Which organization, in addition to the Financial Accounting Standards Board (FASB), occasionally issues authoritative rules for financial statements?

a. The Accounting Profession

b. Internal Revenue Service (IRS)

c. International Accounting Standards Board (IASB)

d. Securities and Exchange Commission (SEC)

Which concept is the reason the dollar is used in the preparation of financial statements?

a. Legal entity

b. Consistency

c. Going concern

d. None of these choices are correct.

Which of the following statements is true regarding a bond?

a. If you buy a bond from a company, you are borrowing money from the company.

b. A bond is a certificate that represents a corporation's promise to repay a certain amount of money and interest in the future.

c. A bond is a certificate that acts as evidence of ownership in a corporation.

d. Bondholders receive dividends semiannually.

When selecting between the best alternatives regarding an ethical dilemma in accounting, all of the following should be considered except

a. which alternative provides the most profitable information.

b. which alternative provides the most neutral information.

c. which alternative provides the most relevant information.

d. which alternative provides the most accurate information.

Aloha Company reports the following information at December 31, 2017:

Revenue	$150,000
Cash	30,000
Accounts payable	40,000
Dividends	10,000
Expenses	85,000

What is Aloha Company's net income?

a.$15,000

b.$45,000

c.$65,000

d.$55,000

Scoring: Your score will be based on the number of correct matches. There is no penalty for incorrect or missing matches.

Three organizations important to accounting are listed below. Select the organization that most closely achieves the role described.

American Institute of Certified Public Accountants (AICPA) Financial Accounting Standards Board (FASB) Securities and Exchange Commission (SEC)		Issues financial accounting concepts that are used as a guide to accounting standard setting Has the ultimate authority to set accounting standards, but has allowed the profession to do so Prepares and grades the Uniform CPA Examination An agency of the federal government

Gyro's Shop reported a net loss of $15,000 and total expenses of $80,000. How much are total revenues?

a.$15,000

b.$65,000

c.$95,000

d. The answer cannot be determined from the information given.

The three forms of business entities are

a. sole proprietorships, partnerships, and corporations.

b. wholesalers, manufacturers, and retailers.

c. financing, investing, and operating.

d. government, cooperatives, and philanthropic organizations.

Marcos Company reported the following items on its financial statements for the year ending December 31, 2017:

Sales	$560,000		Cost of goods sold	$410,000
Salary expense	40,000		Interest expense	30,000
Dividends	20,000		Income tax expense	25,000

How much will be reported as net income on Marcos' income statement at December 31, 2017, if this is the first year of operations?

a.$65,000

b.$55,000

c.$85,000

d. Not enough information is provided.

What is the name of the branch of accounting concerned with providing managers and administrators with information to facilitate the planning and control of business operations?

a. Financial accounting

b. Bookkeeping

c. Auditing

d. Management accounting

Which one of the following is not an external user of financial statements?

a. The company's controller

b. Suppliers

c. Creditors

d. None of these choices are correct.

Harbor City Corporation's end-of-year balance sheet consisted of the following amounts:

Cash	$ 15,000		Accounts receivable	$50,000
Property, plant, and equipment	70,000		Long-term debt	40,000
Capital stock	100,000		Accounts payable	20,000
Retained earnings	?		Inventory	35,000

What is Harbor City's retained earnings balance at the end of the current year?

a.$10,000

b.$110,000

c.$170,000

d.$160,000

Which one of the following items is reported as a current asset on a classified balance sheet?

a. Common stock

b. Trucks

c. Accounts receivable

d. Land

Which of the following represents the correct sequence of the three business activities on the statements of cash flows?

a. Operating, Investing, Financing

b. Financing, Investing, Operating

c. Financing, Operating, Investing

d. Investing, Operating, Financing

Which of the following terms characterizes the time period between the investment of cash in merchandise and the collection of cash from the sale of that merchandise?

a. Natural business year

b. Accounting period

c. Operating cycle

d. Fiscal period

Scoring: Your score will be based on the number of correct matches. There is no penalty for incorrect or missing matches.

For each item listed, select the section of the balance sheet in which the item would be reported. Answers may be used more than once.

Clear All
Current Assets Property, Plant, and Equipment Current Liabilities Stockholders' Equity		Cash Accounts payable Retained earnings Land

In preparing financial statements, accountants should consider all of the following except

a. the characteristics that make accounting information useful.

b. the presentation of the value of a company.

c. the most useful way to display the information found on the financial statements.

d. the objectives of financial reporting.

Which of the following would not appear on an income statement?

a. Cost of goods sold

b. Sales revenue

c. Insurance expense

d. Accounts receivable

Which of the following includes only current assets?

a. Cash, land, accounts receivable, inventory

b. Accounts receivable, cash, furniture, office supplies

c. Accounts receivable, cash, inventory, office supplies

d. Cash, accounts payable, inventory, office supplies

Forman, Inc. earned $600,000 profit during 2017. On which financial statement(s) will you find the dollar amount of the profit earned by the company?

a. Income statement only

b. Statement of retained earnings only

c. Balance sheet and income statement

d. Income statement and statement of retained earnings

Bevco Company Bevco Company has provided the following information from its accounting records for the current year:

Cash	$ 55,000		Accounts receivable	$ 45,000
Inventory	65,000		Land	75,000
Accounts payable	50,000		Notes payable (due 2021)	150,000
Retained earnings	?		Capital stock	20,000

Read the information for Bevco Company. What are Bevco' current liabilities?

a.$230,000

b.$50,000

c.$125,000

d.$200,000

Which of the following statements is true concerning intangible assets?

a. Intangible assets are listed in the Stockholders' Equity section of the balance sheet.

b. Intangible assets have no economic substance.

c. Intangible assets lack physical existence.

d. Intangible assets appear in the Current Assets section of the balance sheet.

Jobston, Inc. The balance sheet of Jobston, Inc. includes the following items:

Cash	$22,400
Accounts receivable	11,700
Inventory	23,300
Prepaid insurance	1,040
Land	80,000
Accounts payable	47,500
Salaries payable	1,200
Capital stock	84,040
Retained earnings	5,700

Read the information about Jobston, Inc. What is Jobston's current ratio?

a.1.2 to 1

b.0.8 to 1

c.2.5 to 1

d.1.6 to 1