Test Bank for Accounting Tools for Business Decision Makers 4th Edition PDF

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Test Bank for Accounting Tools for Business Decision Makers 4th Edition

Pa Payments yments to stockholders are ccalled alled

1. a. expenses. 2. b. liabilities. 3. c. dividends. 4. d. distributions. Common stock is reported o on n the

1. a. statement of cash flows.

2. b. retained earnings statement. 3. c. income statement. 4. d. balance sheet. Stockholders’ equity is comprised comprised of

1. a. common stock and dividends. 2. b. common stock and retained earnings. 3. c. dividends and retained earnings. 4. d. net income and retained earnings. Stockholders’ equity

1. a. is usually equal to cash on hand. 2. b. is equal to liabilities and retained earnings. 3. c. includes retained earnings and common stock. 4. d. is shown on the income statement. Re Retained tained earnings is

1. a. the stockholders’ claim on total assets. 2. b. equal to cash. 3. c. equal to revenues. 4. d. the amount of net income kept in the corporation for future use. Which financial statement would best indic indicate ate whether the company rrelies elies on debt or stockholders’ equity to finance its as assets? sets?

1. a. Statement of Cash Flows 2. b. Retained Earnings Statement 3. c. Income Statement 4. d. Balance Sheet The primary purpose of the statement of cash flows is to report

1. a. a company`s investing transactions. 2. b. a company`s financing transactions. 3. c. information about cash receipts and cash payments of a company. 4. d. the net increase or decrease in cash.

Claims of owners are ccalled alled

1. a. dividends 2. b. stockholders’ equity 3. c. liabilities 4. d. income payable Which of the following following is not a common way way that managers use the balance sheet?

1. a. To analyze the balances of assets, liabilities, and stockholders’ equity throughout the accounting period 2. b. To determine if the cash balance is sufficient for future needs 3. c. To analyze the balance between debt and common stock financing 4. d. To analyze the balance of accounts receivable on the last day of the accounting period Why are ffinancial inancial statement users interested in tthe he statement of cash flows?

1. a. It is the easiest financial statement to evaluate. 2. b. It provides information about an important company resource. 3. c. It is the first statement that is presented to users. 4. d. It helps users decide whether assets such as office equipment should be replaced. Why should the inco income me statement be prepared ffirst? irst?

1. a. The statement of cash flows should be prepared first because it determines the sources of cash. That information is then used in preparing the income statement. 2. b. Net income from the income statement flows into the retained earnings statement. The ending retained earnings balance then flows into the balance sheet. 3. c. The income statement does not have to be prepared first. Financial statements can be prepared in any order. 4. d. None of these statements is correct. Elston Company compi compiled led the following financia financiall information as of Decembe Decemberr 31, 2012: Rev Revenues enues $420,000 Common stock 90,000 Eq Equipment uipment 120,000 Expenses 375,000 Cash 105,000 Div Dividends idends 30,000 Supplies 15,000 Accounts p paya aya ayable ble 60,000 Accounts receiv receivable able 45,000 R Retained etained ear earnings, nings, 1/1/12 225,000 Elston’ Elston’ss assets o on n December 31, 2012 are:

1. a. $705,000

2. b. $510,000 3. c. $240,000 4. d. $285,000 Elston Company compiled compiled the following financial financial information as of December December 31, 2012: Revenues Revenues $420,000 Common stock 90,000 Eq Equipment uipment 120,000 Expenses 375,000 Cash 105,000 Div Dividends idends 30,000 Supplies 15,000 Accounts p paya aya ayable ble 60,000 Accounts receiv receivable able 45,000 R Retained etained ear earnings, nings, 1/1/12 225,000 Elston’ Elston’ss reta retained ined earnings on December 31 31,, 2012 are:

1. a. $225,000 2. b. $270,000 3. c. $240,000 4. d. $ 15,000 Elston Company compi compiled led the following financia financiall information as of Decembe Decemberr 31, 2012: Rev Revenues enues $420,000 Common stock 90,000 Eq Equipment uipment 120,000 Expenses 375,000 Cash 105,000 Div Dividends idends 30,000 Supplies 15,000 Accounts p paya aya ayable ble 60,000 Accounts receiv receivable able 45,000 R Retained etained ear earnings, nings, 1/1/12 225,000 Elston’ Elston’ss stoc stockholders’ kholders’ equity on December 3 31, 1, 2012 is:

1. a. $315,000 2. b. $330,000 3. c. $240,000 4. d. $360,000 Benedict Company comp compiled iled the following financial iinformation nformation as of Decem December ber 31, 2012: R Revenues evenues $280,000 Common stock 60,000 Eq Equipment uipment 80,000 Expenses 250,000 Cash 70,000 Div Dividends idends 20,000 Supplies 10,000 Accounts p paya aya ayable ble 40,000 Accounts receiv receivable able 30,000 R Retained etained ear earnings, nings, 1/1/12 150,000 Benedict’ Benedict’ss assets on December 31, 2 2012 012 are:

1. a. $470,000 2. b. $340,000 3. c. $160,000 4. d. $190,000 Benedict Company comp compiled iled the following financial iinformation nformation as of Decem December ber 31, 2012: R Revenues evenues $280,000 Common stock 60,000 Eq Equipment uipment 80,000 Expenses 250,000 Cash 70,000 Div Dividends idends 20,000 Supplies 10,000 Accounts p paya aya ayable ble 40,000 Accounts receiv receivable able 30,000 R Retained etained ear earnings, nings, 1/1/12 150,000 Benedict’ Benedict’ss retained earni earnings ngs on December 31, 2012 are:

1. a. $150,000

2. b. $180,000 3. c. $160,000 4. d. $ 10,000 Benedict Company compiled compiled the following financial information information as of December December 31, 2012: Revenues Revenues $280,000 Common stock 60,000 Eq Equipment uipment 80,000 Expenses 250,000 Cash 70,000 Div Dividends idends 20,000 Supplies 10,000 Accounts p paya aya ayable ble 40,000 Accounts receiv receivable able 30,000 R Retained etained ear earnings, nings, 1/1/12 150,000 Benedict’ Benedict’ss stockholders’ equit equityy on December 31, 2012 is:

1. a. $210,000 2. b. $220,000 3. c. $160,000 4. d. $240,000 The heading on the statement of ccash ash flows identifies all of the fol following lowing except:

1. a. the preparer of the statement 2. b. the company 3. c. the time period covered by the statement 4. d. the type of statement All of the following aare re interrelationships that are important to understand w when hen preparing financial statements except:

1. a. The net income from the income statement is used in the retained earnings statement. 2. b. The ending retained earnings from the Retained earnings statement is used in the stockholder`s equity section of the balance sheet. 3. c. The cash on the balance sheet should be equal to the cash at the end of the period on the statement of cash flows. 4. d. All of the payments on the balance sheet should be equal to the cash payments for operating activities on the statement of cash flows. Marvin Services Corpor Corporation ation had the ffollowing ollowing accounts and balances: Accou Accounts nts pay payable able $12,000 Equipment $14,000 Ac Accounts counts receiv receivable able 2,000 Land 14 14,000 ,000 Buildings ? Unearned service re revenue venue 4,000 Cash 6,000 T Total otal stockholders' equity ? If the balance of tthe he Buildings account was $28,000 and $2,000 of Accounts P Pay ay ayable able were p paid aid in cash, what would be tthe he balance of the total stockholders' equity?

1. a. $54,000

2. b. $48,000 3. c. $68,000 4. d. $52,000 Marvin Services Corporation Corporation had the following following accounts and balances: Accounts Accounts payable payable $12,000 Equipment $14,000 Ac Accounts counts receiv receivable able 2,000 Land 14 14,000 ,000 Buildings ? Unearned service re revenue venue 4,000 Cash 6,000 T Total otal stockholders' equity ? If the balance of tthe he Buildings account was $16,000 and $4,000 of Ac Accounts counts P Pay ay ayable able were paid in ca cash, sh, what would be the total liabilities and stockholders' equity?

1. a. $36,000 2. b. $52,000 3. c. $32,000 4. d. $48,000 Marvin Services Corpor Corporation ation had the ffollowing ollowing accounts and balances: Accou Accounts nts pay payable able $12,000 Equipment $14,000 Ac Accounts counts receiv receivable able 2,000 Land 14 14,000 ,000 Buildings ? Unearned service re revenue venue 4,000 Cash 6,000 T Total otal stockholders' equity ? If total stockholder's equi equity ty was $38,000, what wo would uld be the balance of the Buildings Acco Account? unt?

1. a. $14,000 2. b. $54,000 3. c. $58,000 4. d. $18,000 Marvin Services Corpor Corporation ation had the ffollowing ollowing accounts and balances: Accou Accounts nts pay payable able $12,000 Equipment $14,000 Ac Accounts counts receiv receivable able 2,000 Land 14 14,000 ,000 Buildings ? Unearned service re revenue venue 4,000 Cash 6,000 T Total otal stockholders' equity ? If the balance of tthe he Buildings account was $30,000 and the equipment wa wass sold for $14 $14,000, ,000, what would be the total of stockholders' equity?

1. a. $26,000 2. b. $36,000 3. c. $46,000 4. d. $50,000

Marvin Services Corpor Corporation ation had the ffollowing ollowing accounts and balances: Accou Accounts nts pay payable able $12,000 Equipment $14,000 Ac Accounts counts receiv receivable able 2,000 Land 14 14,000 ,000 Buildings ? Unearned service re revenue venue 4,000 Cash 6,000 T Total otal stockholders' equity ? If the balance of tthe he Buildings account was $34 $34,000, ,000, what would be the total of liliabilities abilities and stockholders' equit equity? y?

1. a. $68,000 2. b. $70,000 3. c. $54,000 4. d. $50,000 Notes to the financial statements include all o off the following exc except: ept:

1. a. Descriptions of significant accounting policies used. 2. b. Explanations of uncertainties. 3. c. Quantifiable accounting information. 4. d. Statistics needed to understand the statements. The management discussion and aanalysis nalysis (MD&A) section of the annual report ccovers overs all of tthe he following aspects eexcept: xcept:

1. a. The ability of the company to pay near-term obligations. 2. b. The certification criteria of the company`s auditors. 3. c. The company`s ability to fund operations and expansion. 4. d. The results of the company operations. An annual report iincludes ncludes all of the following eexcept xcept

1. a. management discussion and analysis section. 2. b. notes to the financial statements. 3. c. an auditor’s report. 4. d. salary information for all the executives. Which of the ffollowing ollowing clarifies information p presented resented in the financial statements statements,, as well as expanding upon it where additi additional onal detail is needed?

1. a. Auditor’s report 2. b. Management discussion and analysis section 3. c. Notes to the financial statements

4. d. President’s state of the company report The information needed to determine whether a company is u using sing accounting methods ssimilar imilar to those of its competitors would be ffound ound in the

1. a. auditor’s report. 2. b. balance sheet. 3. c. management discussion and analysis section. 4. d. notes to the financial statements. In the annual report, w where here would a financial state statement ment reader find out if the compan company’ y’ y’ss financial statements give a ffair air depiction of its financial position and oper operating ating results?

1. a. Notes to the financial statements 2. b. Management discussion and analysis section 3. c. Balance sheet 4. d. Auditor’s report Management’ Management’ss views on the compan company’ y’ y’ss short-term de debt bt paying abilit abilityy, expansion financing, and results of oper operations ations are ffound ound in the

1. a. auditor’s report. 2. b. management discussion and analysis section. 3. c. notes to the financial statements. 4. d. president’s state of the company report. Which of the ffollowing ollowing statements is true?

1. a. Publicly traded U.S. companies must provide an annual report to their shareholders when operating conditions change significantly. 2. b. An unqualified independent auditor’s report must be included in the annual report. 3. c. Notes to the financial statements do not need to be included in the annual report because that information is only for internal users. 4. d. All of the statements are false. Notes to the financial statements

1. a. are optional.

2. b. help clarify information presented in the financial statements. 3. c. are generally brief and few in number. 4. d. need not be read in detail if an unqualified opinion accompanies the financial statements. Pa Payments yments to stockholders are ccalled alled

1. a. expenses. 2. b. liabilities. 3. c. dividends. 4. d. distributions. Common stock is reported o on n the

1. a. statement of cash flows. 2. b. retained earnings statement. 3. c. income statement. 4. d. balance sheet. Stockholders’ equity is ccomprised omprised of

1. a. common stock and dividends. 2. b. common stock and retained earnings. 3. c. dividends and retained earnings. 4. d. net income and retained earnings. Stockholders’ equity

1. a. is usually equal to cash on hand. 2. b. is equal to liabilities and retained earnings. 3. c. includes retained earnings and common stock. 4. d. is shown on the income statement. Re Retained tained earnings is

1. a. the stockholders’ claim on total assets. 2. b. equal to cash. 3. c. equal to revenues. 4. d. the amount of net income kept in the corporation for future use.

Which financial statement would best indic indicate ate whether the company rrelies elies on debt or stockholders’ equity to finance its as assets? sets?

1. a. Statement of Cash Flows 2. b. Retained Earnings Statement 3. c. Income Statement 4. d. Balance Sheet The primary purpose of the statement of cash flows is to report

1. a. a company`s investing transactions. 2. b. a company`s financing transactions. 3. c. information about cash receipts and cash payments of a company. 4. d. the net increase or decrease in cash. Claims of owners are ccalled alled

1. a. dividends 2. b. stockholders’ equity 3. c. liabilities 4. d. income payable Which of the ffollowing ollowing is not a common wa wayy that managers use the balance sheet?

1. a. To analyze the balances of assets, liabilities, and stockholders’ equity throughout the accounting period 2. b. To determine if the cash balance is sufficient for future needs 3. c. To analyze the balance between debt and common stock financing 4. d. To analyze the balance of accounts receivable on the last day of the accounting period Why are ffinancial inancial statement users interested in tthe he statement of cash flows?

1. a. It is the easiest financial statement to evaluate. 2. b. It provides information about an important company resource. 3. c. It is the first statement that is presented to users. 4. d. It helps users decide whether assets such as office equipment should be replaced.

Why should the inco income me statement be prepared ffirst? irst?

1. a. The statement of cash flows should be prepared first because it determines the sources of cash. That information is then used in preparing the income statement. 2. b. Net income from the income statement flows into the retained earnings statement. The ending retained earnings balance then flows into the balance sheet. 3. c. The income statement does not have to be prepared first. Financial statements can be prepared in any order. 4. d. None of these statements is correct. Elston Company compi compiled led the following financia financiall information as of Decembe Decemberr 31, 2012: Rev Revenues enues $420,000 Common stock 90,000 Eq Equipment uipment 120,000 Expenses 375,000 Cash 105,000 Div Dividends idends 30,000 Supplies 15,000 Accounts p paya aya ayable ble 60,000 Accounts receiv receivable able 45,000 R Retained etained ear earnings, nings, 1/1/12 225,000 Elston’ Elston’ss assets o on n December 31, 2012 are:

1. a. $705,000 2. b. $510,000 3. c. $240,000 4. d. $285,000 Elston Company compi compiled led the following financia financiall information as of Decembe Decemberr 31, 2012: Rev Revenues enues $420,000 Common stock 90,000 Eq Equipment uipment 120,000 Expenses 375,000 Cash 105,000 Div Dividends idends 30,000 Supplies 15,000 Accounts p paya aya ayable ble 60,000 Accounts receiv receivable able 45,000 R Retained etained ear earnings, nings, 1/1/12 225,000 Elston’ Elston’ss reta retained ined earnings on December 31 31,, 2012 are:

1. a. $225,000 2. b. $270,000 3. c. $240,000 4. d. $ 15,000 Elston Company compi compiled led the following financia financiall information as of Decembe Decemberr 31, 2012: Rev Revenues enues $420,000 Common stock 90,000 Eq Equipment uipment 120,000 Expenses 375,000 Cash 105,000 Div Dividends idends 30,000 Supplies 15,000 Accounts p paya aya ayable ble 60,000 Accounts receiv receivable able 45,000 R Retained etained ear earnings, nings, 1/1/12 225,000 Elston’ Elston’ss stoc stockholders’ kholders’ equity on December 3 31, 1, 2012 is:

1. a. $315,000 2. b. $330,000 3. c. $240,000 4. d. $360,000

Benedict Company comp compiled iled the following financial iinformation nformation as of Decem December ber 31, 2012: R Revenues evenues $280,000 Common stock 60,000 Eq Equipment uipment 80,000 Expenses 250,000 Cash 70,000 Div Dividends idends 20,000 Supplies 10,000 Accounts p paya aya ayable ble 40,000 Accounts receiv receivable able 30,000 R Retained etained ear earnings, nings, 1/1/12 150,000 Benedict’ Benedict’ss assets on December 31, 2 2012 012 are:

1. a. $470,000 2. b. $340,000 3. c. $160,000 4. d. $190,000 Benedict Company comp compiled iled the following financial iinformation nformation as of Decem December ber 31, 2012: R Revenues evenues $280,000 Common stock 60,000 Eq Equipment uipment 80,000 Expenses 250,000 Cash 70,000 Div Dividends idends 20,000 Supplies 10,000 Accounts p paya aya ayable ble 40,000 Accounts receiv receivable able 30,000 R Retained etained ear earnings, nings, 1/1/12 150,000 Benedict’ Benedict’ss retained earni earnings ngs on December 31, 2012 are:

1. a. $150,000 2. b. $180,000 3. c. $160,000 4. d. $ 10,000 Benedict Company comp compiled iled the following financial iinformation nformation as of Decem December ber 31, 2012: R Revenues evenues $280,000 Common stock 60,000 Eq Equipment uipment 80,000 Expenses 250,000 Cash 70,000 Div Dividends idends 20,000 Supplies 10,000 Accounts p paya aya ayable ble 40,000 Accounts receiv receivable able 30,000 R Retained etained ear earnings, nings, 1/1/12 150,000 Benedict’ Benedict’ss stockholders’ equit equityy on December 31, 2012 is:

1. a. $210,000 2. b. $220,000 3. c. $160,000 4. d. $240,000 The heading on the statement of ccash ash flows identifies all of the fol following lowing except:

1. a. the preparer of the statement 2. b. the company 3. c. the time period covered by the statement 4. d. the type of statement

All of the following aare re interrelationships that are important to understand w when hen preparing financial statements except:

1. a. The net income from the income statement is used in the retained earnings statement. 2. b. The ending retained earnings from the Retained earnings statement is used in the stockholder`s equity section of the balance sheet. 3. c. The cash on the balance sheet should be equal to the cash at the end of the period on the statement of cash flows. 4. d. All of the payments on the balance sheet should be equal to the cash payments for operating activities on the statement of cash flows. Marvin Services Corpor Corporation ation had the ffollowing ollowing accounts and balances...