CH 1 MC
16.(S05) Expenses total $6,000, assets total $15,000, and liabilities total $4,000. What is the dollar amount of stockholders' equity?
a.$19,000
b. $11,000
c.$ 9,000
d.$ 5,000
b. $11,000
17.(S06) Accounting rules having substantial authoritative support and recognized as a general guide for financial reporting purposes are called:
a.general accounting principles.
b.generally accepted auditing principles.
c.generally accepted accounting standards.
d.generally accepted accounting principles.
d. generally accepted accounting principles.
Obligations to be paid within the next year or operating cycle, whichever is longer.
current liabilities
3.(S03) An account has $600 on the debit side and $400 on the credit side. The overall balance in the account is a:
a.debit of $200.
b.credit of$200.
c.debit of $600.
d.credit of $400.
a.debit of $200.
. (S02)A(n) ________________________ is an individual accounting record of increases and decreases in a specific asset, liability, or stockholders' equity item
account
12.(SO5) Which of the following is an appropriate date for a balance sheet?
a.December 31, 2005
b.For the month ending December 31,2005
c.For the quarter ending December 31, 2005
d.For the year ending December 31, 2005
a.December 31, 2005
6.(SO I) Which of the following is considered a current liability on a classified balance sheet?
a.Bonds payable
b.Pension liabilities
c.Mortgage payable
d.Salaries payable
d.Salaries payable
Resources expected to be realized in cash or sold or consumed within one year or the operating cycle, whichever is longer.
current assets
9. (S04) Which of the following is the correct sequence of events?
Analyze a transaction; record it in the ledger; record it in the journal.
Analyze a transaction; record it in the journal; record it in the ledger.
Record a transaction in the journal; analyze the transaction; record it in the ledger.
None of the above is the correct sequence.
B. Analyze a transaction; record it in the journal; record it in the ledger.
A complete listing of a company's accounts is called a _______________________ of accounts.
chart
14.(SO5) Which of the following is another correct expression of the basic accounting equation?
a.Liabilities = Assets - Stockholders' Equity
b.Assets + Liabilities = Stockholders' Equity
c.Assets = Liabilities - Stockholders' Equity
d.Liabilities = Assets + Stockholders' Equity
a.Liabilities = Assets - Stockholders' Equity
7.(S02) Net income is $200,000, preferred dividends are $20,000, and average common shares outstanding are 50,000. Earnings per share is:
$4.00
$3.60
$ .28
$ .25
2. $3.60
The ability of a company to pay interest as it comes due and to repay the face value of debt at maturity.
solvency
20. (SO8) The primary purpose of a trial balance is to:
get a total of all accounts with a debit balance.
get a total of all accounts with a credit balance.
prove the mathematical equality of debits and credits after posting.
provide a list of all accounts used by a company
3. prove the mathematical equality of debits and credits after posting.
5. (S04)Evidence of an accounting transaction comes in the form of a _______________ ___________________.
source document
The purpose of the __________________________________ is to report the success or failure of the company's operations during the period.
Income Statement
9.(S03) Which of the following items will not appear on a statement of stockholders' equity?
a.Common stock
b.Retained earnings
c. Dividends
d. Cash
D. Cash
The constraint of determining whether an item is important enough to influence the decision of a reasonably prudent investor or creditor.
materiality
14.(SO6) A general ledger of a company contains:
only asset and liability accounts.
all the asset, liability, and stockholders' equity accounts.
only stockholders' equity accounts.
only asset and stockholders' equity accounts.
2. all the asset, liability, and stockholders' equity accounts.
Name 3 liability accounts
varies
19.(S06) Which of the following provides additional details about the items presented in the main body of the financial statements?
a.Management discussion and analysis
b.Auditor's report
c.Financial statements
d.None of the above is correct.
D. none of the above
13.(S04) Current assets are $60,000, total assets are $180,000, current liabilities are $30,000, and total liabilities are $50,000. The current ratio is:
a.2 to 1
b.1.2 to 1
c..5 to 1
d..33 to 1
a. 2 to 1
Name 2 intangible assets
varies
Write the Extended Accounting Equation on the board.
A= L+SE +RE +Rev -Exp - Div
Name 2 errors which could still result in an equal trial balance
double posting, not posting, wrong account