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Dividends are reported on the:


A) income statement.
B) balance sheet.
C) statement of retained earnings.
D) income statement and balance sheet.

E) B) and C)
F) A) and D)

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Which of the following statements about financial accounting is correct?


A) Financial accounting reports are used primarily by employees to make business decisions related to production.
B) Financial accounting reports are used primarily by management to understand whether a product line should be discontinued.
C) Financial accounting reports are primarily prepared to provide information for external decision makers.
D) Financial accounting reports primarily contain detailed internal records of the company.

E) A) and C)
F) A) and B)

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Which of the following is typically considered a disadvantage of sole proprietorships?


A) Income taxes are paid by both the business and its owner.
B) The business is considered a separate legal entity from its owner.
C) Establishing the business usually requires legal assistance.
D) Owner is personally liable for all debts of the business.

E) A) and C)
F) A) and B)

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The Publish or Perish Printing Company paid a dividend to stockholders.This will be reported on the:


A) audit report.
B) income statement.
C) balance sheet.
D) statement of retained earnings.

E) B) and D)
F) B) and C)

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The Statement of Cash Flows for the current year contained the following: The Statement of Cash Flows for the current year contained the following: The change in cash for the current year was an increase of $14,000. What was the amount of cash flows from (used in) operating activities? A) $5,000 B) $35,000 C) $25,000 D) $4,000 The change in cash for the current year was an increase of $14,000. What was the amount of cash flows from (used in) operating activities?


A) $5,000
B) $35,000
C) $25,000
D) $4,000

E) A) and D)
F) B) and D)

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Universal Corp.has beginning Retained Earnings of $80,000,cash flows from operating activities during the current year of $35,000,dividends paid during the year of $5,000,net income for the current year of $50,000,and Common Stock at the end of the year of $15,000.What is the amount of its Retained Earnings at the end of the year?


A) $125,000
B) $140,000
C) $160,000
D) $175,000

E) B) and C)
F) A) and D)

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A list of Year 3 revenues and expenses for Green Thumb,Inc.is provided below.  Advertising and Promotion Expenses 262,500 Income Tax Expense 56,500 Interest Expense 43,900 Other Expenses 122,400 Other Selling & Administrative Expenses 350,800 Sales Revenue 1,865,300 Salaries and Wages Expense 724,800\begin{array}{lr}\text { Advertising and Promotion Expenses } & 262,500 \\\text { Income Tax Expense } & 56,500 \\\text { Interest Expense } & 43,900 \\\text { Other Expenses } & 122,400 \\\text { Other Selling \& Administrative Expenses } & 350,800 \\\text { Sales Revenue } & 1,865,300 \\\text { Salaries and Wages Expense } & 724,800\end{array} Required: a.Calculate the net income for the Green Thumb,Inc.for Year 3. b.Prepare a statement of retained earnings for Green Thumb,Inc.for Year 3.Assume the company had retained earnings of $162,000 as of January 1,Year 3,and paid out $46,000 in dividends during Year 3.

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a.
Net income = Revenues - Exp...

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Alpha sold $2,000 of services to Beta on credit.Beta promised to pay for it next month.Beta will report a $2,000:


A) Payable.
B) Accounts Receivable.
C) decrease in Cash,since it plans to pay next month.
D) net income.

E) B) and D)
F) B) and C)

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Stockholders are owners of a corporation.

A) True
B) False

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Which of the following requires that its members adhere to a Code of Professional Conduct?


A) SEC
B) FASB
C) PCAOB
D) AICPA

E) B) and D)
F) C) and D)

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Profit is equal to:


A) revenues minus expenses.
B) assets minus liabilities.
C) the amount of cash that a company has.
D) the amount of cash that owners have contributed to the business.

E) None of the above
F) A) and B)

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Which of the following statements about organizational forms of a business is not correct?


A) In a sole proprietorship form of business or in a partnership form,the owner(s) are personally responsible for the debts of the business.
B) The partnership agreement states how profits are to be shared between partners and what happens when a new partner is to be admitted or an existing partner is retiring.
C) A corporation is a separate entity from both a legal and accounting perspective.
D) The owners of a corporation are legally responsible for the corporation's debts and taxes.

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

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Managerial accounting reports prepared for internal use are used by the company's:


A) suppliers.
B) bank.
C) employees.
D) stockholders.

E) None of the above
F) C) and D)

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The following accounts are taken from the December 31,Year 4 financial statements of a company. The following accounts are taken from the December 31,Year 4 financial statements of a company. What is the amount of total assets at the end of Year 4? A) $16,800 B) $16,500 C) $21,600 D) $23,500 What is the amount of total assets at the end of Year 4?


A) $16,800
B) $16,500
C) $21,600
D) $23,500

E) A) and B)
F) A) and C)

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What would a user of financial statements learn from reading the auditors' report?


A) Whether the financial statements present a fair picture of the company's financial results and are prepared in accordance with GAAP.
B) Whether or not it is a good time to purchase the stock.
C) How much the company plans to distribute as dividends.
D) Whether or not the company has plans for future expansion.

E) None of the above
F) B) and C)

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The WeBuild Construction Company sold $16.5 million of buildings in its first year of operations.The company received payments of $11.25 million for these buildings.The company's income statement would report:


A) Accounts Receivable of $5.25 million.
B) Expenses of $5.25 million.
C) Sales Revenue of $11.25 million.
D) Sales Revenue of $16.5 million.

E) A) and D)
F) A) and B)

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Match the business activity to the appropriate category. -Company repayment of a bank loan


A) Financing activity
B) Operating activity
C) Investing activity

D) A) and B)
E) A) and C)

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Dividends paid to stockholders:


A) are a reduction to Retained Earnings.
B) appear in the cash flows from operating activities section of the statement of cash flows.
C) appear on the income statement.
D) are subtracted from Common Stock.

E) None of the above
F) A) and B)

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What is the missing amount for Total Liabilities? A) $3,347,700 B) $1,439,200 C) $1,470,700 D) $1,877,000 What is the missing amount for Total Liabilities?


A) $3,347,700
B) $1,439,200
C) $1,470,700
D) $1,877,000

E) None of the above
F) All of the above

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Borrowing from a bank is a(n) :


A) operating activity.
B) investing activity.
C) financing activity.
D) expense.

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

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