fairness and precision

Timeliness and conservatism

Flag this Question

Question 16

3pts

Which of the following would probably need its own line item on an income statement to preserve earnings quality?

Group of answer choices

Goodwill impairment

Utility bill for the factory

Administrative salary

More than one of these answers is correct

Purchase of a factory

Flag this Question

Question 17

3pts

New Shoes paid $12,000 on September 30thfor two years of flood and fire insurance on its office building.The amount paid was debited to insurance expense.What is the required adjusting entry three months later on December 31st?

Group of answer choices

DR Prepaid insurance 10500, CR Insurance expense 10500

DR Insurance expense 2000, CR Prepaid insurance 2000

DR Insurance expense 3000, CR Prepaid insurance 3000

DR Prepaid insurance 12000, CR Insurance expense 12000

DR Insurance expense 1500, CR Prepaid insurance 1500

Flag this Question

Question 18

3pts

Which of the following was NOT the result of Sarbanes-Oxley?

Group of answer choices

Audit committee must be composed of financial experts

The codification of US GAAP

Requirement of CEO and CFO to attest to the integrity of financial statements

Audit firms are not allowed to offer consulting services to their audit client

Creation f the PCAOB to regulate the audit profession

Flag this Question

Question 19

3pts

Losses are:

Group of answer choices

More than one of these answers is correct

Always bad

The result of selling as asset for more than its book value

Decreases in equity resulting from transfers of assets from the company to owners

Decreases in equity from perifpheral transactions of an entity

Flag this Question

Question 20

3pts

Net income:

Group of answer choices

Is another term for comprehensive income

Includes only revenues, expenses, gains, and losses

Is the change in equity from owner-related transactions

Is the change in equity from non-owner transactions

Is the net change in all equity accounts

Flag this Question

Question 21

3pts

In class we discussed a research paper that looked at the distribution of firms that missed or beat their earnings target by varying degrees. What was unusual about the distribution?

Group of answer choices

It was a normal distribution

The distribution was completly random

Almost none of the firms missed their target

It was a normal distribution with a dip at just missed and a spike at just made

It was a normal distribution but with annormally this tails

Flag this Question

Question 22

3pts

Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the

Group of answer choices

Going concern assumption

comparability charcteristic

neutrality characteristic

economic entity assumption

relevance characteristic

Flag this Question

Question 23

3pts

A company is not required to report a per share amount on the face of the income statement for which one of the following items?

Group of answer choices

Net income

Discontinued operations

Continuing operations

All of these must be reported per share

Prior period adjustment

Flag this Question

Question 24

3pts

Comprehensive income includes all of the following except:

Group of answer choices

unrealized holding gains on AFS debt securities

losses on disposal of assets

all of these are part of comprehenisve income

interest revenue

investments by owners

Flag this Question

A pizzeria is popular for its thin and regular crust pizzas. It also has a taco stand that it runs on the side. In a strategic shift, they have decided to sell the taco stand. They also discovered an error in the income statement last year that understated net income (net of tax) by 20000. Consider the following information that may or may not be related to its income statement:

Unrealized holding gain on AFS debt security, net of tax16,000Interest expense5,000Pizzeria expense15,000Taco stand expense10,000Loss on sale of old pizza oven5,000Loss on sale of taco stand15,000Revenue from pizzeria50,000Revenue from taco stand15,000Tax rate20%

Flag this Question

Question 25

3pts

What is operating income (pretax)?

Flag this Question

Question 26

3pts

What is income from continuing operations, net of tax?

Flag this Question

Question 27

3pts

What is net income?

Flag this Question

Question 28

3pts

What is comprehensive income?