1. The primary focus for financial accounting information is to provide information useful for:
2. What is the primary purpose of financial accounting?
3. Financial accounting does not deal with which of the following?
4. Which of the following groups is not among the external users for whom financial
statements are prepared?
5. Financial accounting:
6. The primary purpose(s) of financial accounting is (are) to:
7. Which definition below best describes financial accounting?
8. The accounting equation is defined as:
9. Which statement below best describes the accounting equation?
10. If a company has stockholders’ equity of $60,000 at the end of the year, which of the
following statements must be true?
11. Emmitt had the following final balances after the first year of operations: assets, $55,000;
stockholders’ equity, $25,000; dividends, $3,000; and net income, $10,000. What is the
amount of Emmitt’s liabilities?
12. Transactions of a company involving external sources of funding are referred to as:
13. Transactions of a company that include the purchase and sale of long-term productive
assets are referred to as:
14. McGill purchases additional office equipment to better serves its customers. This purchase
is classified as what type of activity?
15. Transactions related to the primary business activities of the company, such as selling
goods and services to customers, are referred to as:
16. Stimpleton Company engages in the following cash payments:
What is the total amount of cash paid for operating activities?
17. The form of business organization that is legally separate from its owners is a:
18. Which business form has the advantage of limited liability?
19. Limited liability means:
20. One disadvantage of the corporate form of business is:
21. The costs of providing goods and services to customers are referred to as:
22. The accounts which represent the resources of the company are called:
23. An alternative form of the accounting equation is:
24. The owners’ interest in a corporation is called:
25. Creditors’ claims to a corporation’s resources are referred to as:
26. Net income can best be described as:
27. Use the following appropriate amounts to calculate net income: Revenues, $12,000;
Liabilities, $5,000; Expenses, $4,000; Assets, $19,000; Dividends, $4,000.
28. Liabilities are best defined as:
29. Which of the following best describes a revenue?
30. The account type that represents payments to stockholders is called:
31. The accounts that represent resources owed to creditors are called:
32. Using the information below from the accounting records of Thomas Corporation, owners’
claims to the company’s resources amount to:
Assets
$1,200,000
Liabilities
$800,000
Net income
$100,000
Retained earnings
$250,000
33. Which of the following is an operating activity?
34. How many of the following transactions are operating activities?
Borrowed $50,000 from the bank
Purchased $12,000 in supplies
Provide services to customers for $27,000
Paid the utility bill of $750
Purchased a delivery truck for $12,000
Received $25,000 from issuing common stock
35. The costs associated with producing revenues are referred to as:
36. Accountants are responsible for measuring various operating, investing and financing
activities. Which of the following correctly matches the activity with its type?
37. Which of the following accounts appears in the statement of stockholders’ equity?
38. Sooner Company has had a net income of $8,000, $5,000, $12,000, and $10,000 over the
first four years of the company’s existence. If the average annual amount of dividends paid
over the last four years is $3,000, what is the ending retained earnings balance?
39. The equation best describing the income statement is:
40. On January 1, 2012, Gucci Brothers Inc. started the year with a $492,000 balance in
Retained Earnings and a $605,000 balance in Common Stock. During 2012, the company
earned net income of $92,000, paid a dividend of $15,200, and issued more common stock for
$27,500. What is total stockholders’ equity on December 31, 2012?
41. The financial statement that represents activity over the entire life of the company is the:
42. Which of the following is the correct order for preparing the financial statements?
43. The financial statement(s) that record activity over an interval of time is (are) the:
44. Which of the following items would not appear in an income statement?
45. The two categories of stockholders’ equity usually found in the balance sheet of a
corporation are:
46. Which of the following statements regarding financial reports is not correct?
47. Which of the following is not a balance sheet item?
48. In what order are the following financial statements prepared: (1) balance sheet, (2)
income statement, and (3) statement of stockholders’ equity?
49. Nina Corp. had the following net income (loss) the first three years of operation: $7,100,
($1,600), and $3,600. If the Retained Earnings balance at the end of year three is $1,100, what
was the total amount of dividends paid over these three years?
50. Aikman Company has paid dividends of $2,410, $0, $1,570 and $1,060 over the first four
years of the company’s existence. If Retained Earnings after year four has an ending balance
of $9,700, what is the average annual amount of net income (loss) over the past four years for
Aikman?