MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) During the fiscal year ended 2016, a company had revenues of $400,000, cost of goods sold of $20.000, and an income tax rate of 30 percent on income before income taxes. What was the company's 2016 wat income? A) 584,000 B) $400,000 C) S 120,000 D$36,000 2) With regard to relationships among financial statements, which of the following is true? A) The statement of cash flows affects the income statement B) The results of the statement of stockholders' equity affect the income statement C) The results of the statement of cash flows affect the statement of stockholders' equity. D) The income statement affects the results of the statement of retained earnings 3) Atlantic Corporation reported the following amounts at the end of the first year of operations Common stock Sales revenue Total assets Dividends declared Total liabilities $200,000 $800,000 $600,000 $40,000 $320,000 What are the retained earnings of Atlantic at the end of the year, and what amount of expenses were incurred during the year? A) Retained earnings are $80,000 and expenses incurred totaled 5680,000 B) Retained earnings are $280,000 and expenses incurred totaled $520,000. C) Retained earnings are $280,000 and expenses incurred totaled $480,000 D) Retained earnings are $80,000 and expenses incurred totaled $720,000 4) During 2016. Canton Company's assets increased $95.500 and the liabilities decreased $17,300. Canton Company's stockholders' equity at December 31, 2016 was $211.500. What amount was stockholders' equity at January 1, 2016 A) S324,300 B) $133,300. C) $289,700 D) $98,700. 5) Which of the following has the legal authority to determine financial reporting in the United States A Public Company Accounting Oversight Board B) Financial Accounting Standards Board. C) Securities and Exchange Commission D) American Accounting Association 6) Which of the following describes the primary objective of financial accounting? A) To provide useful financial information only to stockholders. B) To provide useful financial information about a business to help internal parties make informed decisions C) To provide information about a business' future business strategies D) To provide useful financial information about a business to help external parties make informed decisions. 7) Which of the following transactions will cause both the left and right side of the accounting equation to decrease? A) Purchasing equipment using cash. B) Borrowing money from a bank C) Paying a supplier for inventory we previously purchased on account. D) Collecting cash from a customer who owed us money. 8).Sales revenue less cost of goods sold is called A net profit B. gross profit C. net income. D. marginal income 9) Which of the following is included within current assets on a classified balance sheet? A) Land. B) Inventory C) A truck. D) Intangible assets 10) The journal entry to record a credit sale of merchandises a Cash Sales Revenue b. Cash Service Revenue c. Accounts Receivable Service Revenue d. Accounts Receivable Sales Revenue 11. On a classified balance sheet, inventory is classified as a) an intangible asset b) property, plant, and equipment. c) a current asset. d) a long-term investment 12) Which of the following correctly describes the impact of collecting cash from customers for services to be provided in the future? A) Assets and revenues increase. B) Assets and liabilities increase C) Assets and operating income increase. D) Assets and stockholders' equity increase 13) Which is the correct order of the following steps in the accounting cycle? a) Prepare an unadjusted trial balance, journalize and post adjusting entries, journalize and post the closing entries, and prepare financial statements. b) Prepare an unadjusted trial balance, journalize and post adjusting entries, prepare financial statements, and journalize and post the closing entries. e) Journalize and post adjusting entries, journalize and post the closing entries, prepare financial statements, and prepare an adjusted trial balance. d) Prepare financial statements, journalize and post adjusting entries, journalize and post the closing entries, and prepare a post-closing trial balance. 14) Closing entries are necessary for a temporary accounts only. b. permanent accounts only. c. both permanent and temporary accounts. d. permanent or real accounts only. 15) Which of the following correctly describes the closing entry process? a) The closing process creates a zero balance at the end of each period for all accounts on the year-end trial balance. b) The closing entries are usually prepared prior to the adjusted trial balance. c) The closing process creates a zero balance in all temporary accounts at the end of each period, d) The closing process reduces the balances in the permanent accounts to zero at the end of each period