Module 2: Mastery Exercise

Questions 1-10 of 10 | Page 1 of 1

Question 1 (1 point)

Subsequent events are those that occur after the balance sheet date but before the statements are issued.

True

False

Question 2 (1 point)

In terms of debits and credits, which of the following accounts have the same normal balances?

a	accounts payable, accounts receivable, notes payable
b	dividends, accounts receivable, notes payable
c	advertising expense, selling expense, accounts receivable
d	land, building, accounts payable
e	common stock, notes payable, land

Question 3 (1 point)

The assets for the balance sheet must equal the liabilities and stockholders' equity.

True

False

Question 4 (1 point)

The responsibility for the preparation and integrity of financial statements rests with management.

True

False

Question 5 (1 point)

If liabilities total $70,000 and stockholders' equity totals $50,000, then total assets must be:

a	$20,000
b	$80,000
c	$120,000
d	$30,000
e	$30,000

Question 6 (1 point)

Tiffin Company had retained earnings of $50,000 at the end of last year. For the current year, income was $20,000 and dividends $15,000. What is the balance in retained earnings at the end of the current year?

a	$85,000
b	$45,000
c	$55,000
d	$60,000
e	none of the answers are correct

Question 7 (1 point)

Which of the following is not a type of audit opinion?

a	unqualified opinion
b	qualified opinion
c	adverse opinion
d	clean opinion
e	disclaimer of opinion

Question 8 (1 point)

At the end of the fiscal year, an adjusting entry is made that increases both interest expense and interest payable. This entry is an application for which accounting principle?

a	full disclosure
b	materiality
c	matching
d	going concern
e	Realization

Question 9 (1 point)

In addition to the balance sheet, the income statement, and the statement of cash flows, a complete set of financial statements must include:

a	an auditor's opinion
b	a ten-year summary of operations
c	a note disclosure of such items as accounting policies
d	historical common-size (percentage) summaries
e	a list of corporate officers

Question 10 (1 point)

Which of the following is a type of audit opinion that a firm would usually prefer?

a	unqualified opinion
b	qualified opinion
c	adverse opinion
d	clear opinion
e	none of the answers are correct