Financing Questions

6830 WordsMay 13, 201228 Pages
True / False Questions 1. Accounting is a system that collects and processes financial information about an organization and reports that information to decision makers. TRUE AACSB Tag: Communications Difficulty: Easy L.O.: 1 2. Assets on the balance sheet are recorded at market value or replacement cost. FALSE AACSB Tag: Reflective Thinking Difficulty: Easy L.O.: 1 3. In accounting and reporting for a business entity, the accounting and reporting for the business must be kept separate from other economic affairs of its owners. TRUE AACSB Tag: Reflective Thinking Difficulty: Easy L.O.: 1 4. The accounting period in which service revenue is recognized (i.e., revenue for…show more content…
The primary purpose of the balance sheet is to A. measure the net income of a business up to a particular point in time. B. report the difference between cash inflows and cash outflows for the period. C. report the financial position of the reporting entity at a particular point in time. D. report the current value of the business. AACSB Tag: Reflective Thinking Difficulty: Easy L.O.: 1 22. The Beta Corporation had 2009 revenues of $200,000, expenses of $140,000, and an income tax rate of 30 percent. Net income after taxes would be A. $60,000. B. $18,000. C. $42,000. D. $48,000. AACSB Tag: Analytic Difficulty: Hard L.O.: 1 23. Atlantic Corporation reported the following amounts at the end of the first year of operations: contributed capital $100,000; sales revenue $400,000; total assets $300,000; $20,000 dividends; and total liabilities $160,000. Retained earnings and total expenses would be A. retained earnings $40,000 and expenses $340,000. B. retained earnings $60,000 and expenses $320,000. C. retained earnings $140,000 and expenses $240,000. D. retained earnings $160,000 and expenses $220,000. AACSB Tag: Analytic Difficulty: Hard L.O.: 1 24. The financial statement that reports the financial position of a business is the A. income statement. B. balance sheet. C. statement of cash flows. D. footnotes to the financial statements. AACSB Tag: Reflective Thinking
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