Accounting Final

Question 1

Which of the following is not an element of the financial statements?

A) equity

B) assets

C) Liabilities

D) the future potential sales price of inventory

Answer 1

future potential sales price of inventory

Question 2

Which of these statements is not one of the financial statements?

A) statement of owner investments

B) balance sheet

C) income statement

D) statement of cash flows

Answer 2

Statement of owner investments

Question 2

Which of the following is the correct order for preparing the financial statements?

A) income statement, statement of cash flows, balance sheet, statement of owner’s equity

B) income statement, statement of owner’s equity, balance sheet, statement of cash flows

C) income statement, balance sheet, statement of owner’s equity, statement of cash flows

D) income statement, balance sheet, statement of cash flows, statement of owner’s equity

Answer 2

B

Question 3

Assume a company has a $350 credit (not cash) sale. How would the transaction appear if the business uses accrual accounting?

A) $350 would show up on the statement of cash flows as a cash outflow.

B) $350 would show up on the income statement as a sale.

C) The transaction would not be reported because the cash was not exchanged.

D) $350 would show up on the balance sheet as a sale.

Answer 3

$350 would show up on the income statement as a sale

Question 4

Exchanges of assets for assets have what effect on equity?

A) no impact on equity

B) There is no relationship between assets and equity

C) increase equity

D) decrease equity

Answer 4

No impact on equity

Question 5

Stakeholders are less likely to include which of the following groups?

A) community leaders

B) employees

C) Owners

D) competitors

Answer 5

Competitors

Question 6

Owners have no personal liability under which legal business structure?

A) a partnership

B) There is a liability in every legal business structure

C) a corporation

D) a sole proprietorship

Answer 6

A corporation

Question 7

Working capital is an indication of the firm’s ________.

A) amount of noncurrent liabilities

B) liquidity

C) amount of noncurrent assets

D) asset utilization

Answer 7

amount of noncurrent assets

Question 8

Identify the correct components of the income statement.

A) assets, liabilities, and owner’s equity

B) revenues, expenses, investments by owners, distributions to owners

C) revenues, losses, expenses, and gains

D) assets, liabilities, and dividends

Answer 8

revenues, losses, expenses, and gains

Question 9

Which of the following decreases the owner’s equity?

A) investments by owners

B) gains

C) short-term loans

D) losses

Answer 9

Losses

Question 10

The estimated economic life of an asset is also known as ________.

Answer 10

Useful Life

Question 11

The amortization process is like what other process?

Answer 11

Depreciation

Question 12

Which of the following would not be considered an intangible asset?

A) goodwill

B) inventory

C) patent

D) copyright