FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 1: Financial Statements and Business Decisions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

True/False

Review LaterAdd Note

Review Later

The income statement is a measure of an entity's economic performance for a period of time.

A) True
B) False

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

The International Accounting Standards Board has worked to develop global accounting standards known as

A) Generally accepted accounting principles.
B) Globally accepted financial standards.
C) International financial reporting standards.
D) Generally accepted international financial standards.

E) A) and D)
F) All of the above

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

Which of the following statements is false?

Why is the CPA's role in performing audits important to our economic system?

Indicate on which financial statement you would expect to find each of the following. If an item can be found on more than one statement, list each statement. $\begin{array} { | l | l | } \hline \text { Example: Cash } & \text { Balance Sheet } \\\hline \text { Notes payable } & \\\hline \text { Wages expense } & \\\hline \text { Cost of goods sold } & \\\hline \text { Sales revenue } & \\\hline \text { Inventory } & \\\hline \text { Income tax expense } & \\\hline \text { Dividends } & \\\hline \text { Retained earnings } & \\\hline \text { Accounts payable } & \\\hline \text { Equipment } & \\\hline\end{array}$

One of the advantages of a corporation when compared to a partnership is the limited liability of the owners.

Which of the following would most likely increase retained earnings?

Madrid Company has provided the following data (ignore income taxes) : 2014 revenues were $77,500. 2014 net income was $33,900. Dividends declared and paid during 2014 totaled $5,700. Total assets at December 31, 2014 were $217,000. Total stockholders' equity at December 31, 2014 was $123,000. Retained earnings at December 31, 2014 were $83,000. Which of the following is not correct?

A decision maker who wants to understand a company's financial statements must carefully read the notes to the financial statements because these disclosures provide useful supplemental information.

Which of the following statements pertaining to the audit function is incorrect?

Which of the following is a disadvantage of a corporation when compared to a partnership?

Which of the following transactions affects both retained earnings and net income?

Which of the following is primarily responsible for the information provided in the financial statements?

Which of the following describes the primary objective of the balance sheet?

Parker Pool Supply, Inc. reported the following items for the year ended December 31, 2014: $\begin{array} { | l | r | } \hline \text { Wages and salary expense } & \$ 527,000 \\\hline \text { Cost of goods sold } & 1,124,000 \\\hline \text { Rent expense } & 395,000 \\\hline \text { Sales revenue } & 2,564,000 \\\hline \text { Interest expense } & 30,000 \\\hline \text { Income tax expense } & 121,000 \\\hline \text { Accounts receivable } & 27,000 \\\hline\end{array}$ Requirement: Prepare an income statement for the year ended December 31, 2014.

Which of the following is considered to be an expense on the income statement?

For Glad Rags Shops, the following information is available for the year ended December 31, 2014: $\begin{array} { | l | r | } \hline \text { Sales revenue } & \$ 4,200,000 \\\hline \text { Cost of goods sold } & 2,650,000 \\\hline \text { Salaries expense } & 500,000 \\\hline \text { Rent expense } & 300,000 \\\hline \text { Administrative expense } & 250,000 \\\hline \text { Dividends declared } & 10,000 \\\hline\end{array}$ The income tax is $150,000. Requirement: Prepare an income statement for Glad Rags Shops.

Which of the following would not be found on the statement of cash flows?

Within which of the following would you find the inventory method(s) being used by a business entity?

Which financial statement would you use to determine a company's earnings performance during an accounting period?