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U.S. GAAP refers to:

Select one:

A set of accounting standards used worldwide

A set of accounting standards that form the guidelines for financial accounting

A rigid set of accounting standards that must be uniformly applied by all U.S.
businesses

A set of accounting standards approved by the U.S. Congress

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The accounting equation requires that:

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Total assets equal total liabilities plus stockholders’ equity

Total assets equal total noncurrent liabilities plus stockholders’ equity

Current assets equal current liabilities plus stockholders’ equity

Stockholders’ equity equal total liabilities minus total assets

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Which of the following is NOT a component of the annual report?

Select one:

Management discussion and analysis

A company’s charter of incorporation

Notes to the financial statements

The auditor’s report

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A primary qualitative characteristic of accounting information is relevance.

Relevance means that information should:

Select one:

Have the capacity to make a difference in a decision

Be free from error and bias

Have benefits that exceed the costs

Use the least optimistic estimates

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Which of the following forms of business organizations exists as a legal entity for tax purposes?

Select one:

A. A partnership

B. A labor union

C. A sole proprietorship

D. A corporation

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Which of the following is not an advantage of the corporate form of business organization?

Select one:

A. The ease with which capital can be raised

B. Both the business and the owners are taxed

C. The protection afforded stockholders against personal liability

D. The relative ease of selling ownership shares

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Which of the following activities is an example of an operating activity?

Select one:

A. Purchasing a delivery truck

B. Selling merchandise online

C. Receiving a loan from a bank

D. Issuing shares of stock in exchange for cash

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Question 12

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Which of the following activities is an example of an investing activity?

Select one:

A. Purchasing a delivery truck

B. Issuing shares of stock in exchange for cash

C. Selling merchandise online

D. Receiving a loan from a bank

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Question 13

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

Select one:

A. Internal Revenue Service

B. Senior company management

C. Creditors

D. Stockholders

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Which one of the following is not an internal user of financial information?

Select one:

A. Creditors

B. The Finance Department

C. The Marketing Department

D. Senior company management

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Which of the following is correct?

Select one:

A. Some liabilities may involve the performance of services.

B. Liabilities are claims on an entity's assets that remain after the claims of owners have been settled.

C. To qualify as an asset, a resource must have a physical existence.

D. Accounts receivable and Wages payable are examples of liabilities.

E. None of the above

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On which statement are assets, liabilities and stockholders' equity reported?

Select one:

A. Balance sheet

B. Income statement

C. Statement of cash flows

D. Statement of retained earnings

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Which of the following items are disclosed on the balance sheet?

Select one:

A. Cash payments

B. Equipment, cash payment, inventory

C. Inventory, accounts receivable, equipment

D. Operating expenses, equipment

E. Account receivable, cash payments

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Marvin's Mechanical Repair Shop started the year with total assets of $60,000, total liabilities of $40,000, and retained earnings of $18,000. During the year, the business recorded $100,000 in auto repair revenues, $70,000 in expenses, and the company paid dividends of $15,000.

The net income reported by Marvin's Mechanical Repair Shop for the year was:

Select one:

A. $180,000

B. $ 40,000

C. $ 50,000

D. $ 30,000

E. None of the above

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The Williams Model Aircraft Repair Shop started the year with total assets of $180,000, total liabilities of $120,000, and retained earnings of $54,000. During the year, the business recorded $300,000 in repair revenues, $210,000 in expenses, and the company paid dividends of $45,000.

The net income reported by The Williams Model Aircraft Repair Shop for the year was:

Select one:

A. $ 90,000

B. $540,000

C. $120,000

D. $150,000

E. None of the above

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Stockholders’ equity and total assets were $192,000 and $474,000 respectively at the beginning of the period. Assets increased 50% and liabilities decreased 60% during the period.

What is stockholders’ equity at the end of the period?

Select one:

A. $598,200

B. $282,000

C. $670,200

D. $270,000

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Using the table below, determine the retained earnings as of December 31, 2019.

TOTALS	Jan. 1, 2019	Dec. 31, 2019
Current assets	$ 10,000	$ 20,000
All other assets	300,000	300,000
Liabilities	50,000	60,000
Common stock	100,000	130,000
Retained earnings	160,000	?

Additional data:
Total expenses for the year were $70,000; Dividends paid during the year were $16,000.

Select one:

A. $110,000

B. $170,000

C. $150,000

D. $130,000

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Using the table below, determine the revenues for the year ending on December 31, 2019?

TOTALS	Jan. 1, 2019	Dec. 31, 2019
Current assets	$ 10,000	$ 20,000
All other assets	300,000	300,000
Liabilities	50,000	60,000
Common stock	100,000	130,000
Retained earnings	160,000	?

Additional data:
Total expenses for the year were $70,000; Dividends paid during the year were $16,000.

Select one:

A. $32,000

B. $56,000

C. $44,000

D. $74,000

Answer 1

5.( B) A set of accounting standards that form the guidelines for financial accounting

6.(A) Total assets equal total liabilities plus stockholders’ equity

7.(B)A company’s charter of incorporation

8.(B) Be free from error and bias

9.(D). A corporation

10.(B). Both the business and the owners are taxed

11. (B)Selling merchandise online

12.(A) Purchasing a delivery truck

13. (A) Internal Revenue Service

14. (A) Creditors

15. (E) None of the above

16. (A)

17. (C) Inventory, accounts receivable, equipment

18. ( E) None of the above (18,000+100000-70000-15000)= $ 33000

19. (E) None of the above54000+300000-210000-45000=99000

20. (A) $598,200  

Share holder's equity= $192000 Total Assets $ 474000

Liabilities (bal. fig)    = $ 282000

Total Liabilities   = $474000 Total Assets $ 474000

Revised Balance sheet

Share holder's equity (bal fig)= $598200 Total Assets $ 711000

Liabilities = $ 112800

Total Liabilities   = $711000 Total Assets $ 711000

474000+50%= 711000

282000-60%= 112800

22. (D) $74,000

160000-70,000-16000=74000