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The portion of net income that the company has kept over a period of years is called:


A) common stock.
B) retained earnings.
C) revenue.
D) gross profit.

E) B) and D)
F) A) and C)

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Management accounting:


A) includes information such as budgets and forecasts.
B) is used to make strategic decisions for the entity.
C) must be relevant to decision makers within the entity.
D) is all of the above.

E) C) and D)
F) None of the above

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An investor who wished to answer the question, "Can the company sell its products?" should investigate the:


A) operating activities section of the cash flow statement.
B) current and projected inventory levels.
C) sales revenue trends and projected sales.
D) net income for the current period and projected net income for the next period.

E) All of the above
F) A) and B)

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On January 1, 2010, total assets for Liftoff Technologies were $125,000; on December 31, 2010, total assets were $145,000. On January 1, 2010, total liabilities were $110,000; on December 31, 2010, total liabilities were $115,000. What is the amount of the change and the direction of the change in Liftoff Technologies' stockholders' equity for 2010?


A) Decrease of $15,000
B) Increase of $15,000
C) Increase of $30,000
D) Decrease of $30,000

E) B) and D)
F) A) and B)

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For which form of business ownership are the owners of a business legally distinct from the business?


A) Corporation
B) Partnership
C) Proprietorship
D) All of the above

E) B) and C)
F) A) and B)

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If expenses have exceeded sales revenue during the life of the company, the accumulation of these losses will result in an accumulated deficit in retained earnings.

A) True
B) False

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If assets increase $210,000 during a given period and liabilities increase $65,000 during the same period, stockholders' equity must:


A) increase $145,000.
B) decrease $275,000.
C) decrease $145,000.
D) increase $275,000.

E) B) and C)
F) C) and D)

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The acronym GAAP stands for:


A) generally acceptable authorized pronouncements.
B) government authorized accountant principles.
C) generally accepted accounting principles.
D) government audited accounting pronouncements.

E) B) and C)
F) A) and D)

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The Statement of Cash Flows is divided into which three categories?


A) Operating, investing, and financing activities
B) Planning, executing, and evaluating activities
C) Increasing, decreasing, and non-cash activities
D) Developing, producing, and marketing activities

E) None of the above
F) A) and B)

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Net income appears on both the income statement and the balance sheet.

A) True
B) False

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The balance sheet contains the:


A) amount of net income or net loss.
B) beginning balance in retained earnings.
C) ending balance in retained earnings.
D) amount of cash dividends paid to stockholders.

E) All of the above
F) None of the above

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The owners' equity of any business is its:


A) revenues minus expenses.
B) assets minus liabilities.
C) assets plus liabilities.
D) paid-in capital plus assets.

E) A) and D)
F) A) and C)

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Use the following Balance Sheet and Income Statement to answer the question. Use the following Balance Sheet and Income Statement to answer the question. What is the Gross Profit for the period ended December 31, 2010? A) $35,000 B) $13,000 C) $22,000 D) $ 7,000 Use the following Balance Sheet and Income Statement to answer the question. What is the Gross Profit for the period ended December 31, 2010? A) $35,000 B) $13,000 C) $22,000 D) $ 7,000 What is the Gross Profit for the period ended December 31, 2010?


A) $35,000
B) $13,000
C) $22,000
D) $ 7,000

E) C) and D)
F) All of the above

Correct Answer

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Revenues are:


A) decreases in assets resulting from delivering goods or services to customers.
B) increases in liabilities resulting from delivering goods or services to customers.
C) increases in retained earnings resulting from delivering goods or services to customers.
D) decreases in retained earnings resulting from delivering goods or services to customers.

E) B) and D)
F) A) and C)

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In accounting, the word "net" refers to an amount after a subtraction.

A) True
B) False

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Retained earnings appears on which of the following financial statements?


A) Statement of Retained Earnings, Statement of Cash Flows, and Balance Sheet, but not the Income Statement
B) Statement of Retained Earnings, Statement of Cash Flows, and Income Statement, but not the Balance Sheet
C) Statement of Retained Earnings and Statement of Cash Flows, but not the Income Statement or Balance Sheet
D) Statement of Retained Earnings and Balance Sheet, but not the Income Statement or Statement of Cash Flows

E) A) and B)
F) B) and C)

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Stockholders' equity decreases as a result of:


A) owner investments.
B) a net loss during the period.
C) a net income during the period.
D) both A and C.

E) A) and B)
F) B) and D)

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The word "payable" always signifies a liability.

A) True
B) False

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An investor who wished to answer the question, "Can the company pay its current liabilities?" should investigate:


A) the financing activities section of the cash flow statement.
B) the current assets and current liabilities on the balance sheet.
C) the sales revenue trend.
D) none of the above.

E) A) and B)
F) A) and C)

Correct Answer

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The main source of cash from its main business comes from:


A) current assets on the balance sheet.
B) operating activities on the statement of cash flows.
C) financing activities on the statement of cash flows.
D) investing activities on the statement of cash flows.

E) B) and C)
F) A) and D)

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Showing 141 - 160 of 162

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